DOMINGUEZ_MCC COST ACCOUNTING
1. In Managerial accounting, the information may be
current or forecasted, quantitative or qualitative,
monetary, or nonmonetary and most of all the data are
futuristic and some of the costs are not recorded on the
accounting books of the organization. TRUE
2. Cost accounting is not an interaction between financial
and managerial accounting. FALSE
3. These are the inventory accounts of a manufacturing
company. MATERIAL INVENTORY, WIP INVENTORY,
FINISHED GOODS INVENTORY
4. Business entities that require information systems
which
provide the necessary financial data. MANUFACTURING,
MERCHANDISING, SERVICE
5. Manufacturing company normally buys a product that
is ready for resale when it is received. FALSE-
MERCHANDISING
6. The information produced by cost accounting system
provides a basis for determining product cost and aids
management in planning and controlling operations.
TRUE
7. It is the expanded phase of general or financial
accounting. COST ACCOUNTING
8. It is the process of monitoring the company's
operations and determining whether the objectives
identified in the planning process are being
accomplished. CONTROL
9. Cost information is useful in making an important
making decision such as determining the selling price of
a or future benefit to the organization. COST
product, meeting competition, bidding on contracts, and
analyzing profitability. TRUE
10. It is the process of establishing objectives or goals for
the firm and determining the means by which the firm
will attain them. PLANNING
11. Job order costing is a product costing system used by
companies that make a large number of similar products
or maintain a continuous production flow. FALSE-
STANDARD COSTING
12. The use of accounting information for reporting to
external parties, including investors and creditors.
FINANCIAL ACCOUNTING
13. Job order costing and process costing are the two
traditional basic approaches to product cost accounting
systems. TRUE
14. Cost accounting can't relate to motivation and
behavior because it is used in planning and performance
evaluation. FALSE-CAN
15. What are the two basic product costing system?
JOB ORDER AND STANDARD COSTING
CHAPTER1
1. In a service organizations cost are charged to
responsibility centers for performance evaluation. TRUE
2. Components of manufacturing or product costs.
DIRECT MATERIALS, DIRECT LABOR, FACTORY OVERHEAD
3. Classification of costs RELATION TO PRODUCT, AS TO
VARIABILITY, RELATION TO MANUFACTURING
DEPARTMENT, NATURE, ACCOUNTING PERIOD,
PLANNING CONTROL AND ANALYTICAL PROCESSES
4. Fixed cost may be classified into two categories
depending on the ability of management to influence its
level. COMMITTED FIXED COST AND MANAGED FIXED
COST
5. Total variable costs = Variable cost per unit x total
output. TRUE
6. Methods of separating mixed costs into fixed and
variable. SCATTER GRAPH, HIGH-LOW POINT AND
METHOD OF LEAST SQUARE
7. A merchandising organization starts with a finished
product and markets it. TRUE
8. Joint cost and common costs are cost classified to
their nature as common or joint. TRUE
9. Other term for non-manufacturing cost is product
cost. FALSE-PERIOD COSTS
10. In a manufacturing organization accounting system
focus on work in process, which reflects the costs
involved in transforming input materials into finished
goods. TRUE
11. It is the cash or cash equivalent value sacrificed for
goods and services that are expected to bring a current
12. Costs classified as to variability. VARIABLE, FIXED
AND MIXED COST
13. Direct and indirect departmental charges are cost
classified as to relation to manufacturing departments.
TRUE
14. Other term for manufacturing costs is product costs.
TRUE
15. These are expired cost that are deducted from
revenues in the income statement to determine the
period's profit. EXPENSES
16. Cost for planning, control and analytical processes.
STANDARD, OPPORTUNITY, DIFFERENTIAL, RELEVANT,
OUT OF POCKET, SUNK, CONTROLLABLE COST
17. Components Non-manufacturing costs or period
costs. SELLING EXPENSE or MARKETING & GENERAL or
ADMINISTRATIVE EXPENSE
18. Cost classified as to accounting period are capital and
revenue expenditures
. TRUE
CHAPTER2
1. Underapplied factory overhead is unfavorable because it 1. Balance of the Materials account = to materials inventory
increases the cost of goods sold thereby increases the gross end of the period = to total of the balances of all materials
profit. FALSE stock cards. TRUE
2. Manufacturing entities has three inventory accounts. TRUE 2. Product costs are historical figures and therefore are of
3. Laborers working directly on the product earned salaries
the little use to the manager. FALSE
and administrative expenses. FALSE
4. Show or draw the cost flow of merchandising firm. 3. Debit-Factory overhead and credit-Materials to record the
FG>COGS, SELLING AND ADMINISTRATIVE>OPERATING EXP. issuance of indirect materials. TRUE
5.What replaces Merchandise inventory, end in computing 4. When raw materials are purchased, the work in process
Cost of goods sold in a manufacturing concern? FINISHED inventory account is debited. FALSE
GOODS INVENTORY 5. Factory overhead control is used to accumulate actual
6. Elements of manufacturing cost. DIRECT MATERIAL, DIRECT overhead incurred while factory overhead applied is used to
LABOR AND FACTORY OVERHEAD accumulate estimated factory overhead applied to
7. Work in process inventory has counterpart in merchandise production. TRUE
accounting. FALSE
6. The entry to record the issuance of indirect materials is
8. Show the cost flow of manufacturing firms. DIRECT MAT,
Work in process xxx FALSE-DIRECT MATERIAL
DIRECT LABOR, FACTORY OVERHEAD>WIP>FG
INV.>COGS>SELLING AND ADMINIST.> OPERATING EXP. Materials xxx
9. In a manufacturing company the entry to purchase 7. Job order cost keeps the costs of various jobs or contracts
materials on account FALSE-ACCOUNTS PAYABLE separate during their manufacture or constructions. TRUE
is as follows: 8. The credit side of Materials or materials control account
Materials. xxx may be summarized as follows: INV. BEG, PURCHASE OF
Cash xxx MAT, FREIGHT IN AND COST OF EXCESS MAT. RETURNED
10. Show or draw the cost flow of a service firm. DIRECT FROM FACTORY
MAT, DIRECT LABOR, FACTORY OVERHEAD>COST OF 9. Source documents for job order costing. JOB ORDER
SERVICE>SELLING AND ADMINIT.> OPERATING EXP.
SHEET, MATERIALS STOCKCARD, FG AND STOCKCARD,
11. Salaries and wages of factory supervisors who do not
FACTORY CONTROL COST RECORD
work directly on the product are charged to Factory overhead
control. TRUE 10. The entry to record the payroll and the set up of liability
12. In a manufacturing concern what replaces Purchases is: TRUE
(merchandise) in computing the total goods available for Payroll xxx
sale? COST OF GOODS MANUFACTURED Withholding tax payable xxx
13. Cost of goods sold in a merchandising concern is SSS Premium payable xxx
computed as: TRUE Philhealth contribution payable xxx
Beginning merchandise inventory Accrued factory payroll xxx
Add: Purchases(merchandise) 11. Payroll period can be weekly, semi-monthly or monthly.
Merchandise available for sale
TRUE
Less: Merchandise inventory end
Cost of goods sold
12. The debit side of Materials or materials control account
14. The journal entry to set up and pay payroll without may be summarized as follows: INV. BEG, PURCHASE OF
considering deductions is: TRUE MAT, FREIGHT IN AND COST OF EXCESS MAT. RETURNED
Payroll xxx FROM FACTORY
Accrued payroll xxx 13. In most factories, clock cards/time records are used to
Accrued payroll xxx record the days or hours worked by each employee. These
Cash xxx clock cards/time records are used as the basis in computing
15. What are the three inventory accounts of Manufacturing the gross earnings of employees who are paid hourly wages.
entities? MATERIALS, WIP, FINISHED GOODS INVENTORY It’s also the basis in determining the amount to be charged
16. or a manufacturing concern the journal entry to record
to direct labor cost and indirect labor cost. TRUE
the direct and indirect materials issued in a factory is as
follows: TRUE 14. A summary sheet where the cost of each order produced
Work in process xxx for a given customer or the cost of each lot to be placed in
Factory overhead xxx stock is recorded. JOB ORDER COST SHEET
Materials xxx 15. Accrued factory payroll is credited to record the
17. Product cost are comprises of Direct materials, direct payment of payroll. FALSE
labor and overhead cost.
TRUE

