chapter 1& 2 part ii

Question 1

Which of the following costs would be considered a period rather than a product cost in a manufacturing company?

A. Manufacturing equipment depreciation.
B. Property taxes on corporate headquarters
C. Direct materials costs
D. Electrical costs to light the production facility

Answer 1

B. Property taxes on corporate headquarters

Question 2

What is the materials inventory?

A. cost of materials purchased but not yet used

B. Cost of units started but not yet completed.

C. Cost of units completed but not yet sold.

Answer 2

A. cost of materials purchased but not yet used

Question 3

What is the work in process inventory?

A. cost of units completed but not yet sold.

B. Cost of units started but not yet completed.

C. Cost of materials purchased but not yet used.

Answer 3

B. Cost of units started but not yet completed.

Question 4

What is the finished goods inventory?

A. cost of units completed but not yet sold.

B. Cost of units started but not yet completed.

C. Cost of materials purchased but not yet used.

Answer 4

A. Cost of materials purchased but not yet used.

Question 5

The schedule of cost of good manufactured is an analysis of which account?

A) Cost of goods sold
B) Direct materials
C) Work in process
D) Finished Goods

Answer 5

D) Finished Goods

Question 6

Blue Sheep Swimming Hole has the following costs:
Direct materials: $3,507,000
Direct labor: $1,200,000
Variable overhead: $700,000
Fixed overhead: $250,000
Selling expenses: $890,000
General expenses: $400,500
Administrative expenses: $500,000

What are the company’s total manufacturing costs?
 A) $2,150,000
 B) $4,457,000
 C) $5,407,000
 D) $5,657,000

Answer 6

D) $5,657,000

Question 7

Below, there will be a cost incurred by an ACB Electrical Appliance Manufacturing. Correctly match the classification
type with the cost provided. President’s salary

A) Administrative
B) Direct Labor
C) Selling
D) Manufacturing Overhead

Answer 7

A) Administrative

Question 8

In the production of tires, rubber is most likely:
A) A direct cost and a variable cost.
B) A flexible cost and an indirect cost.
C) A period cost and a fixed cost.
D)An opportunity cost and a variable cost

Answer 8

A) A direct cost and a variable cost.

Question 9

Identify the formula to calculate Direct Materials Used:

A) Direct Materials + Direct Labor + Overhead applied

B) Total Manufacturing Cost (Direct Materials + Direct Labor + Overhead applied) + Beginning Work In Process Inventory –
Ending Work in Process Inventory

C) Beginning Finished Goods Inventory + Cost of Goods Manufactured – Ending Finished Goods Inventory

D) Beginning Raw Materials Inventory + Raw Material Purchases – Ending Raw Materials Inventory – Indirect Materials Used

Answer 9

D) Beginning Raw Materials Inventory + Raw Material Purchases – Ending Raw Materials Inventory – Indirect Materials Used

Question 10

Which of the following is an example of a period cost in a company that makes clothing?

A) Fabric used to produce men’s pants.
B) Advertising cost for a new line of clothing.
C) Factory supervisor’s salary.
D) Monthly depreciation on production equipment.

Answer 10

B) Advertising cost for a new line of clothing.