ACNT 2402

1. When materials are purchased in a process costing system, a materials account is debited with the cost of the materials. TRUE 2. Costs are accumulated by department in a process costing system. TRUE 3. The following journal entry would be made in a processing costing system when units that have been completed with respect to the work done in Processing Department Z are transferred from Processing Department Z to Processing Department Y: Work in Process, Department Z XX X Work in ...

hapter 07 -- Master Budgeting – Study Guide 1. The cash budget is usually prepared after the budgeted income statement. FALSE 2. The manufacturing overhead budget is typically prepared before the production budget. FALSE 3. Self-imposed budgets prepared by lower-level managers should be scrutinized by higher levels of management. TRUE 4. The basic idea underlying responsibility accounting is that each manager should be held responsible for the overall profit of the company to ensure t...

Chapter 12 -- Statement of Cash Flows – Study Guide 1. Collecting the principal on a loan to another company would be reported on the investing activities section of the statement of cash flows. TRUE 2. Money received from issuing bonds payable would be included as part of a company's financing activities on the statement of cash flows. TRUE 3. The collection of a loan made to a supplier would be treated as an investing activity on a statement of cash flows. TRUE 4. Paying taxes to ...

Chapter 06 -- Variable Costing and Segment Reporting: Tools for Management – Study Guide 1. Under variable costing, variable production costs are not treated as product costs. FALSE 2. Under variable costing, fixed manufacturing overhead cost is not treated as a product cost. TRUE 3. Under variable costing, product costs consist of direct materials, direct labor, and variable manufacturing overhead. TRUE 4. The costs assigned to units in inventory are typically lower under variable c...

1. The use of a predetermined overhead rate in a job-order cost system makes it possible to compute the total cost of a job before production is begun. FALSE 2. If direct labor-hours is used as the allocation base in a job-order costing system, but overhead costs are not caused by direct-labor hours, then jobs with high direct labor requirements will tend to be undercosted relative to jobs with low direct labor requirements. FALSE 3. The formula for computing the predetermined overhead r...

Chapter 05 -- Cost-Volume-Profit Relationships – Study Guide 1. Incremental analysis is generally the most complicated and least direct approach to decision making. TRUE 2. One assumption in CVP analysis is that the number of units produced and sold does not change. FALSE 3. Reynold Enterprises sells a single product for $25. The variable expense per unit is $15 and the fixed expense per unit is $5 at the current level of sales. The company's net operating income will increase by $10...

1. Batch-level activities are performed each time a batch of goods is processed. The cost of a batch-level activity is proportional to the number of units in the batch. FALSE 2. Activity-based costing involves a two-stage allocation process in which overhead costs are first assigned to departments and then allocated to products using activity measures. FALSE 3. In the second-stage allocation in activity-based costing, overhead costs are allocated from activity cost pools to products. TRU...