Multiple Choice Questions
1.Which product costing system distributes costs evenly across total production?
A. Process cost system
B. Job order cost system
C. Standard cost system
D. Variable cost system
2.A process cost system would be appropriate for all of the following except:
A. Production of gasoline.
B. Manufacture of smart phones.
C. Services provided by public accounting firm.
D. Manufacture of granola bars.
3.Which of the following is
incorrect
regarding a job-order cost system?
A. Unit cost is determined for each product or job.
B. Source documents are used to assign costs to the subsidiary accounts.
C. Costs are accumulated for homogenous products that are produced through a continuous process.
D. Costs may be accumulated for a batch of work that contains many units of a product.
4.In which of the following industries would a job-order cost system most likely be used?
A. Oil refinery
B. Small appliances manufacturer
C. Construction of cell towers
D. Beverage manufacturer
5.A process cost system is used when:
A. Homogenous items are produced in a continuous flow production process.
B. Batches of identical inventory items are produced.
C. A company produces unique, one-of-a-kind inventory items.
D. All of these.
6.An example of a product/service that would most likely be accounted for using a process cost system would be:
A. Vitamin manufacturer.
B. Printing services.
C. Manufacturer of motor homes.
D. Auto repair services.
7.Select the
incorrect
statement regarding cost flows through a job-order cost system.
A. Product costs are accumulated separately by job.
B. The job order cost system is patterned after the physical flow of products as they move through the production process.
C. The three inventory accounts used are maintained on a perpetual basis.
D. Costs are averaged for all jobs produced within a department.
8.In a job-order cost system, as goods are produced, product costs (direct material, direct labor, and overhead) are accumulated in the:
A. Work in process account.
B. Materials account.
C. Finished goods account.
D. Cost of goods sold account.
9.Which of the following accounts is reported on the balance sheet?
A. Raw materials inventory.
B. Work in process inventory.
C. Finished goods inventory.
D. All of these.
10.Select the
incorrect
statement regarding cost flows through a process cost system.
A. The process cost system is patterned after the physical flow of products as they move through the production process.
B. The three inventory accounts used are maintained on a perpetual basis.
C. Product costs are accumulated separately by job.
D. A separate work in process account is maintained for each department or process.