15.Which of the following industries would be most likely to use a process costing system?
A) Ship builder
B) Movie studio
C) Oil refinery
D) Hospital
16. A process cost system is employed in those situations where:
A) many different products, jobs, or batches of production are being produced each period.
B) where manufacturing involves a single, homogeneous product that flows evenly through the production process on a continuous basis.
C) a service is performed such as in a law firm or an accounting firm.
D) full or absorption cost approach is not employed.
17. Emco Company uses direct labor cost as a basis for computing its predetermined overhead rate. In computing the predetermined overhead rate for last year, the company misclassified a portion of direct labor cost as indirect labor. The effect of this misclassification will be to:
A) understate the predetermined overhead rate.
B) overstate the predetermined overhead rate.
C) have no effect on the predetermined overhead rate.
D) cannot be determined from the information given.
18. Which of the following entries would record correctly the application of overhead cost?
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A) A Above
B) B Above
C) C Above
D) D Above
19. The operations of Kalispell Company resulted in overapplied overhead for the month just completed. Which of the following journal entries can be correct if Kalispell allocates underapplied or overapplied overhead among accounts?
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A) A Above
B) B Above
C) C Above
D) D Above
20. Which of the following entries would record correctly the monthly salaries earned by the top management of a manufacturing company?
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A) A Above
B) B Above
C) C Above
D) D Above
21. The journal entry to record applying overhead during the production process is:
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A) A Above
B) B Above
C) C Above
D) D Above
22. When manufacturing overhead is applied to production, it is added to:
A) the Cost of Goods Sold account.
B) the Raw Materials account.
C) the Work in Process account.
D) the Finished Goods inventory account.
23. Which of the following statements is true?
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A) Only statement I is true.
B) Only statement II is true.
C) Both statements I and II are true.
D) Statements I, II, and III are all true.
24. On the Schedule of Cost of Goods Manufactured, the final Cost of Goods Manufactured figure represents:
A) the amount of cost charged to Work in Process during the period.
B) the amount of cost transferred from Finished Goods to Cost of Goods Sold during the period.
C) the amount of cost placed into production during the period.
D) the amount of cost of goods completed during the current year whether they were started before or during the current year.