Question

7. Which of the following describes the differences between job-order and process costing?
A.        Job-order costing is used in financial accounting while process costing is used in managerial accounting.

B.        Job-order costing can only be used by manufacturers; service enterprises    must use process costing.

3. Job-order costing is voluntary while process costing is mandatory.

D.        Job-order costing traces costs to jobs while process costing traces costs to
            departments and averages the costs among the units worked on during the period.

8. Which of the following costs is not added to the Work in Process account in a process
costing system?

1. manufacturing overhead
2. direct materials
3. direct labor
4. advertising

9. The equivalent units are calculated by:

            A.        taking the units needed to complete the beginning inventory, adding the     units started and taking the equivalent units in ending inventory.

            B.        taking the units completed plus the equivalent units in ending inventory.

            C.        taking the total units to account for and subtracting the equivalent units in beginning inventory.

            D.        taking the units started plus the equivalent units in ending inventory.         

10. Department A began the period with 45,000 units. During the period the department received another 30,000 units from the prior department and completed 60,000 units during the period. The remaining units were 75% complete. The amount of equivalent units in Department A’s work-in-process inventory at the end of the period is:

            A.        30,000.

            B.        22,500.

            C.        15,000.

            D.        11,250.

11. Which of the following costs is least likely to be a variable cost?

1. sales commissions
2. direct labor
3. indirect materials
4. supervisory salaries

12. Which of the following components are included in a mixed cost?

1. a sunk cost and an opportunity cost
2. a fixed cost and a variable cost
3. a manufacturing cost and a selling cost
4. a product cost and a period cost

Answer 1

7.Job-order costing traces costs to jobs while process costing traces costs to departments and averages the costs among the units worked on during the period.

As the Name Suggests, Job order costing is used to determine the cost of Specific jobs and Process costing to determine the cost of Process.

8.Advertising.

Cost of Advertising is sale cost and will not be part of the Process cost

9.Taking the units needed to complete the beginning inventory, adding the     units started and taking the equivalent units in ending inventory.

10.Ending Units = 45,000 + 30,000 - 60,000 = 15,000

As Provided 75% units are completed, so equivalent units = 15,000 x 75% = 11,250

11.supervisory salaries

12. a fixed cost and a variable cost