For which of the following businesses would the job order cost? system be appropriate? Student Answer: auto repair shop?

1. Question : For which of the following businesses would the job order cost 

system be appropriate?

Student Answer:

auto repair shop 

crude oil refinery 

drug manufacturer 

beer distillery 

2. Question : Before prorating the manufacturing overhead costs at the end 

of 2008, the Cost of Goods Sold and Finished Goods Inventory 

had applied overhead costs of $57,500 and $20,000 in them, 

respectively. There was no Work-in-Process at the beginning or 

end of 2008. During the year, manufacturing overhead costs of 

$74,000 were actually incurred. The balance in the Applied 

Manufacturing Overhead was $77,500 at the end of 2008. If the 

under or overapplied overhead is prorated between Cost of 

Goods Sold and the inventory accounts, how much will be 

allocated to the Finished Goods Inventory?

Student Answer:

$903 

$1,217 

$1,283 

$2,597 

3. Question : Which of the following statements is (are) true regarding 

product costing?

(A) A job is a cost object that can be easily and conveniently 

distinguished from other cost objects.

(B) Job cost sheets are used in accounting systems as a 

subsidiary ledger for the Work-in-Process account.

Student Answer:

Only A is true 

Only B is true. 

Both A and B are true. 

Neither A nor B is true. 

4. Question : The Viva Company had 20,000 units in process on December 

31, 2008 which was 80% complete as to materials but only 40% 

complete as to conversion costs. The company's records show 

40,000 units were transferred to the Finished Goods Inventory 

during January 2009. On January 31, 2009, 15,000 units were 

on hand which were 30% complete as to conversion costs and 

60% complete as to materials. What are the equivalent units of 

production for the conversion costs in January, assuming Viva 

uses first-in, first-out (FIFO)?

Student Answer:

34,000 

35,000 

36,500 

41,500 

5. Question : RST Company incurred $126,000 in material costs during July. 

Additionally, the 12,000 units in the Work-in-Process Inventory 

on July 01 had materials assigned to them of $32,000, even 

though they were only 5% complete as to materials. No 

additional units were started during July, and there were no 

incomplete units on hand on July 31. What is the material cost 

per unit for July, assuming RST uses weighted-average process 

costing?

Student Answer:

$10.50 

$11.59 

$13.17 

$15.49 

6. Question : Cost pools are used with: 

(A). Plant Wide Rates

(B). Department Rates

Student Answer:

Only A is true. 

Only B is true. 

Neither A nor B is true. 

Both A and B are true. 

7. Question : Which of the following accounts is used to accumulate the 

actual manufacturing overhead costs incurred during a period?

Student Answer:

Applied Manufacturing Overhead 

Work-in-Process Inventory 

Manufacturing Overhead Control 

Cost of Goods Sold 

Finished Goods Inventory 

8. Question : Which of the following statements regarding first-in, first-out 

(FIFO) process costing is/are true?

(A) First-in, first-out (FIFO) process costing transfers out the 

costs in beginning inventory before transferring out the costs 

associated with units started and completed.

(B) First-in, first-out process costing requires one additional 

step in assigning costs to the units transferred out and the 

ending Work-in-Process Inventory.

Student Answer:

A only. 

B only. 

Both A and B. 

Neither A nor B. 

9. Question : Which one of the following accounts is not used in an activity-based costing (ABC) system?

Student Answer:

Materials Inventory 

Work-in-Process Inventory 

Finished Goods Inventory 

Overhead Applied 

Allocations Incurred 

10. Question : Materials are added at the beginning of a process in a process 

costing system. The beginning Work-in-Process Inventory was 

30% complete as to conversion costs. Using first-in, first-out 

(FIFO) process costing, the total equivalent units for material 

are

Student Answer:

beginning inventory this period for this process. 

units started this period in this process. 

units started this period in this process plus the beginning 

inventory. 

units started this period in this process plus 70% of the 

beginning inventory this period.