Accounting: Supply Chain Management Terms and Ans

Chapter 2
Job Order Costing

TRUE/FALSE

1. Cost accounting systems are used to supply cost data information on costs incurred by a manufacturing process or department.

ANS: T

2. A manufacturer may employ a job order cost system for some of its products and a process cost system for others.

ANS: T

3. A job order cost accounting system provides for a separate record of the cost of each particular quantity of product that passes through the factory.

ANS: T

4. A process cost accounting system provides for a separate record of the cost of each particular quantity of product that passes through the factory.

ANS: F

5. A process cost accounting system accumulates costs for each of the departments or processes within the factory.

ANS: T

6. A process cost accounting system is best used by manufacturers of like units of product that are not distinguishable from each other during a continuous production process.

ANS: T

7. The process cost system is appropriate where few products are manufactured and each product is made to customers' specifications.

ANS: F

8. A job order cost system would be appropriate for a crude oil refining business.

ANS: F

9. A law firm would use a job order cost system to accumulate all of the costs associated with a particular client engagement, such as lawyer time, copying charges, filing fees, and overhead.

ANS: T

10. The job order costing system is not used by service organizations.

ANS: F

11. The job order costing system is used by service firms to determine revenues, expenses, and ultimately profit.

ANS: T

12. Perpetual inventory controlling accounts and subsidiary ledgers are maintained for materials, work