EXAM 2

True/False
Indicate whether the statement is true or false.

____ 1. Manufacturing and service firms producing unique products or services require process-costing accounting systems.

____ 2. In process costing, each producing department has its own work-in-process account.

____ 3. The difference between actual overhead and applied overhead is the overhead variance.

____ 4. Using a time ticket, the cost accounting department can enter the cost of direct materials onto the correct job-order cost sheet.

____ 5. Process costing accumulates costs by processing departments rather than by individual jobs.

____ 6. Process costing is most appropriate for manufacturers of homogeneous products.

____ 7. A production report contains information on costs transferred in from prior departments as well as costs added in the department such as direct materials, direct labor, and overhead.

____ 8. Equivalent units of output are the complete units that could have been produced given the total amount of manufacturing effort expended for the period under consideration.

Multiple Choice
Identify the choice that best completes the statement or answers the question.

____ 11. The predetermined overhead rate is
a.|calculated at the end of the month.|
b.|equal to actual overhead divided by actual activity level for a period.|
c.|equal to estimated overhead divided by actual activity level for a period .|
d.|calculated at the beginning of the year.|

____ 12. In a normal costing system, the cost of a job includes
a.|actual direct materials, actual direct labor and estimated (applied) overhead|
b.|estimated direct materials, estimated direct labor and estimated overhead.|
c.|actual direct materials, actual direct labor and actual overhead.|
d.|actual direct materials, actual direct labor, actual overhead and actual selling cost.|
e.|none of