21. Job order costing cannot be used for a service company.
22. An activity-based costing system cannot help managers make better product pricing decisions.
23. In activity-based costing, only one cost driver should be used in applying overhead.
24. Activity-based costing systems always result in more accurate measurements of unit costs.
25. An overhead application rate is a device used to assign overhead costs to units of product in proportion to some "activity base" that can be traced directly to the manufactured products.
Multiple Choice Questions
26. Which of the following costing systems would always use job cost sheets?
A. Job order costing.
B. Process costing.
C. Activity-based costing.
D. All three systems.
27. The basic types of cost accounting systems are:
A. Job order cost systems, activity based cost systems, and process cost systems.
B. Direct cost systems and indirect cost systems.
C. Completed job cost systems and work in process cost systems.
D. Fixed cost systems and variable cost systems.
28. A job order cost system would be appropriate in the manufacture of:
A. Paints.
B. Custom-made furniture.
C. Breakfast cereal.
D. Standard-grade plywood.
29. Under a job order cost system, costs are accumulated for:
A. Each department in the production cycle.
B. Each batch of production, known as a job or lot.
C. Each individual unit produced.
D. Each job supervisor.
30. A job cost sheet usually contains a record of each of the following except:
A. The cost of direct materials charged to a particular job.
B. The overhead costs actually incurred on a particular job.
C. The cost of direct labor charged to a particular job.
D. The overhead cost applied to a particular job.