(Test Bank) A manufacturing company may choose to use either a job order cost accounting system or a process cos

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23. A manufacturing company may choose to use either a job order cost accounting system or a process cost accounting system, without considering the manner in which it produces its products. Answer: False Blooms Taxonomy: Remember AACSB: Analytic AICPA BB: Industry AICPA FN: Decision MakingDifficulty: 1 Easy Learning Objective: 16-A1 Topic: Process Costing Topic: Job Order Costing [Question] 24. Process and job order manufacturing operations both combine materials, labor, and overhead items in the process of producing products. Answer: True Blooms Taxonomy: Remember AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 1 Easy Learning Objective: 16-A1 Topic: Process Costing Topic: Job Order Costing [Question] 25. Accountants use the term "process cost accounting system" because these systems use a number of trained individuals and computers to process the collected cost information. Answer: FalseBlooms Taxonomy: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-A1 Topic: Process Costing [Question] 26. Process costing is applied to operations with repetitive production and heterogeneous products. Answer: False Blooms Taxonomy: Remember AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 1 Easy Learning Objective: 16-A1 Topic: Process Costing[Question] 27. In process cost accounting, all labor that is applied exclusively in a single production department is considered to be direct labor. Answer: True Blooms Taxonomy: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-A1 Topic: Process Costing [Question] 28. Process cost accounting systems consider overhead costs to include those costs that cannot be readily identified with any specific process. Answer: True Blooms Taxonomy: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 MediumLearning Objective: 16-A1 Topic: Process Costing [Question] 29. A company that uses a process cost accounting system maintains separate Goods in Process Inventory accounts for each of its manufacturing departments. Answer: True Blooms Taxonomy: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-A1 Topic: Process Costing [Question] 30. Companies that use a series of manufacturing processes to produce standardized products should use a process cost accounting system. Answer: True Blooms Taxonomy: Remember AACSB: AnalyticAICPA BB: Industry AICPA FN: Reporting Difficulty: 1 Easy Learning Objective: 16-A1 Topic: Process Costing [Question] 31. When defining direct costs and indirect costs in process costing, the process is the cost object. Answer: True Blooms Taxonomy: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-A1 Topic: Process Costing [Question] 32. Process cost accounting systems are used only by companies that manufacture physical products; companies and other organizations that provide services to their customers do not use process cost accounting. Answer: False Blooms Taxonomy: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-A1 Topic: Process Costing [Question] 33. Process cost accounting systems are commonly used by companies that manufacture standardized products by passing them through a series of manufacturing steps. Answer: True Blooms Taxonomy: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-A1 Topic: Process Costing[Question] 34. A unique feature of process costing systems is the use of a single Goods in Process Inventory control account. Answer: False Blooms Taxonomy: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-A1 Topic: Process Costing [Question] 35. The use of process costing is of little benefit to a service type of operation. Answer: False Blooms Taxonomy: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-A1 Topic: Process Costing[Question] 36. In process cost accounting, the classification of materials as direct or indirect depends on whether they are clearly linked with a specific process. Answer: True Blooms Taxonomy: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-A1 Topic: Process Costing [Question] 37. In process cost accounting, materials are always classified as indirect if they are not physically incorporated into the final product. Answer: False Blooms Taxonomy: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: ReportingDifficulty: 2 Medium Learning Objective: 16-A1 Topic: Process Costing [Question] 38. Direct costs in process cost accounting include only those costs that can be readily identified with particular product units. Answer: False Blooms Taxonomy: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-A1 Topic: Process Costing [Question] 39. Process cost accounting systems consider direct costs to include those costs that can be readily identified with a particular process. Answer: True Blooms Taxonomy: UnderstandAACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-A1 Topic: Process Costing [Question] 40. Hybrid systems contain aspects of both process and job order operations. Answer: True Blooms Taxonomy: Remember AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 1 Easy Learning Objective: 16-A2 Topic: Hybrid Costing [Question] 41. Hybrid costing systems can only be applied to agricultural products. Answer: FalseBlooms Taxonomy: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-A2 Topic: Hybrid Costing [Question] 42. When a process cost accounting system records the purchase of raw materials, the Raw Materials Inventory account is credited. Answer: False Blooms Taxonomy: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-P1 Topic: Debit Topic: Credit Topic: Direct Materials[Question] 43. When a process cost accounting system records the purchase of raw materials, the Raw Materials Inventory account is debited. Answer: True Blooms Taxonomy: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-P1 Topic: Debit Topic: Credit Topic: Direct Materials [Question] 44. When a process cost accounting system assigns the cost of materials to a production department, the journal entry debits the Raw Materials