Question 1

Managers use a job-costing system when the output comprises many homogenous (identical or almost identical)units.

Accepted Answer

Managers use a process-costing system for homogenous units, while a job-costing system is used for unique or custom orders.

Question 2

Managers use a process-costing system when the cost object is a distinct output called a job.

Accepted Answer

Managers use a process-costing system when they have a continuous flow of identical products, rather than distinct outputs called jobs. Job-costing systems are used for the latter.```

Question 3

The actual cost-driver rate measures _____________ capacity utilisation.

Accepted Answer

The actual cost-driver rate measures the actual capacity utilization, which is the amount of resources used during a specified period. It is calculated by dividing the total cost incurred during the period by the actual level of activity. The budgeted cost-driver rate is based on estimated, rather than actual, capacity utilization. The estimated cost-driver rate is based on projections of future activity levels, and past cost-driver rates are not relevant to the current period.

Question 4

In job costing,managers trace costs to a specific job.

Accepted Answer

In job costing, costs are tracked and allocated to specific jobs, allowing managers to determine the profitability of individual projects or orders.

Question 5

A major difference between job costing and process costing is the extent of averaging used to calculate the unit costs of products or services.

Accepted Answer

Job costing calculates the unit cost of specific jobs or projects while process costing averages the costs of a larger production process over all units produced.

Question 6

Within each operation,all product units are treated ______________,using identical amounts of the operation's resources.

Accepted Answer

The given statement mentions that all product units are treated identically within each operation, using identical amounts of resources. Therefore, option B (exactly alike) is the most appropriate choice. Option A (differently) goes against the statement mentioned in the question. Option C (similarly) might seem to be a suitable choice, but it does not convey the exactness and uniformity mentioned in the question. Option D (uniquely) goes against the idea of identical treatment of product units within each operation.

Question 7

An operation is a standardised method or technique performed repetitively,often on different materials,resulting in different finished goods.

Accepted Answer

This statement is true as an operation involves a repetitive process that is performed on different materials, resulting in various finished goods.

Question 8

A(n)_______________ is a standardised method or technique performed repetitively,often on different materials,resulting in different finished goods.

Accepted Answer

The answer of A(n)_______________ is a standardised method or technique...

Question 9

The shorter the period used to calculate the cost-driver rate,the ______________ the influence of seasonal patterns and of non-seasonal,sporadic costs on the dollar-amount of the cost pool (the numerator).

Accepted Answer

The shorter the period used to calculate the cost-driver rate, the greater the influence of seasonal patterns and of non-seasonal, sporadic costs on the dollar-amount of the cost pool. This is because a shorter period does not average out these fluctuations as effectively as a longer period would.

Question 10

When identical or similar units of products or services are mass-produced rather than processed as individual jobs,managers use process costing to calculate an average production cost for all units produced.

Accepted Answer

This statement is true. Process costing is a cost accounting method used in situations where large quantities of identical or similar products or services are produced through a continuous process. The method calculates the average cost of production for all units produced in a given period of time. This is in contrast to job costing, which tracks the cost of individual units produced as separate jobs.

Question 11

A(n)_________________system is a hybrid costing system applied to batches of similar,but not identical,products.

Accepted Answer

Operation costing is a hybrid costing system used for batches of similar, but not identical, products, combining features of both job costing and process costing systems.

Question 12

Multiple operations are usually conducted within a(n):

Accepted Answer

The answer of Multiple operations are usually conducted within a(n):
...

Question 13

When the job continues across accounting periods,costs remain in work in process until the job has been completed.

Accepted Answer

This is true. As costs are incurred during the process of completing a job, they remain in the work in process account until the job is finished. Once the job is completed, the costs are then transferred to the finished goods inventory account or the cost of goods sold account.

Question 14

In a process-costing system,individual jobs differ in the extent to which they use quantities of production resources,so it would be incorrect to use average production costs for different jobs.

Accepted Answer

In a process-costing system, average production costs are used for different jobs as the focus is on the cost per unit of a particular process or department. Each unit produced in the same process or department has similar resource consumption, hence using average production costs is appropriate.

Question 15

Irrespective of the costing system that a manager or management accountant might select,the _________ rate is calculated in the same way.

Accepted Answer

The answer of Irrespective of the costing system that a...

Question 16

When management accountants use process-costing systems,they separate costs into cost categories according to when they are introduced into the process.

Accepted Answer

In process costing systems, costs are categorized based on the stage of the production process in which they are incurred, allowing for a more accurate allocation of production costs to units of product.

Question 17

A hybrid costing system blends characteristics of both job-costing and process costing systems.

Accepted Answer

A hybrid costing system includes elements of both job-costing and process costing, allowing for more flexibility and customization in tracking costs. This type of system is often used in manufacturing or production settings where different products or processes may require different costing methods.

Question 18

Costing systems typically fall neatly into either job-costing or process-costing categories.

Accepted Answer

Many costing systems incorporate elements of both job-costing and process-costing systems to address the specific needs of the company or industry, making the distinction not always clear-cut.

Question 19

Many managers believe that calculating the indirect cost rate ________________ provides a more representative and reasonable way to assign indirect costs to jobs.

Accepted Answer

Annual indirect cost rate calculation is preferred by many managers to assign indirect costs to jobs as it provides a more accurate picture of the company's indirect expenses over a longer period of time. Monthly, biweekly or daily calculations may not provide a comprehensive view of the costs incurred by the company.

Question 20

Few production systems are a hybrid because they rarely have some custom-order production features and some mass-production features.

Accepted Answer

Hybrid production systems are common, as they are designed to have a mix of custom-order production and mass-production features to increase efficiency and flexibility in meeting customer demands.

Quiz 5: Estimating the Cost of Producing Services