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WorksheetsUPS 3 REVISION
Total questions: 20
Worksheet time: 10mins
Marginal or Variable costing is the most useful costing technique for the…
Shareholders
Management
Auditors
Creditors
Which of the following costs is not included while computing unit product cost under marginal or variable costing?
Direct materials cost
Direct labor cost
Variable manufacturing overhead cost
Fixed manufacturing overhead cost
Which costing method is used to help with decision making?
Absorption costing
Marginal costing
Activity based costing
Standard costing
What is the key difference between Absorption Costing and Marginal Costing?
Absorption Costing treats Manufacturing Overhead as a period cost.
Marginal Costing treats Fixed Manufacturing Overhead as a period cost.
Absorption Costing only considers variable costs to calculate net income.
Marginal Costing only considers variable costs to calculate net income.
"A costing approach in which only variable manufacturing costs are product costs and fixed manufacturing costs are period costs (expenses)." This statement best describe...
Absorption Costing
Marginal Costing
Normal Costing
Actual Costing
Marginal Costing is prepared to internal users. Select correct item that will be reported in Marginal Costing Income Statement
Variable cost of goods sold
Gross profit
Total operating expenses
Contribution margin per unit
Manufacturing overhead:
can be either a variable cost or a fixed cost.
includes the costs of shipping finished goods to customer s
includes all factory labor costs.
includes all fixed costs.
"Unsold goods will have fixed overhead cost elements. These costs are in the value of inventories until the product is sold." This statement best describe the ending inventory under which costing?
Absorption Costing
Marginal Costing
Normal Costing
Actual Costing
Which of the following source documents is used to record the amount of direct materials on the job cost sheet?
Time Ticket
Material Requisition Form
Production Cost Report
Cash Book
A job cost sheet includes,
Direct materials, applied overhead, administrative costs.
Direct materials, direct labor, applied overhead.
Direct labor, actual overhead, selling costs.
Direct materials, direct labor, operating costs.
Which one of the following best describes a job cost sheet?
It is a form used to record the costs chargeable to a specific job and to determine the total and unit costs of the completed job.
It is used to track manufacturing overhead costs to specific jobs.
It is used by management to understand how direct costs affect profitability.
It is a daily form that management uses for tracking worker productivity on which employee raises are based.
Explain the concept of applied overhead.
The amount of direct manufacturing cost actually occurred involved in certain period of time.
Plan manufacturing overhead cost.
Scheduled manufacturing cost, actual overhead cost is still unknown.
Estimated overhead based on actual activity level
Which of the company that might not apply job order costing?
Aircrafts at Boeing
Audit process at Price Waterhouse Coopers
Movies produced by Universal Studios
Beverage production by Pepsi
Differences between a job order cost system and a process cost system include all of the following except the
documents used to track costs.
point at which costs were totalled.
unit cost computations.
flow of costs.
Conversion costs are the sum of:
Fixed and variable overhead costs
labour costs and overhead costs
Direct material costs and overhead costs
Direct labour and indirect labour costs
Which of the following items is NOT characteristic of a process costing system?
Once production begins, it continues until the finished product emerges
The products produced are heterogeneous in nature
The focus is on continually producing homogeneous products
When the finished product emerges, all units have precisely the same amount of materials, labour and overhead
A process cost system would be used for all of the following products except
chemicals.
computer chips.
motion pictures.
soft drinks.
In a process cost system, a production cost report is prepared
only for the first processing department.
for all departments in the aggregate.
for each processing department.
only for the last processing department.
Costs that were incurred in a previous department that are brought into this department as part of a product's cost are
Transferred-in costs
Transferred-out costs
Costs to account for
Costs accounted for
Which is true of process costing?
Overhead is assigned only to the last process
Costs are accumulated in each production department
it tracks and assigns both period and product costs
It uses only one Work-in-Process Inventory account