Inventory account and credits the Goods in Process Inventory account for that department. Answer: False Blooms Taxonomy: UnderstandAACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-P1 Topic: Debit Topic: Credit Topic: Direct Materials [Question] 45. If Department A uses $10,000 of direct materials and Department B uses $15,000 of direct materials, the following journal entry would be recorded by the process cost accounting system: Goods in Process Inventory, Department A 10,000 Goods in Process Inventory, Department B 15,000 Raw Materials Inventory 25,000 Answer: True Blooms Taxonomy: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: ReportingDifficulty: 2 Medium Learning Objective: 16-P1 Topic: Debit Topic: Credit Topic: Direct Materials [Question] 46. If Department J uses $40,000 of direct materials and Department K uses $70,000 of direct materials, the following journal entry would be recorded by the process cost accounting system: Raw Materials Inventory 70,000 Goods in Process Inventory, Department J 40,000 Goods in Process Inventory, Department K 30,000 Answer: False Blooms Taxonomy: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-P1Topic: Debit Topic: Credit Topic: Direct Materials [Question] 47. If Department Q uses $60,000 of direct materials and Department T uses $15,000 of direct materials, the following journal entry would be recorded by the process cost accounting system: Goods in Process Inventory, Department Q 60,000 Goods in Process Inventory, Department T 15,000 Finished Goods Inventory 75,000 Answer: False Blooms Taxonomy: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-P1 Topic: Debit Topic: Credit Topic: Direct Materials[Question] 48. A materials consumption report is a source document that summarizes the materials used during a reporting period. Answer: True Blooms Taxonomy: Remember AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 1 Easy Learning Objective: 16-P1 Topic: Materials Consumption Report [Question] 49. The following journal entry would be made to record the use of direct materials in the reporting period covered by the information: Goods in Process Inventory, Pickling Dept 16,000 Goods in Process Inventory, Canning Dept 3,000 Raw Materials Inventory 19,000 Answer: TrueBlooms Taxonomy: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-P1 Topic: Debit Topic: Credit Topic: Direct Materials [Question] 50. After all process cost accounting journal entries are recorded and posted for a reporting period, the Factory Payroll account should have a zero balance. Answer: True Blooms Taxonomy: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-P2 Topic: Factory Payroll[Question] 51. If the factory labor cost for a month was $123,000 (paid in cash), the following journal entry would be recorded by the process cost accounting system: Factory Payroll 123,000 Cash 123,000 Answer: True Blooms Taxonomy: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-P2 Topic: Factory Payroll Topic: Debit Topic: Credit [Question] 52. If Department N incurred direct labor cost of $22,000 and Department O incurred direct labor cost of $43,000, the following journal entry would be recorded by the process cost accounting system:Factory Payroll 65,000 Goods in Process Inventory, Department N 22,000 Goods in Process Inventory, Department O 43,000 Answer: False Blooms Taxonomy: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 3 Hard Learning Objective: 16-P2 Topic: Factory Payroll Topic: Debit Topic: Credit [Question] 53. If Department T uses $89,000 of direct labor and Department V uses $11,000 of direct labor, the following journal entry would be recorded by the process cost accounting system: Goods in Process Inventory, Department T 89,000 Goods in Process Inventory, Department V 11,000 Factory Overhead 100,000Answer: False Blooms Taxonomy: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 3 Hard Learning Objective: 16-P2 Topic: Debit Topic: Credit Topic: Factory Payroll [Question] 54. If Department G uses $53,000 of direct labor and Department H uses $21,000 of direct labor, the following journal entry would be recorded by the process cost accounting system:Goods in Process Inventory, Department G 53,000 Goods in Process Inventory, Department H 21,000 Factory Payroll 74,000 Answer: True Blooms Taxonomy: Apply AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 3 Hard Learning Objective: 16-P2 Topic: Debit Topic: Credit Topic: Factory Payroll [Question] 55. In process cost accounting, direct labor includes only the labor that is applied directly to the products. Answer: False Blooms Taxonomy: Understand AACSB: Analytic AICPA BB: IndustryAICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-P2 Topic: Process Costing [Question] 56. In some circumstances, a process cost accounting system can classify wages paid to maintenance workers as direct labor costs instead of factory overhead. Answer: True Blooms Taxonomy: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-P2 Topic: Process Costing Topic: Direct Labor[Question] 57. In a process costing system, factory labor costs incurred in a reporting period are presented on the income statement as Factory Labor Expense. Answer: False Blooms Taxonomy: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-P2 Topic: Factory Labor [Question] 58. The following journal entry would be made to record the use of direct labor in the reporting period covered by the information: Factory Payroll 6,100 Goods in Process Inventory, Pickling Dept 4,000 Goods in Process Inventory, Canning Dept 2,100 Answer: False Blooms Taxonomy: UnderstandAACSB: Analytic AICPA BB: Industry AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 16-P2 Topic: Debit Topic: Credit Topic: Direct Labor [Question] 59. Factory overhead costs can be allocated by a process cost accounting system to the output of production departments by using a predetermined overhead allocation rate. Answer: True Blooms Taxonomy: Understand AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Difficulty: 2 Medium Learning Objective: 16-P3 Topic: Factory Overhead