Cost Accumulation Systems MCQs

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A metal fabricating company uses a job-order cost system. The company expects to have small residual pieces of metal cuttings and shavings from all of...






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Kepler Optics makes lenses for telescopes. Because Kepler will only sell lenses of the highest quality, the normal spoilage during a reporting period...






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A manufacturing firm may experience both normal and abnormal spoilage in its operations. The costs of both normal and abnormal spoilage are accounted...






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What is the journal entry to record the purchase of materials on account?






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Darden Manufacturing, a calendar-year corporation, had $17,000 of spoilage during April that production management characterized as abnormal. The spo...






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A specialty instrument manufacturer is in the process of establishing a cost system. The company produces machines that are unique and distinctive. T...






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During the production of its single product, a company discovers that an unusual overnight power failure ruined an entire days in-process production....






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Trout Company manufactures a single product. During the manufacturing process, a small number of units do not pass final inspection and are destroyed....






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A company that uses a process costing system inspects its goods at the 60% stage of completion. If the firm’s ending work-in-process inventory is 8...






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When considering normal and abnormal spoilage, which one of the following is theoretically the best accounting method for spoilage in a process-costi...






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Colt Company uses a first-in, first-out (FIFO) process cost system to account for the cost of producing a chemical compound. As part of production, M...






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San Jose, Inc., uses a weighted-average process costing system. All materials are introduced at the start of manufacturing, and conversion cost is inc...






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Waller Co. uses a weighted-average process-costing system. Material B is added at two different points in the production of shirms, 40% is added when...






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A company uses a process cost system in accounting for its single product. The cost of units failing final inspection, termed normal spoilage, is add...






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Fact Pattern: Morris Metal Fabricators specializes in the production of metal antennae. The fabrication process includes three steps:...






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A profitable company with five departments uses plantwide overhead rates for its highly diversified operation. The firm is studying a change to eithe...






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A company with three products classifies its costs as belonging to five functions: design, production, marketing, distribution, and customer services....






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Young Company is beginning operations and is considering three alternative ways in which to allocate manufacturing overhead to individual units produ...






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Cost allocation is the process of assigning indirect costs to a cost object. The indirect costs are grouped in cost pools and then allocated by a comm...






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Activities, their drivers, and their costs may be classified as unit-level, batch-level, product-level, and facility-level. If activity-based costing ...






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Process value analysis is a key component of activity-based management that links product costing and






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Nile Co. is a manufacturer whose cost assignment and product costing procedures follow activity-based costing principles. Activities have been identi...






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The series of activities in which customer usefulness is added to the product is the definition of






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The use of activity-based costing (ABC) normally results in






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"Davis Corporation has used a traditional cost accounting system to apply quality control costs uniformly to all produc...






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Which of the following statements about activity-based costing (ABC) is false?






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Because of changes that are occurring in the basic operations of many firms, all of the following represent trends in the way indirect costs are alloc...






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Multiple or departmental overhead rates are considered preferable to a single or plantwide overhead rate when






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Factory Company makes two products, X and Z. X is being introduced this period, and Z has been in production for 2 years. For the period about to begi...






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"ALF Co. is an assisted-living facility that provides services in the form of residential space, meals, and other occupant as...






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Sanscom Corporation utilizes an activity-based costing system for applying costs to its two products, P and Q. In the assembly department, material h...






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When using activity-based costing techniques, which one of the following departmental activities would be expected to use machine hours as a cost dri...






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A company is considering the implementation of an activity-based costing and management program. The company






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All of the following are likely to be used as a cost allocation base in activity-based costing except the






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Which one of the following is least likely to be an objective of a cost accounting system?






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In a broad sense, cost accounting can best be defined within the accounting system as






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A manufacturing firm produces multiple families of products requiring various combinations of different types of parts. The manufacturer has identifi...






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Which one of the following is the focus of activity-based management?






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"Huntley Company has two departments, Machining and Assembly. This years budget for the plant contained the following inform...






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"Huntley Company has two departments, Machining and Assembly, at its Milwaukee plant. This years budget for the plant contai...






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Which one of the following is not a benefit of activity-based management?






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Fact Pattern: "Louis Diamonds manufactures diamond earrings and pendants. The company uses activitybased budgeting and has establish...






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A company manufactures a line of products that vary with complexity: a basic model, a standard model, and a deluxe model. The company uses 25 differe...






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Traditional budgeting methods look at historical data and current resources and then project forward. Activity-based budgeting is different in that ...






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Electronics, Inc., manufactures an increasing variety of consumer communications devices. The company has always used a traditional cost allocation s...






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Life-cycle costing






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Target pricing






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In target costing,






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"A companys product has an expected 4-year life cycle from research, development, and design through its withdrawal from the marke...






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The operations of Kalispell Company resulted in overapplied overhead for the month just completed. Which of the following journal entries can be corr...






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Average accumulated expenditures: