Cost Accounting Principals And Applications Chapter 1

Front 1

Three major manufacturing cost classifications

Back 1

Direct Materials, Direct Labor & Manufacturing Overhead

Front 2

The sum of direct labor and direct materials is called

Back 2

Prime Cost

Front 3

The three principal inventory accounts of a manufacturing concern are

Back 3

Raw Materials, Work in Process and Finished Goods

Front 4

The beginning work in process inventory cost is shown on the statement of

Back 4

Costs of Goods Manufactured

Front 5

What cost system is used when there is a continuous movement of similar goods through the manufacturing process?

Back 5

Process Cost System

Front 6

What are steps in a typical operating cycle?

Back 6

Procurement, Production, Warehousing, and Selling.

Front 7

The cost accounting system of a firm follows the flow of

Back 7

Work

Front 8

The journal entry to record the transfer of completed goods to the warehouse consists of a debit and credit to what accounts?

Back 8

Debit to Finished Goods and Credit to Work in Process.

Front 9

What what department is work preformed directly on the product?

Back 9

Producing

Front 10

What department assists producing departments?

Back 10

Service

Front 11

When more overhead has been charged to production than the total costs incurred, overhead is

Back 11

Overapplied

Front 12

The four standards of ethical conduct for management accountants are

Back 12

Competence, Confidentiality, Integrity, Objectivity

Front 13

Failure to disclose all relevant information is a violation of the standard of

Back 13

Objectivity

Front 14

Cost of Goods Manufactured in the income statement of a manufacturing concern serves the same function as Merchandise Purchases in the income statement of a retail concern.

Back 14

True

Front 15

The same Inventory accounts are used generally by both retail businesses and manufacturing concerns.

Back 15

False

Front 16

One function of a cost accounting system is to record and classify all costs according to type or nature.

Back 16

True

Front 17

All materials that are used in the actual manufacture of goods are classified as direct materials.

Back 17

False

Front 18

Raw materials purchased by a manufacturer may be considered finished goods by the seller.

Back 18

True

Front 19

The wages paid to a plant mechanic to repair equipment represent indirect labor.

Back 19

True

Front 20

Indirect material and indirect labor are classified as manufacturing overhead.

Back 20

True

Front 21

All indirect materials enter into, and become part of, the finished product.

Back 21

False

Front 22

The income statement and the statement of cost of goods manufactured provide all the information necessary to achieve profitable and efficient operations.

Back 22

False

Front 23

In the process cost system, usually no effort is made during the accounting period to allocate costs to specific units of products being manufactured.

Back 23

True

Front 24

Past data is used to determine standards for unit costs.

Back 24

True

Front 25

The job order cost system and the process cost system may both be used by the same company.

Back 25

True

Front 26

A function of cost accounting is to provide unit costs of products and processes.

Back 26

True

Front 27

The depreciation on a factory building is a type of indirect material.

Back 27

False

Front 28

Wages of the factory storeroom clerk would be classified as direct labor.

Back 28

False

Front 29

Companies find it useful to compare and analyze the differences between estimated costs and actual costs.

Back 29

True

Front 30

A budget is an overall financial plan for future activities.

Back 30

True

Front 31

Procurement refers to purchasing raw materials only.

Back 31

False

Front 32

The shipment of finished goods to customers is part of the warehousing step in the manufacturing cycle.

Back 32

False

Front 33

The cost of manufactured articles that are sold is obtained from the cost accounting records.

Back 33

True

Front 34

The accumulation of costs by cost centers helps in matching cost flow with workflow.

Back 34

True

Front 35

Total costs are useful indicators of efficient production operations.

Back 35

False

Front 36

The amount of manufacturing overhead costs applied to the job is based on an estimate.

Back 36

True

Front 37

Underapplied overhead indicates that insufficient manufacturing overhead costs were charged to production.

Back 37

True

Front 38

Overapplied overhead occurs when the amount of estimated manufacturing costs charged to production is greater than the actual costs.

Back 38

True

Front 39

The figures needed to prepare the statement of cost of goods manufactured and the income statement are obtained from the special cost accounts in the general ledger.

Back 39

True

Front 40

The producing departments assist the service departments.

Back 40

False

Front 41

Work in Process is the name of the account used to collect and record costs as direct materials, direct labor, and overhead are charged to production.

Back 41

True

Front 42

The work done by the purchasing agent's staff would be considered part of the procurement phase of the cost cycle.

Back 42

True

Front 43

The standard on competence states that management accountants have a duty to maintain their professional competance through continued development of their knowledge and skills.

Back 43

True

Front 44

A management accountant does not have an obligation to disclose unfavorable information.

Back 44

False

Front 45

Management accountants have a responsibility to avoid disclosing confidential information unless authorized to do so.

Back 45

False

Front 46

Statement of Cost of Goods Manufactured

Back 46

Raw Materials - Beginning Balance + Materials Purchases = Total Materials Available - Raw Materials Ending Balance = Total Materials Used - Indirect Materials Used + Direct Materials Used + Direct Labor + Manufacturing Overhead Applied = Total Manufacturing Costs + Work in Process Beginning Balance = Total Goods in Process - Work in Process Ending Balance = Cost of Goods Manufactured