D101 Cost and Managerial Accounting - Set 3 - Part 3

Test your knowledge of technical writing concepts with these practice questions. Each question includes detailed explanations to help you understand the correct answers.

Question 41: What is the impact of overapplied overhead at the end of a period?

It increases the cost of goods sold

It reduces the cost of goods sold

It has no effect on the financial statements

It increases the work-in-process inventory

Question 42: Which of the following would be classified as direct labor?

The wages of a janitor in the factory

The wages of a factory manager

The wages of an assembly line worker

The salary of the company CEO

Question 43: In a job order costing system, what does the completion of a job trigger?

The transfer of costs from finished goods to cost of goods sold

The application of direct materials to the job

The transfer of costs from work-in-process to finished goods

The application of manufacturing overhead to the job

Question 44: What is the role of cost pools in activity-based costing?

To allocate direct labor costs

To assign overhead costs to different activities

To reduce total manufacturing costs

To calculate direct materials costs

Question 45: What is the purpose of calculating the margin of safety?

To determine the total fixed costs of a product

To assess how much sales can drop before a company incurs a loss

To measure the companys profitability

To calculate the break-even point in units

Question 46: How are period costs treated in a companys financial statements?

They are included in the cost of goods sold

They are capitalized as inventory

They are expensed in the period they are incurred

They are allocated to manufacturing overhead

Question 47: What happens when manufacturing overhead is underapplied at the end of the period?

The cost of goods sold is increased

The cost of goods sold is reduced

The work-in-process account is credited

The finished goods inventory is debited

Question 48: In activity-based costing, what is a cost driver?

The total overhead costs assigned to a product

A factor that causes changes in the cost of an activity

A measure of direct labor used in production

The total direct materials used in production

Question 49: How does job order costing differ from process costing?

Job order costing averages costs, while process costing assigns costs to jobs

Job order costing assigns costs to individual jobs, while process costing averages costs across units

Process costing is used for custom jobs, while job order costing is used for mass production

Job order costing is based on estimated costs, while process costing uses actual costs

Question 50: What is the breakeven point?

The point where total variable costs equal total fixed costs

The level of sales where total revenue equals total costs

The point where total fixed costs equal total direct labor costs

The level of sales where net income equals total revenue

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