Ver. A MA

Ver. A MA - Quiz 1-A Faculty of Management Technology...

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1 Faculty of Management Technology Managerial Accounting II Spring 2011 Quiz # 1-A Question 1: Short Essay: 1- Distinguish between actual costing and normal costing. Similarities: Both methods trace direct costs to a cost object the same way; by using actual direct cost rates times actual consumption. Differences: Under the Normal costing, the indirect costs are allocated based on the budgeted indirect cost rates times the actual activity consumption. Under the Actual costing, the indirect costs are allocated based on the actual indirect cost rates times the actual activity consumption. Question 2: True/false 1. Direct costs are allocated to the cost object using a cost-allocation method. Answer : False 2. Cost objects may be jobs, products, or customers. Answer : True 3. Actual costing is a method of job costing that allocates an indirect cost based on the actual indirect-cost rate times the actual quantity of the cost-allocation base. Answer : True 4. Indirect manufacturing costs should be allocated equally to each job. Answer : False 5. When actual indirect costs exceed allocated indirect costs, indirect costs have been overallocated. Answer : False
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2 Question 3: Multiple Choice: 1. Assigning direct costs to a cost object is called: a. cost allocation b. cost assignment c. cost pooling d. cost tracing 2. __________ is the process of distributing indirect costs to products. a. Cost allocation b. Job cost recording c. Cost pooling d. Cost tracing 3. A __________ links an indirect cost to a cost object. a. cost-allocation base b. cost pool c. cost assignment d. cost tracing 4. Place the following steps in the order suggested by the seven steps used to assign costs to individual jobs: A. Identify indirect costs B. Compute the total cost of the job C. Select cost-allocation bases
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Ver. A MA - Quiz 1-A Faculty of Management Technology...

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