Chapter 2: an introduction to cost terms and purposes true/false
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| Answer: c Difficulty: 3 Objective: 6
88. For a manufacturing-sector company, the cost of factory insurance is classified as a a. direct material cost. b. direct manufacturing labor cost. c. manufacturing overhead cost. d. period cost. Answer: c Difficulty: 1 Objective: 6 89. For a printing company, the cost of paper is classified as a a. direct material cost. b. direct manufacturing labor cost. c. manufacturing overhead cost. d. period cost. Answer: a Difficulty: 1 Objective: 6 90. Wages paid to machine operators on an assembly line are classified as a a. direct material cost. b. direct manufacturing labor cost. c. manufacturing overhead cost. d. period cost. Answer: b Difficulty: 1 Objective: 6 91. Manufacturing overhead costs in an automobile manufacturing plant MOST likely include a. labor costs of the painting department. b. indirect material costs such as lubricants. c. sales commissions. d. steering wheel costs. Answer: b Difficulty: 1 Objective: 6 92. Manufacturing overhead costs are also referred to as a. indirect manufacturing costs. b. prime costs. c. period costs. d. conversion costs. Answer: a Difficulty: 1 Objective: 6 THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 93 THROUGH 97. Gilley Incorporated reported the following information: On January 31, 20x3: Job #101 was the only job in process with accumulated costs of $3,000. During February the following costs were added to production: Job #101 $10,000 Job #102 $ 8,000 Job #103 $ 7,000 On February 28, 20x3: Job #101 was completed and sold for $18,000. Job #102 was completed but not sold. Job #103 remains in production. 93. What is work-in-process inventory on February 28, 20x3? a. $7,000 b. $8,000 c. $25,000 d. $3,000 Answer: a Difficulty: 1 Objective: 6 Job #103 $7,000 94. What is finished goods inventory on February 28, 20x3? a. $7,000 b. $8,000 c. $21,000 d. $10,000 Answer: b Difficulty: 1 Objective: 6 Job #102 $8,000 95. What is cost of goods manufactured for February? a. $10,000 b. $8,000 c. $13,000 d. $21,000 Answer: d Difficulty: 3 Objective: 7 (Job #101 $13,000) + (Job #102 $8,000) 96. What is cost of goods sold for February? a. $18,000 b. $10,000 c. $13,000 d. $21,000 Answer: c Difficulty: 2 Objective: 7 Job #101 $13,000 97. What is gross margin for February? a. $5,000 b. $18,000 c. $8,000 d. $13,000 Answer: a Difficulty: 3 Objective: 7 $18,000 - $13,000 = $5,000 98. The income statement of a manufacturing firm reports a. period costs only. b. inventoriable costs only. c. both period and inventoriable costs. d. period and inventoriable costs but at different times, the reporting varies. Answer: c Difficulty: 2 Objective: 7 99. The income statement of a service-sector firm reports a. period costs only. b. inventoriable costs only. c. both period and inventoriable costs. d. period and inventoriable costs but at different times, the reporting varies. Download 180.5 Kb. Share with your friends:
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