Two Basic Types Of Cost Accounting

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Register to read the introduction… Cost accounting systems accumulate costs and then assign them to products or services.

10. There are two basic types of cost accounting systems: job order costing and periodic costing.

11. Job order costing is applicable to manufacturing firms only and not service firms.

12. The cost of all direct materials used on a job is debited to the Finished Goods Inventory account.

13. When materials are used as indirect materials, their cost is debited to the Factory Overhead account.

14. The predetermined overhead allocation rate is used to apply overhead cost to products.

15. The balance of the Factory Overhead account appears on the income statement.

16. In a job order cost accounting system, indirect labor costs are debited to the Factory Overhead account.

Chapter 03

17. In a process manufacturing system, products pass through a series of sequential processes.

18. A production department is an organizational unit of a factory that has the responsibility for at least partially manufacturing or producing a product or service.

19. To determine unit cost under a process cost accounting system, equivalent units produced must be calculated if the company has goods in process
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$.02 per direct labor hour.
B. $46.25 per direct labor hour.
C. $36.25 per direct labor hour.
D. $10 per direct labor hour.

Chapter 05

96. A cost that remains the same in total even when volume of activity varies is a:
A. Fixed cost.
B. Variable cost.
C. Step-wise variable cost.
D. Standard cost.

97. A cost that changes in total proportionately to changes in volume of activity is a(n):
A. Fixed cost.
B. Incremental cost.
C. Variable cost.
D. Product cost.

98. A cost that remains constant over a limited range of volume, but increases by a lump sum when volume increases beyond a maximum amount, is a(n):
A. Step-wise cost.
B. Fixed cost.
C. Incremental cost.
D. Opportunity cost.

99. A cost that can be separated into fixed and variable components is called a:
A. Mixed cost.
B. Step-variable cost.
C. Composite cost.
D. Differential cost.

A term describing a firm's normal range of operating activities is:
A. Relevant range of operations.
B. Break-even level of operations.
C. Margin of safety of operations.
D. Relevant operating analysis.

100. The excess of expected sales over the sales level at the break-even point is known as the:
A. Sales turnover.
B. Profit

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