The key distinction between job costing and process costing is:
The accumulation of costs to assign to cost objects.
Standard costs are:
Planned costs the firm should attain
The two main advantages of using predetermined factory overhead rates are to provide more accurate unit cost information and to:
Provide cost information on a timely basis.
The ideal criterion for choosing an allocation base for overhead is:
A cause-and-effect relationship.
If a firm is following the cost leadership strategy, and overhead accounts are complex, then the:
Traditional volume-based job costing will not usually provide the needed cost accuracy.
Which of the following can produce unit product costs that fluctuate significantly?
Actual costing system
A normal costing system uses actual costs for direct materials and direct labor, and
Estimated costs for factory overhead
Which documents records and summarizes the costs of direct materials, direct labor, and factory overhead for a particular job?
Job cost sheet
The total cost of direct materials, direct labor, and factory overhead transferred from the Work-in-Process Inventory account to the Finished Goods Inventory account during an accounting period is:
Cost of goods manufactured
Firms should use a process costing system when they produce products that:
Pass through a series of manufacturing departments.
The number of the same or similar units that could have been produced given the amount of work actually performed on both complete and partially complete units is referred to as:
Equivalent units
Process Costing Steps
1. determine the physical flow of units
2. compute the equivalent units of production
3. compute the cost per equivalent unit of production
4. assign and reconcile costs