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True/False

In Job Costing, each job is considered Unique and can (but might not) follow the same path through production as other jobs.
True
The difference betweeen job order and process costing is the (1)_____ at which (2)_____ are aggregated before they are (3)______ to the individual units of production.
1. level
2. costs
3.assigned
True/False

Equivalent units (EU) represent the number of complete physical units to which units in iventories are equal in terms of unit in WIP?
False
They represent the number of complete physical units to which units in inventories are equal to completed units.
What is the inventory equation?
BWIP + Unit started(TO)=Units transfered out (TO) + EWIP
True/false

Managers can manipulate income numbers by overstating hte stage of completeion of ending inventory
True
More costs are assigned to (1)_____ inventory and (2)____ to goods transferred out, (3)____ of ___ ____ will be understated, leading to (4)_____ gross margin and net income than they actually are
(1) Ending Inventory
(2) less
(3) Cost of Goods Sold
(4) higher

If +Costs to Ending than COGs understated.

If -Cost to Ending than COGs overstated
Which of the following statements is (are) true regarding product costing?
(A) Twenty cans of paint that are 25% full are equivalent to four cans of paint that are completely full.
(B) The equivalent unit concept refers to the actual amount of work during the period stated in terms of whole units.

A). Only A is True
B) Only B is True
C) Both A&B is true
D) Neither A&B is true

B) Only B is true
Which of the following organizations would most likely use a process costing system?

A) Gasoline Refinery
B) Automobile Retailer
C) Airplane Manufacturer
A) Gasoline Reifinery


 (b) is a retailer, (c) and (d) would use job costing.
An equivalent unit of conversion costs is equal to the amount of conversion costs required to

A) Start a unit
B) Start and complete a unit
C) Transfer a unit in or out
B) Start and complete a unit
If the units in the beginning Work-in-Process Inventory are greater than the units in the ending Work-in-Process Inventory, then the units transferred out are

A) More than the units started during the period
B) Equal to the equivalants of production
C) less than the units started during the period

A) More than the units started during the period
In the computation of the manufacturing cost per equivalent unit, the weighted average method of process costing considers

A) Current Costs
B) Current plus BWIP inventory
C) Current plus EWIP inventory

B) Current plus BWIP inventory
 
This is the basic concept of weighted average. FIFO considers current costs only.
In order to compute equivalent units of production using the FIFO method of process costing, work for the period must be broken down to units

A) Completed during the period and units in ending inventory
B) started during the period and units transfered out during the period
C) Completed from Beg. Inv., started andcompleted during the month, and units in E-Inventory.

C) Completed from Beg. Inv., started andcompleted during the month, and units in E-Inventory.
Materials are added at the beginning of a process in a process costing system. The beginning Work-in-Process Inventory was 30% complete as to conversion costs. Using first-in, first-out (FIFO) process costing, the total equivalent units for material are:

A) Units started this period in this process

B) Units started this period in this process plus the beginning inventory

C) Beginning inventory this period for this process
A) Units started this period in this process

Since materials are added at the start, beginning WIP will contain all the materials from last period. Only the goods started this month will contain this month's materials.
Additional materials are added in the second department of a four-department production process. However, this addition does not increase the number of units being produced in the second department, but will:

A) Increase the total cost per unit
B) Decrease the value of hte transferred in costs
C) decrease the total costs to account for
A) Increase the total cost per unit
Predetermined manufacturing overhead rates can be used in all of the following costing systems except:

A) Job costing
B) Process costing
C) Actual Costing
C) Actual costing
Which of the following statements is (are) false regarding first-stage and second-stage cost allocation methods?
(A) The basic difference between a first-stage cost allocation and a second-stage cost allocation is that cost pools are not used in first-stage cost allocations.
(B) Predetermined overhead rates are used in first-stage cost allocations but not in second-stage cost allocations.

A) Only A is true
B) Only B Is true
C) Both are true
D) Neither is true
C) Both are true
The electricity used for production machinery would be classified as a

A) Volume related
B) Batch-retlated
C) Product-related

A) Volume-Related
Which of the following costs is not a batch-related activity?

