D101 Cost and Managerial
Accounting Exam/93 Q’s and A’s
To create a system in which manufacturing costs are accumulated by
separate product orders or batches - -What is the major purpose and use of
job order costing?
To create a system that tracks both manufacturing and period costs and
assigns both to products
To create a system that is exclusively used by price makers and not by price
takers
To create a system in which manufacturing costs are tracked by period
instead of by products
To create a system in which manufacturing costs are accumulated by
separate product orders or batches
- Having accurate product or service cost information is important for both
price takers and price makers. - -Which statement is true?
Having accurate product or service cost information is important for price
takers, but not price makers.
Having accurate product or service cost information is important for both
price takers and price makers.
Having accurate produce or service cost information is not important for
either price takers or price makers.
Having accurate product or service cost information is important for price
makers, but not price takers.
- With accurate job cost information, the first company can set prices that
guarantee making a profit, can understand which costs need to be worked
on, and can determine which actions can be taken to make the company
more efficient and profitable. - -Two competitors exist in the same industry.
The first company has accurate product cost information while the second
company does not.
What is the reason behind why the first company is more successful than the
second?
With accurate job cost information, the first company can set prices higher
than the second company, thus earning higher profits.
With accurate job cost information, the first company can pay higher wages
to employees, thus motivating them more than the employees of the second
company.
,With accurate job cost information, the first company can set prices that
guarantee making a profit, can understand which costs need to be worked
on, and can determine which actions can be taken to make the company
more efficient and profitable.
With accurate job cost information, the first company can undercut the
second company's prices, thus driving the second company out of business.
- Products produced are distinct from each other, and the manufacturing
processes used are different for different products. - -Job order costing is
appropriate when which two conditions exist?
Products produced are all the same, and the manufacturing processes used
to produce them are the same.
Products produced are distinct from each other, and the manufacturing
processes used are different for different products.
Products produced are all the same, but the manufacturing processes used
to produce them are different for different products.
Products produced are distinct, but the manufacturing processes used are
the same for different products.
- So manufacturers can charge a price based on costs and a reasonable
markup - -
Why is having accurate product cost information important?
So companies can grow faster than all competitors in their industry
So companies can minimize the profits they are earning
So manufacturers can charge a price based on costs and a reasonable
markup
So manufacturers can charge a price based on estimated product costs, not
including a reasonable markup
- Commercial aircraft manufacturer - -Which type of company should use
job order costing?
Paper towel manufacturer
Commercial aircraft manufacturer
Soda bottler
Air filter manufacturer
- Identifying each specific job or product manufactured - -What is a
condition to using job order costing?
Tracking total direct labor costs for a period of time
, Having no manufacturing overhead assigned to the product cost
Identifying each specific job or product manufactured
Tracking total direct materials for a given period of time
- Direct materials, direct labor, and manufacturing overhead - -Which costs
should be assigned to each product under a job order costing system?
Manufacturing overhead, administrative expenses, and depreciation of office
buildings
Direct materials, direct labor, and manufacturing overhead
Direct labor, manufacturing overhead, and administrative expenses
Direct materials, direct labor, and administrative expenses
- Manufacturer of custom furniture - -Which company should use a job
ordering costing system?
Loan processing firm
Food processing plant
Manufacturer of custom furniture
Manufacturer of paint
- Job order costing - -The profitability of each separate job or product can
only be tracked using which product costing system?
Job order costing
Average unit costing
Profitability costing
Process costing
- When finished goods inventory is sold - -
In completing its job order costing journal entries, ABC Company's
accountants made a credit entry to finished goods inventory.
When is this entry made?
When finished goods inventory is sold
When work-in-process inventory is transferred to finished goods inventory
When the cost of goods manufactured is being calculated
When manufacturing overhead costs are applied to products being made
- Work-in-process inventory - -Which account are the costs of the raw
materials, direct labor, and miscellaneous manufacturing overhead
transferred to when the product is being manufactured?
