Standard Cost Variances & Journal Entries

A cost accounting system will assist a manager in determining how many and which products to produce. What is the purpose of such system in the context of business operations?

• To analyze customer feedback and make decisions based on popularity.
• To determine the color of each product and make decisions based on aesthetics.
• To calculate the number of employees needed for production and make decisions based on staffing.
• To track competitors' prices and make decisions based on market trends.
• To determine the cost of producing each product and make decisions on which products to produce based on profitability.

The information from a cost accounting system allows managers to make decisions about planning and directing, but not about controlling.

• False
• Not applicable
• Sometimes true
• Partially true
• True

Cost accounting systems are primarily concerned with accumulating product cost information.

• Not relevant
• Partially true
• Only for services
• False
• True

________ measure, record, and report product costs.

The two main types of cost accounting systems are ________.

One of the major purposes of a cost accounting system for a manufacturer is to compute the ________ for the ________.

Cost accounting systems are used ________.

What type of costing do accounting firms, building contractors, and healthcare providers typically use.

• Throughput costing
• Job costing
• Activity-based costing
• Process costing
• Variable costing

A _______ system is used by companies that manufacture batches of unique products or provide specialized services.

A job order costing system accumulates the costs of each process needed to complete the product over a period of time instead of assigning costs to specific jobs.

• Job order costing is not a common practice
• False
• Partially true
• Costs are assigned randomly
• True