Question : PART I — MULTIPLE CHOICE (30 points) Instructions:  Designate the best : 1311525

PART I — MULTIPLE CHOICE (30 points)

 

Instructions:  Designate the best answer for each of the following questions.

 

*1.              In a JIT cost accounting system,

a.              no inventories are kept on hand.

b.              no manufacturing overhead costs are incurred.

c.              a company strives to have the right amount of materials, parts, and products on hand.

d.              conversion costs are eliminated.

 

2.              The number of purchase orders would be an appropriate cost driver for

a.              inspecting and testing cost.

b.              machining cost.

c.              ordering and receiving materials cost.

d.              supervising cost.

 

3.              Which one of the following is a product-level activity?

                      Assembly of staplers

                      Every tenth stapler produced is tested to be sure it meets quality standards.

                      The factory janitor is paid.

                      A setup is undertaken when the model of staplers to be produced changes.

 

4.              The primary benefit of activity-based costing is that it leads to

a.              more cost pools used to assign overhead costs to products.

b.              more accurate product costing.

c.              enhanced control over overhead costs.

d.              better management decisions.

 

5.              All of the following are value-added activities in a manufacturing operation except

a.              assembly.

b.              engineering design.

c.              inspections.

d.              machining.

6.              ABC costing is an approach for allocating

a.              direct materials to products.

b.              direct labor to products.

c.              manufacturing overhead to products.

d.              direct materials and direct labor to products.

 

7.              The first step in activity-based costing is to

a.              assign overhead costs for each activity cost pool to products.

b.              compute the activity-based overhead rate.

c.              identify cost drivers that accurately measure each activity’s contribution to the finished product.

d.              identify and classify the major activities involved in the manufacture of specific products.

 

8.              Given the following data, compute equivalent units of production for conversion costs:

Beginning Work in Process—8,000 units, 40% complete

Units Completed and Transferred Out—90,000 units

Ending Work in Process—5,000 units, 20% complete.

a.              95,000

b.              91,000

c.              87,800

d.              94,200

 

9.              When there is beginning work in process, units transferred out can be computed by subtracting

a.              ending work in process units from the units accounted for.

b.              ending work in process units from the units started into production.

c.              beginning work in process units from the units to be accounted for.

d.              beginning work in process units from the units started into production.

 

10.              Given the following data, compute equivalent units of production for materials. Materials are added at the beginning of the process.

Beginning Work in Process—8,000 units, 40% complete

Units Completed and Transferred Out—90,000 units

Ending Work in Process—5,000 units, 20% complete.

a.              98,200

b.              91,000

c.              90,000

d.              95,000

 

11.              Which of the following does not describe a characteristic of process costing?

a.              Job cost sheets must pass from one production department to the next on a daily basis.

b.              Once production begins, it continues until the finished product emerges.

c.              All units of production receive precisely the same amount of material, labor, and overhead.

d.              Work in process accounts are maintained for each production department.

 

 

 

12.              Which item is not a calculation performed on a production cost report?

                      Number of physical units to be accounted for

                      Materials cost per equivalent unit

                      Cost of goods transferred out of finished goods

                      Cost of goods transferred remaining in work in process