Question 1. Additional materials are added in the second department of a four-department production process. However, this addition does not increase the number of units being produced in the second department, but will

increase the equivalent units of production.
increase the total cost per unit.
decrease the value of the transferred-in costs.
decrease the total costs to account for.

Question 2. Which of the following statements is (are) false regarding first-stage and second-stage cost allocation methods?

(A) The basic difference between a first-stage cost allocation and a second-stage cost allocation is that cost pools are not used in first-stage cost allocations.

(B) Predetermined overhead rates are used in first-stage cost allocations but not in second-stage cost allocations.
Only A is false
Only B is false.
Neither A nor B is false.
Both A and B are false.

Question 3. Activity-based costing (ABC) is a costing technique that uses a two stage allocation process. Which of the following statements best describes these two stages?

The costs are assigned to activities, and then to the products based upon their use of the activities.
The costs are assigned to departments, and then to the products based upon their use of activity resources.
Service department costs are allocated to the production departments, and then to the products based upon their use of the activities.
Indirect costs are assigned to activities, and then to the products based upon the direct cost resources used by the activities.

Question 4. The number of services provided by an accounting firm would be classified as a(n)

volume-related activity.
batch-related activity.
product-related activity.
facility-related activity.

Question 5. 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.
Only A is true
Only B is true.
Both A and B are true.
Neither A nor B is true.

Question 6. For which of the following businesses would the job order cost system be appropriate?
auto repair shop
crude oil refinery
drug manufacturer
beer distillery

Question 7. The predetermined overhead rate for manufacturing overhead for 2008 is $4.00 per direct labor hour. Employees are expected to earn $5.00 per hour and the company is planning on paying its employees $100,000 during the year. However, only 75% of the employees are classified as "direct labor." What was the estimated manufacturing overhead for 2008?
$60,000
$75,000
$80,000
$93,750

Question 8. The Blue Corporation started and completed 4,800 units during February. Blue started the month with 700 units in process (40% complete) and ended the month with 400 units in process (40% complete). How many units were transferred to the Finished Goods Inventory during February?
5,500.
5,380.
5,100.
4,400.
4,100.

Question 9. Which of the following accounts is used to accumulate the actual manufacturing overhead costs incurred during a period?
Applied Manufacturing Overhead
Work-in-Process Inventory
Manufacturing Overhead Control
Cost of Goods Sold
Finished Goods Inventory

Question 10. Which of the following statements is (are) true?

(A). Activity-based costs per unit are greater than volume-based costs per unit.

(B). Volume-based costing has typically resulted in lower gross margins for high volume products and higher gross margins for low volume products.
Only A is true.
Only B is true.
Both A and B are true.
Neither A nor B are true.