CHAPTER3 CHAPTER4
CHAPTER5

Backflush costing is a cost accounting method that involves delaying the recording of production costs until a specific
event occurs, rather than allocating costs to each production step as they occur, primarily associated with just-in-
time (JIT) manufacturing and lean production systems, to simplify and streamline the process. In addition,
Backflushing is a cost accounting technique that consolidates multiple general ledger accounts into a single one,
simplifying the process by reducing tracking and reporting requirements, and allowing for more efficient work in
progress cost tracking.

Just-in-Time (JIT) is a production and inventory management philosophy that started in Japan and has since spread
throughout the world in manufacturing and supply chain management. JIT is a system that tries to eliminate waste,
lower inventory costs, and increase efficiency by manufacturing only what is necessary, when it is required, and in
the exact quantity required.

The difference between JIT and traditional costing is the emphasis on cost factors and the timing of cost recording.
To align with just-in-time production principles, JIT costing illustrates simplicity, real-time cost tracking, and a
narrower set of cost accounts, whereas traditional costing uses a broader set of accounts and frequently relies on
predetermined allocation rates, which can result in differences between actual and allocated costs.

1. Learn to reply on a few suppliers

2. Improve its product flow line

3. Setup time between production runs/Create a flexible manufacturing system (FMS)

4. Develop a system of total quality control (TQC)

5. Develop a flexible work force

The five elements collectively create a streamlined, efficient production system that minimizes waste, maximizes
resource utilization, and is highly responsive to customer demand.