Factory overhead costs do not
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Factory overhead costs do not include which of thefollowing:
a. insurance b. heating c. taxes d, hourly wages
2. The most common method used when assuming how inventory flowsthrough the manufacturing process is:
a. LIFO b. FIFO c. LILO d. FILO
3. Activity-based activities include all of the following,except:
a. direct material b. fabrication c. assembly d. selling andadministration
4. Wages of a company’s janitors or cleaning crew would beconsidered:
a. direct labor b. direct input c. factory overhead d.offset expenses
5. Cost of production reports can be used to comparematerials output quantity to materials input quantity is known as____________ of a process.
a. equivalency b. yield c. subtotal units d. indirectmaterial
6. Businesses like attorneys, accountants, and hospitals use_________ systems.
a. process cost b. period costs c. department allocation d.job order costs
7. ________ costs include direct labor and factoryoverhead.
a. prime b. product c. conversion d. period
8. When is a cost of production report prepared for eachprocessing department?
a. periodic intervals b. random intervals c. Specificintervals d. Unspecified intervals
9. Which of the following would use job order costsystems?
a. paper producers b. oil refineries c. food processors. d.apparel manufacturers
10. Which type of cost systems is best when trying todetermine how to charge customers for their services?
a. product cost systems b. activity-based pricing systems c.job cost systems d. multiple department cost systems
Answer:
Question 1:
Option C. Taxes
Taxes are administrative expense but not a factory overhead.
Hourly wages can be a factory overhead if used for the entirefactory
Question 2 :
Option A. LIFO
LIFO is the most common method as it is a practical method ofselling old stock firstly.
Question 3 :
Option A. Direct Material
Direct material is not an activity it is a seperate direct cost.Activity costing works for indirect costs and activities.
Question 4:
Option C. Factory overhead
As the wages of such people are not attributable directly toproduction they are considered as factory overhead.
Question 5:
Option B. Yield.
An yield is the measure for input and output of materials.
Question 6:
Option D. Job order costs
They will be billing based on the hours spent on the job andresource cost allocated to the job.
Question 7 :
Option A. Prime cost
Prime cost = direct materials + direct labor + factoryoverhead
Question 8 :
Option A. Periodical intervals
Cost of production report prepared periodically for decisionmaking and monitoring periodically.
Question 9:
Option B. Oil refineries
Job order cost is suitable for oil refineries in the suitableoptions. As the other options will use process costing.
Question 10 :
Option B. Activity based pricing
Activity based costing determines the cost for each activity.So, the activities involved for each activity can be calculated andcharged to customers.
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