Test Bank for Managerial Accounting 10th Edition Crosson, Needles

Chapter 2: Costing Systems: Job Order Costing Student: ___________________________________________________________________________ 1. A job order costing system measures costs of each processes using an inventory accou ...

Chapter 2: Costing Systems: Job Order Costing Student: ___________________________________________________________________________ 1. A job order costing system measures costs of each processes using an inventory account for each. True False 2. The computations for costs to be transferred out of Work in Process Inventory differ if the production process involves multiple departments rather than a single department. True False 3. Like a job order costing system, a process costing system is restricted to one Work in Process Inventory account. True False 4. Identical products are produced in a continuous flow production process. True False 5. In a job order costing system, costs are traced to a specific job order. True False 6. An advertising company would probably use a process costing system. True False 7. Companies that produce custom-made products usually use a process costing system. True False 8. Job order costing is used by companies that make unique or special-order products. True False Full file at http://testbankscafe.eu/Test-Bank-for-Managerial-Accounting-10th-Edition-Crosson,-Needles 9. In a process costing system, product costs are traced to work cells. True False 10. A job order costing system is used by companies that manufacture large amounts of similar products. True False 11. A typical operations costing system for a manufacturer incorporates parts of both job order costing and process costing. True False 12. The production process determines the product costing system needed. True False 13. A process costing system first assigns the costs to the products manufactured by the departments, and then traces the costs of direct materials, direct labor, and overhead to departments. True False 14. A company using the periodic inventory system records cost of goods sold when products are sold. True False 15. The purchasing process begins with a request for indirect materials, whereas the manufacturing process begins with a request for direct materials. True False 16. Costs for individual jobs are maintained on material cost cards when job order costing is in use. True False 17. Job order cost cards for incomplete jobs make up the ending balance of the Finished Goods Inventory account. True False Full file at http://testbankscafe.eu/Test-Bank-for-Managerial-Accounting-10th-Edition-Crosson,-Needles 18. When a job has been completed, all of the costs assigned to that job are moved to the Cost of Goods Sold account. True False 19. In a job order costing system, when overhead costs are applied, they decrease the Work in Process Inventory account. True False 20. In a job order costing system, indirect labor costs incurred are debited to the Overhead account. True False 21. In a job order costing system, the transfer of overhead costs to the Work in Process Inventory account must take place before product unit costs can be computed. True False 22. In a job order costing system, when indirect materials are used, the Overhead account is increased. True False 23. In a job order costing system, indirect labor costs are recorded by increasing the Payroll Payable account and increasing the Overhead account. True False 24. In a job order costing system, when the goods are sold, the Cost of Goods Sold account is increased, and the Finished Goods Inventory account is decreased for the selling price of the goods sold. True False 25. The ending balance in the Work in Process Inventory account equals the ending Overhead balance. True False 26. A zero balance in Work in Process Inventory at the start of the period means all previously completed products have been shipped. True False Full file at http://testbankscafe.eu/Test-Bank-for-Managerial-Accounting-10th-Edition-Crosson,-Needles 27. To prepare financial statements at the end of the accounting period, the actual overhead cost for the period and the estimated overhead that was applied during the period must be reconciled in a job order costing system. True False 28. If applied overhead exceeds actual overhead, cost of goods sold must be increased by the amount of the overapplied overhead in a job order costing system. True False 29. Job order cost cards and cost flows through the inventory accounts form the core of a job order costing system. True False 30. Regardless of the cost accounting system used, when the products are completed, they are transferred from work in process inventory to finished goods inventory. True False 31. Job costs in a service organization end up in the Finished Goods Inventory account when a job is completed. True False 32. In cost-plus contracts, a predetermined amount of profit is added to the cost of the contract. True False 33. In a service organization using a job order costing system, actual overhead will be the same as applied overhead. True False 34. The ending balance of Work in Process account is compared with the total costs shown on the job order cost cards to ensure correctness. True False Full file at http://testbankscafe.eu/Test-Bank-for-Managerial-Accounting-10th-Edition-Crosson,-Needles 35. In a job order costing system, a separate job order cost card is used for each individual job. True False 36. After a job is completed, the product’s unit cost can be determined from the job order cost card. True False 37. The process of assigning a collection of indirect costs is termed as cost pooling. True False 38. Predetermined overhead rate is calculated by dividing actual overhead costs by actual cost driver activity. True False 39. Overhead applied is calculated by multiplying predetermined activity rate and actual cost driver activity. True False 40. If the actual overhead costs are more than applied overhead costs, the difference represents overapplied overhead costs. True False 41. When planning, managers allocate overhead costs using either the traditional or ABC approach. True False 42. Managers’ knowledge on unit cost helps in setting reasonable selling prices for products. True False 43. Job estimates must be compared with actuals for evaluating performance. True False