Chap003

Cost Management: Strategies for Business Decisions

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Chapter 03 - Cost Accumulation for Job-Shop and Batch Production Operations Chapter 03 Cost Accumulation for Job-Shop and Batch Production Operations True / False Questions 1. Job costing or job-order costing treats each individual job as the unit of output and assigns, or allocates costs to each job as resources are used. TRUE Difficulty: Easy Learning Objective: 1 2. In order to qualify for job-order costing, each job must consist of a single, unique product consisting of only one unit produced of relatively high value. FALSE Difficulty: Easy Learning Objective: 1 3. Process Costing treats each individual job as the unit of output and assigns, or allocates costs to each job as resources are used. FALSE AICPA FN: Measurement Difficulty: Easy Learning Objective: 1 4. Process costing treats all units processed during a time period as the output to be costed and does not separate and record costs for each unit produced. TRUE Difficulty: Easy Learning Objective: 1 3-1
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Chapter 03 - Cost Accumulation for Job-Shop and Batch Production Operations 5. As output becomes more unique and separately identifiable, operation costing becomes more appropriate. FALSE AICPA FN: Measurement Difficulty: Medium Learning Objective: 1 6. In job costing, each unit produced is of relatively low value. FALSE Difficulty: Medium Learning Objective: 1 7. Process costing does not separate and record costs for each unit produced. TRUE Difficulty: Medium Learning Objective: 1 8. In process costing, the units of output are relatively homogeneous and indistinguishable from one another. TRUE Difficulty: Medium Learning Objective: 1 9. Operation costing is appropriate when companies produce large batches of similar products and wish to trace the direct labor component of each unit. FALSE AICPA FN: Measurement Difficulty: Medium Learning Objective: 1 3-2
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10. The basic cost flow equation in job order costing is: Beginning balance + resource transfers out - resource transfers in = ending balance. FALSE Difficulty: Medium Learning Objective: 2 11. The Work-in- Process inventory account represents the cost of all active jobs that have not yet been completed. TRUE Difficulty: Easy Learning Objective: 3 12. The Finished Goods account collects the total cost of all jobs completed and sold during the accounting period. FALSE Difficulty: Medium Learning Objective: 3 13. When a company uses job-order costing, information regarding the costs of a specific job will be found in the company's general ledger. FALSE Difficulty: Medium Learning Objective: 3 14. The primary cost document for a job is called a job-cost record or job-cost sheet. TRUE
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This document was uploaded on 06/26/2011.

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Chap003 - Chapter 03 - Cost Accumulation for Job-Shop and...

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