25. There is an inverse relationship between prevention costs and failure costs.

ANS: T DIF: Moderate OBJ: 2-4

26. There is a direct relationship between prevention costs and failure costs.

ANS: F DIF: Moderate OBJ: 2-4

27. In an actual cost system, actual production overhead costs are accumulated in an Overhead Control

account and assigned to Work in Process at the end of the period.

ANS: T DIF: Moderate OBJ: 2-4

28. In an normal cost system, actual production overhead costs are accumulated in an Overhead
Control

account and assigned to Work in Process at the end of the period.

ANS: F DIF: Moderate OBJ: 2-4

29. In a normal cost system, factory overhead is applied to Work in Process using a predetermined

overhead rate.

ANS: T DIF: Moderate OBJ: 2-4

30. In an actual cost system, factory overhead is applied to Work in Process using a predetermined

overhead rate.

ANS: F DIF: Moderate OBJ: 2-4

31. In an actual cost system, overhead is assigned to Work in Process Inventory with a debit entry to the

account.

ANS: T DIF: Easy OBJ: 2-4

32. In an actual cost system, overhead is assigned to Work in Process Inventory with a credit entry to
the

account.

ANS: F DIF: Easy OBJ: 2-4

33. It is not necessary to prepare the Cost of Goods Manufactured statement prior to preparing the
Cost of

Goods Sold statement.

ANS: F DIF: Moderate OBJ: 2-5