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Accounting System, Cost, Ovehead

1. A system of accounting for production operations that uses a periodic inventory system is called a:

A. Manufacturing accounting system.
B. Production accounting system.
C. General accounting system.
D. Cost accounting system.
E. Finished goods accounting system.
2. A job cost sheet shows information about each of the following items except:

A. The direct labor costs assigned to the job.
B. The name of the customer.
C. The costs incurred by the marketing department in selling the job.
D. The overhead costs assigned to the job.
E. The direct materials costs assigned to the job.
3. Canoe Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs. Canoe Company's production costs for the year were: direct labor, $30,000; direct materials, $50,000; and factory overhead applied, $6,000. The overhead application rate was:

A. 5.0%.
B. 12.0%.
C. 20.0%.
D. 500.0%.
E. 16.7%.
4. If it is a material amount, overapplied or underapplied overhead should be disposed of by allocating it to:

A. Cost of goods sold and finished goods.
B. Finished goods and goods in process.
C. Goods in process, finished goods, and cost of goods sold.
D. Goods in process, if immaterial.
E. Raw materials, goods in process, and finished goods.
5. A process cost summary is a managerial accounting report that describes:

A. The costs charged to a department.
B. The equivalent units of production by the department.
C. How the costs were assigned to the output.
D. Physical transfers for a department.
E. All of the above.

6. Direct material costs are recorded:

A. Indirectly to Goods in Process account.
B. Indirectly to a Finished Goods account.
C. Directly to a Goods in Process account.
D. Directly to a Finished Goods account.
E. Directly to a Cost of Goods Sold account.
7. In a process costing system, when manufacturing overhead costs are applied to the cost of production, they are debited to:

A. the Finished Goods Inventory account.
B. the Cost of Goods Sold account.
C. the Goods in Process Inventory account.
D. the Manufacturing Overhead account.
E. the Raw Materials Inventory account
8. An expense that does not require allocation between departments is a(n):

A. Common expense.
B. Indirect expense.
C. Direct expense.
D. Administrative expense.
E. All of the above.
9. A single cost incurred in producing or purchasing two or more essentially different products is a(n):

A. Product cost.
B. Incremental cost.
C. Differential cost.
D. Joint cost.
E. Fixed cost.
10. A system of assigning costs to departments and products on the basis of a variety of activities instead of only one allocation base is called:

A. A responsibility accounting system.
B. A cost center accounting system.
C. Controllable costing.
D. Activity-based costing.
E. Performance costing

Solution Summary

The solution answers multiple choice questions related to accounting system, cost, overheads with some of them definind the term itself.