Cost information for services or products produced by a company is needed for: A
ID: 2600369 • Letter: C
Question
Cost information for services or products produced by a company is needed for:
A. determining the company’s selling prices.
B. external reporting.
C. managerial decisions.
D. All of these.
2. Product costs are expensed as cost of goods sold:
A. when production is complete.
B. at the start of production.
C. when the related products are sold.
D. when the related revenue is collected.
3. The cost of direct materials purchased on account is expensed at the time the:
A. goods made in the manufacturing process are sold.
B. cash is paid to settle the associated accounts payable.
C. manufacturing process is complete.
D. materials are purchased.
4. Paying for factory utilities used during the current month is a(n):
A. asset exchange transaction.
B. asset use transaction.
C. asset source transaction.
D. claims exchange transaction.
5. Recognizing estimated manufacturing overhead costs at the end of a month is a(n):
A. asset source transaction.
B. asset use transaction.
C. asset exchange transaction.
D. claims exchange transaction.
6. Which of the following correctly computes cost of goods manufactured?
A. Beginning work in process + Direct materials used + Direct labor + Overhead – Ending work in process
B. Beginning work in process + Cost of goods sold – Ending finished goods
C. Beginning work in process + Direct materials used + Direct labor + Overhead
D. None of these.
7. The cost of indirect labor will initially be charged to:
A. Cost of Goods Sold.
B. Work in Process Inventory.
C. Manufacturing Overhead.
D. Wages Expense.
8. Which of the following is a valid reason for using variable costing?
A. Fixed production cost should be ignored when costing units of inventory since it is not essential to the production process.
B. Absorption costing recognizes fixed costs as expense regardless of volume of production.
C. Absorption costing may motivate managers to overproduce in order to increase profits.
D. Under variable costing managers can increase profitability by increasing the volume of production.
9. In which account is the actual amount of costs such as factory utilities and maintenance initially recorded?
A. Work in Process Inventory
B. Manufacturing Overhead
C. Raw Materials Inventory
D. Supplies Inventory
10. The reporting method that includes in the cost of inventory (and cost of goods sold) all product costs, including both fixed and variable costs is known as:
A. variable costing.
B. total costing.
C. direct costing.
D. absorption costing.
11. Which product costing system distributes costs evenly across total production?
A. Process cost system
B. Job order cost system
C. Standard cost system
D. Variable cost system
12. A process cost system would be appropriate for all of the following except:
A. Production of gasoline.
B. Manufacture of smart phones.
C. Services provided by public accounting firm.
D. Manufacture of granola bars.
13. A materials requisition in a job-order cost system is used as a:
A. A source document for assigning costs to individual departments.
B. A subsidiary account for recording the materials used on each job.
C. Request form for getting the necessary materials from the materials store room.
D. A means of ordering materials from outside suppliers.
14. All of the following are asset exchange events except:
A. Purchase of raw materials with cash.
B. Use of raw materials in production.
C. Cost of shipping goods to customers.
D. Payment of production wages.
15. The use of raw materials in production is:
A. An asset source transaction.
B. An asset use transaction.
C. An asset exchange transaction.
D. A claims exchange transaction.
16. Which of the following is not a component of process cost systems?
A. Multiple work in process accounts.
B. Cost of production report.
C. Job cost sheet.
D. None of these.
17. Select the correct formula for computing the cost to be assigned to ending inventory in a process costing system.
A. Ending inventory equivalent units × cost per equivalent unit
B. Ending inventory units × cost per equivalent unit
C. Beginning inventory cost + transferred-in costs
D. Beginning inventory units + units transferred in - units transferred out
18. Which of the following is not an approach to compute equivalent whole units?
A. Weighted average.
B. Last-in-first-out.
C. First-in-first-out.
D. All of these can be used.
19. A laundry detergent manufacturer would most likely use:
A. Process costing.
B. Job order costing.
C. Hybrid order costing.
D. Batch order costing.
20. Which of the following items is provided on a work ticket?
A. Job-number
B. Employee identification
C. Work description
D. All of these.
Explanation / Answer
Question no:1 Cost information for services or products produced by a company is needed for Answer is : option (D) All of these Cost of information for Services rendered and prodcuts produced is used for determination of selling prices, contractual prices, bidding process, managerial decisions Such as decision about Continue or Droping of a service or product based cost information amd Alternative for production incase of existing cost system expenses. Question no:2 Products are expensed as cost of goods sold Answer is option (C ) When the related products are sold incase of products sold , then the product costs are transfers to cost of goods sold as expense. entry: Debit : Cost of goods Sold A/c XXX , credit : Finished goods A/c XXX Question no:3 The cost of direct materials purchased on account is expensed at the time the Answer is option : (D) materials are Purchased Materials are recorded as expense at the time of purchase if the all the materials are being transferred manufacturing process Question no:4 paying for factory utilities used during the current month. Answer :Option (B) Asset use transaction The floowing transctions are claimed as assets use transctions 1. Distributions (Such as owners transactions) 2 Liability payments 3 payments For expenses payment of factory utilities used is an expense is a asset use transaction.