ACCT 2302 Final Review Questions with Correct Answers Latest Update 2025/2026
Managerial accounting information - Answers Involves gathering information about costs for
planning and control decisions.
Managerial accounting is different from financial accounting in that - Answers Managerial
accounting includes many projections and estimates whereas financial accounting has a
minimum of predictions
Classifying costs by behavior with changes in volume of activity involves - Answers Identifying
fixed costs and variable costs
Products that are in the process of being manufactured but are not yet complete are called -
Answers work in process inventory
Continuous improvement... - Answers Rejects the notion of "good enough."
Marshall Corporation incurred costs for materials and labor needed to manufacture its products.
These costs are examples of - Answers product costs
Craigmont Company's direct materials costs are $3,500,000, its direct labor costs total
$7,450,000, and its factory overhead costs total $5,450,000. Its conversion costs total: -
Answers $12,900,000
Costs Added = Direct Materials used + direct labor + factory overhead
The two basic types of cost accounting systems are - Answers job order costing and process
costing
The rate established at the beginning of a period that uses estimated overhead and an
allocation factor such as estimated direct labor, and that is used to assign overhead cost to
jobs, is the: - Answers predetermined overhead rate
When direct labor costs are recorded in a job costing - Answers work in process inventory is
debited and factory wages payable is credited
A company that uses a job order costing system would make the following entry to record the
flow of direct materials into production - Answers debit Work in Process Inventory, credit Raw
Materials Inventory
The overhead cost applied to a job during a period is recorded with a credit to Factory Overhead
and a debit to - Answers Work in Process Inventory
What is the best explanation for why it is necessary to calculate equivalent units of production
in a process costing environment? - Answers All of the work to make a unit 100% complete and
ready to move to the next stage of production or to finished goods inventory may not have been
completed in a single time period
, In a process operation, the direct labor of a production department includes: - Answers All labor
used exclusively by that department, even if the labor is not applied to the product itself
To compute equivalent units of production, one must be able to reasonably estimate - Answers
the percentage of completion
Which of the following products is least likely to be produced in a process operation?
- Smartphones
- Slacks for casual wear
- Baseball caps
- Calculators
- Custom cabinets - Answers custom cabinets
In a process costing system, direct material costs incurred are recorded - Answers Directly to a
Work in Process Inventory account
What types of overhead allocation methods result in the use of more than one overhead rate
during the same time period? - Answers Departmental overhead rate method and activity-based
costing
In what order do the steps of implementation follow - Answers - Identify the activities and the
overhead costs they cost
- Trace overhead costs to cost pools
- Compute the allocation rates
- Use the activity overhead rates to assign overhead costs to cost objects
What are three advantages of activity-based costing over traditional volume-based allocation
methods? - Answers More accurate product costing, more effective cost control, and better
focus on the relevant factors for decision making
Which of the following costing systems is more accurate for overhead cost allocation and most
likely to allow managers the ability to make better pricing decisions?
- Departmental overhead allocation rates
- Plantwide overhead rate
- Activity-based costing
- Traditional costing system
Managerial accounting information - Answers Involves gathering information about costs for
planning and control decisions.
Managerial accounting is different from financial accounting in that - Answers Managerial
accounting includes many projections and estimates whereas financial accounting has a
minimum of predictions
Classifying costs by behavior with changes in volume of activity involves - Answers Identifying
fixed costs and variable costs
Products that are in the process of being manufactured but are not yet complete are called -
Answers work in process inventory
Continuous improvement... - Answers Rejects the notion of "good enough."
Marshall Corporation incurred costs for materials and labor needed to manufacture its products.
These costs are examples of - Answers product costs
Craigmont Company's direct materials costs are $3,500,000, its direct labor costs total
$7,450,000, and its factory overhead costs total $5,450,000. Its conversion costs total: -
Answers $12,900,000
Costs Added = Direct Materials used + direct labor + factory overhead
The two basic types of cost accounting systems are - Answers job order costing and process
costing
The rate established at the beginning of a period that uses estimated overhead and an
allocation factor such as estimated direct labor, and that is used to assign overhead cost to
jobs, is the: - Answers predetermined overhead rate
When direct labor costs are recorded in a job costing - Answers work in process inventory is
debited and factory wages payable is credited
A company that uses a job order costing system would make the following entry to record the
flow of direct materials into production - Answers debit Work in Process Inventory, credit Raw
Materials Inventory
The overhead cost applied to a job during a period is recorded with a credit to Factory Overhead
and a debit to - Answers Work in Process Inventory
What is the best explanation for why it is necessary to calculate equivalent units of production
in a process costing environment? - Answers All of the work to make a unit 100% complete and
ready to move to the next stage of production or to finished goods inventory may not have been
completed in a single time period
, In a process operation, the direct labor of a production department includes: - Answers All labor
used exclusively by that department, even if the labor is not applied to the product itself
To compute equivalent units of production, one must be able to reasonably estimate - Answers
the percentage of completion
Which of the following products is least likely to be produced in a process operation?
- Smartphones
- Slacks for casual wear
- Baseball caps
- Calculators
- Custom cabinets - Answers custom cabinets
In a process costing system, direct material costs incurred are recorded - Answers Directly to a
Work in Process Inventory account
What types of overhead allocation methods result in the use of more than one overhead rate
during the same time period? - Answers Departmental overhead rate method and activity-based
costing
In what order do the steps of implementation follow - Answers - Identify the activities and the
overhead costs they cost
- Trace overhead costs to cost pools
- Compute the allocation rates
- Use the activity overhead rates to assign overhead costs to cost objects
What are three advantages of activity-based costing over traditional volume-based allocation
methods? - Answers More accurate product costing, more effective cost control, and better
focus on the relevant factors for decision making
Which of the following costing systems is more accurate for overhead cost allocation and most
likely to allow managers the ability to make better pricing decisions?
- Departmental overhead allocation rates
- Plantwide overhead rate
- Activity-based costing
- Traditional costing system