Work-in-process inventory
Finished goods inventory
Cost of goods sold
Direct materials
Accounting Exam/93 Q’s and A’s
To create a system in which manufacturing costs are accumulated by
separate product orders or batches - -What is the major purpose and use of
job order costing?
To create a system that tracks both manufacturing and period costs and
assigns both to products
To create a system that is exclusively used by price makers and not by price
takers
To create a system in which manufacturing costs are tracked by period
instead of by products
To create a system in which manufacturing costs are accumulated by
separate product orders or batches
- Having accurate product or service cost information is important for both
price takers and price makers. - -Which statement is true?
Having accurate product or service cost information is important for price
takers, but not price makers.
Having accurate product or service cost information is important for both
price takers and price makers.
Having accurate produce or service cost information is not important for
either price takers or price makers.
Having accurate product or service cost information is important for price
makers, but not price takers.
- With accurate job cost information, the first company can set prices that
guarantee making a profit, can understand which costs need to be worked
on, and can determine which actions can be taken to make the company
more efficient and profitable. - -Two competitors exist in the same industry.
The first company has accurate product cost information while the second
company does not.
What is the reason behind why the first company is more successful than the
second?
With accurate job cost information, the first company can set prices higher
than the second company, thus earning higher profits.
With accurate job cost information, the first company can pay higher wages
to employees, thus motivating them more than the employees of the second
company.
,With accurate job cost information, the first company can set prices that
guarantee making a profit, can understand which costs need to be worked
on, and can determine which actions can be taken to make the company
more efficient and profitable.
With accurate job cost information, the first company can undercut the
second company's prices, thus driving the second company out of business.
- Products produced are distinct from each other, and the manufacturing
processes used are different for different products. - -Job order costing is
appropriate when which two conditions exist?
Products produced are all the same, and the manufacturing processes used
to produce them are the same.
Products produced are distinct from each other, and the manufacturing
processes used are different for different products.
Products produced are all the same, but the manufacturing processes used
to produce them are different for different products.
Products produced are distinct, but the manufacturing processes used are
the same for different products.
- So manufacturers can charge a price based on costs and a reasonable
markup - -
Why is having accurate product cost information important?
So companies can grow faster than all competitors in their industry
So companies can minimize the profits they are earning
So manufacturers can charge a price based on costs and a reasonable
markup
So manufacturers can charge a price based on estimated product costs, not
including a reasonable markup
- Commercial aircraft manufacturer - -Which type of company should use
job order costing?
Paper towel manufacturer
Commercial aircraft manufacturer
Soda bottler
Air filter manufacturer
- Identifying each specific job or product manufactured - -What is a
condition to using job order costing?
Tracking total direct labor costs for a period of time
, Having no manufacturing overhead assigned to the product cost
Identifying each specific job or product manufactured
Tracking total direct materials for a given period of time
- Direct materials, direct labor, and manufacturing overhead - -Which costs
should be assigned to each product under a job order costing system?
Manufacturing overhead, administrative expenses, and depreciation of office
buildings
Direct materials, direct labor, and manufacturing overhead
Direct labor, manufacturing overhead, and administrative expenses
Direct materials, direct labor, and administrative expenses
- Manufacturer of custom furniture - -Which company should use a job
ordering costing system?
Loan processing firm
Food processing plant
Manufacturer of custom furniture
Manufacturer of paint
- Job order costing - -The profitability of each separate job or product can
only be tracked using which product costing system?
Job order costing
Average unit costing
Profitability costing
Process costing
- When finished goods inventory is sold - -
In completing its job order costing journal entries, ABC Company's
accountants made a credit entry to finished goods inventory.
When is this entry made?
When finished goods inventory is sold
When work-in-process inventory is transferred to finished goods inventory
When the cost of goods manufactured is being calculated
When manufacturing overhead costs are applied to products being made
- Work-in-process inventory - -Which account are the costs of the raw
materials, direct labor, and miscellaneous manufacturing overhead
transferred to when the product is being manufactured?
Work-in-process inventory
Finished goods inventory
Cost of goods sold
Direct materials
