Ac505 Quiz 1 Essay

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Page: | 1 2 | 1. | Question : | (TCO F) For which situation(s) below would an organization be more likely to use a job-order costing system of accumulating product costs rather than a process costing system? | | | Student Answer: | | A steel factory that processes iron ore into steel bars | | | | A factory that processes sugar and other ingredients into black licorice | | | | A costume maker that makes specialty costumes for figure skaters | | | | All of these | | Instructor Explanation: | Chapter 3 | | | | Points Received: | 5 of 5 | | Comments: | | | | 2. | Question : | (TCO F) Process costing would be appropriate for each of the following except: | | |…show more content…
During the month, the company purchased an additional $68,000 of raw materials. During May, $92,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $5,000. The debits to the Work in Process account as a consequence of the raw materials transactions in May total: | | | Student Answer: | | $92,000. | | | | $0. | | | | $68,000. | | | | $87,000. | | Instructor Explanation: | Chapter 3 | | age: | 1 2 | 1. | Question : | (TCO F) Some companies use process costing and some use job-order costing. Which method a company uses depends on its industry. A number of companies in different industries are listed below: i. Specialty coffee roaster (roasts small batches of specialty coffee beans) ii. Custom aircraft builder iii. Brick manufacturer iv. Microbrewery that produces a number of different beers v. Steel company making chain link fences from iron ore For each company, indicate whether the company is most likely to use job-order costing or process costing. | | | Student Answer: | | i. Specialty coffee roaster would use Job Order Costing. ii. Custom aircraft builder would use Job-Order Costing. iii. Brick Manufacturer would use Process Costing. iv. Microbrewery that produces a number of different beers would use Job-Order Costing. v. Steel company making chain link fences
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