A) Material handling
B) Machine setups
C) Compliance costs

C) Compliance costs
Which of the following measures is used by traditional costing systems as an allocation base for allocating overhead costs to the units produced?

A) Volume-Related
B) Batch-Related
C) Product-Related

A) Volume-Related
Which of the following measures is used by activity-based costing (ABC) systems as an allocation base for allocating overhead costs to the units produced?

A) Volume
B) Batch
C) Product
D) All of these

D) All of these
Which of the following statements is (are) true? 
(1) Activity-based costs per unit are always greater than volume-based costs per unit.
(2) Volume-based costing has typically resulted in lower gross margins for high volume products and higher gross margins for low volume products.

A) Only 1 is true
B) Only 2 is true
C) Both are true
B) Only 2 is true
Multiple (departmental) manufacturing overhead rates are considered preferable to a single (plant wide) overhead rate when (CMA adapted)

A) manufacturing is limited to a single product flowing through identical departments in a fixed sequence.

B) various products are manufactured that do not pass through the same departments or use the same manufacturing techniques.

C)individual cost drivers cannot accurately be determined with respect to cause-and-effect relationships
B) various products are manufactured that do not pass through the same departments or use the same manufacturing techniques.
Companies using activity-based costing (ABC) have learned that costs are a function of

A) Volume and activities
B) Time and complexity
C) Volume and time
A) Volume and activities
Green Lumber Supply noticed a recent decline in the amount of purchases from a key customer. Worried that other customers might also reduce their purchases, Green's management decided to evaluate the cost of its delivery service. Which of the following cost drivers is more appropriate for general administrative costs of the Delivery Department?

A) Number of items ordered
B) Value of each order
C) Number of deliveries made
C) Number of deliveries made

The size of the administration of the delivery department would be related to the number of deliveries.
The amount of production possible under normal working conditions, including planned downtime and scheduled vacations, is called:

A) Actual capacity
B) Normal Capacity
C) Practical capacity

C) Practical Capacity
Activity-based cost management (ABM) can best be defined as:

A) The use of cost information gathered using activity based costing (ABC)

B) A cost system using multiple departmental overhead rates

C) An incentive system for a company's key decision-makers

A) The use of cost information gathered using activity based costing (ABC)
Which of the following activities is most likely to be classified as value-added for a merchandise company?

A) Purchasing
B) Waiting
C) Recieving

A) Purchasing

Waiting, receiving, and setting up are all nonvalue-added
In an activity-based cost management (ABM) system, facility-level costs are those that are incurred to:

A) Sustain the company's marketing program

B) Maintain the plant's production capacity

C) Support the research and development process

B) Maintain the plant's production capacity
Which of the following is not an example of an external failure cost?:

A) accepting company liability resulting from product failure

B) Experiencing decreasing sales as a result of poor-quality products

C) Testing products in use at the customer's site

C) Testing products in use at the customer's site
The amount of resources used in an activity-based costing (ABC) system for a specific activity is computed by multiplying the:

A) Cost driver rate and actual cost driver volume

B) COst driver rate and the planned cost driver volume

C) Overhead rate and the actual cost driver volume

A) Cost driver rate and actual cost driver volume

Resources used would be related to actual level of activity, so the actual cost driver volume should be used. Cost driver rate should be used since this is a measure of the resources being supplied
Which of the following statement is (are) true?
(A) Unused capacity costs incurred for the benefit of a company's customers (e.g., meet seasonal demands) should be assigned to the customers that require (use) the excess capacity. 
(B) In general, managerial decisions affecting capacity-level costs and activities also affect volume-level, batch-level, and product-level cost and activities.

A) Only A is true
B) Only B is true
C) Both are true
C) Both are true
Following statements is (are) true?
(A) Theoretical capacity is the long-run expected volume based on reasonably attainable working conditions.
(B) The cost of excess capacity is allocated to individual cost objects using the cost driver rate
A)Only A is true
B) Only B is true
C) Both are true 

Theoretical capacity is based on perfect conditions.
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