102)
For product costs associated with a particular product to be reported on the income statement:
A)
The product must be sold.
B)
The company must expect to sell the product during the next twelve months.
C)
The product must be transferred to Finished Goods Inventory.
D)
The product may be in any of the manufacturer’s inventory accounts.
E)
The product must still be in Work in Process Inventory.
103)
Costs that are capitalized as inventory when they are incurred are called:
A)
Fixed costs.
B)
General costs.
C)
Administrative costs.
D)
Period costs.
E)
Product costs.
104)
Costs that flow directly to the income statement as expenses are called:
A)
Period costs.
B)
Capitalized costs.
C)
General costs.
D)
Balance sheet costs.
E)
Product costs.
105)
Marshall Corporation incurred costs for materials and labor needed to manufacture its products.
These costs are an example of:
A)
Period costs.
B)
Capitalized costs.
C)
Balance sheet costs.
D)
Product costs.
E)
General costs.
106)
Product costs:
A)
Are moved to the income statement for any unsold inventory at the end of the year.
B)
Include selling and administrative expenses.
C)
Are expenditures identified more with a time period rather than with units of product.
D)
Are expensed on the income statement when incurred.
E)
Are expenditures necessary and integral to finished products.
107)
Products that have been completed and are ready to be sold by the manufacturer are called:
A)
Cost of goods sold.
B)
Finished goods inventory.
C)
Work in process inventory.
D)
Factory supplies.
E)
Raw materials inventory.
108)
Goods a company acquires to use in making products are called:
A)
Finished goods inventory.
B)
Work in process inventory.
C)
Conversion costs.
D)
Cost of goods sold.
E)
Raw materials inventory.
109)
Products that are in the process of being manufactured but are not yet complete are called:
A)
Cost of goods sold.
B)
Conversion costs.
C)
Work in process inventory.
D)
Raw materials inventory.
E)
Finished goods inventory.
110)
Which of the following represents the correct formula for calculating raw materials inventory
turnover for a manufacturer?
A)
Raw materials used/Average raw materials inventory.
B)
Ending raw materials/Raw materials used * 365.
C)
Raw materials used/Beginning raw materials inventory * 365.
D)
Average raw materials inventory/Raw materials used.
E)
Raw materials purchased/Average raw materials inventory.
111)
Which of the following represents the correct formula for calculating days’ sales in raw materials
inventory for a manufacturer?
A)
Raw materials used/Beginning raw materials inventory × 365.
B)
Raw materials used/Average raw materials inventory.
C)
Raw materials purchased/Average raw materials inventory.
D)
Average raw materials inventory/Raw materials used.
E)
Ending raw materials inventory/Raw materials used × 365.
112)
Which of the following statements is correct concerning the Days’ sales in raw materials inventory?
A)
Most companies generally prefer a higher number of days’ sales in raw materials inventory.
B)
A measure of how long it takes raw materials to be used in production.
C)
Reveals how many times a company turns over its raw materials inventory in a period.
D)
The ratio is not useful for a manufacturer.
E)
Is calculated by taking the Raw materials used/Average raw materials inventory.
113)
The cost of workers who assist in, or supervise, the manufacturing process, not linked to specific
units of product is called:
A)
Indirect labor.
B)
Direct labor.
C)
Basic labor.
D)
Unspecified labor.
E)
Joint labor.
114)
Factory overhead costs may include all of the following except:
A)
Selling costs.
B)
Assembly supplies.
C)
Indirect labor costs.
D)
Factory rent.
E)
Indirect material costs.
115)
Labor costs that are clearly associated with specific units of product because the labor is used to
convert raw materials into finished products are called:
A)
Finished labor.
B)
All labor.
C)
Direct labor.
D)
Contracted labor.
E)
Indirect labor.
116)
Manufacturing costs other than direct materials and direct labor, and are not readily traceable to
specific units or batches of production are called:
A)
Factory overhead.
B)
Prime costs.
C)
Administrative expenses.
D)
Nonmanufacturing costs.
E)
Preproduction costs.
117)
Materials that are used in manufacturing but are not clearly identified with specific product units
are called:
A)
Indirect materials.
B)
Secondary materials.
C)
General materials.
D)
Materials inventory.
E)
Direct materials.
118)
The salary paid to the assembly line supervisor would normally be classified as:
A)
A period cost.
B)
Indirect labor.
C)
An assembly cost.
D)
Direct labor.
E)
A general cost.
119)
Which of the following items appears only in a manufacturing company’s financial statements?
A)
Goods available for sale.
B)
Cost of goods manufactured.
C)
Net income.
D)
Gross profit.
E)
Cost of goods sold.
120)
Which of the following costs is not included in factory overhead?
A)
Manufacturing supplies used.
B)
Indirect labor.
C)
Depreciation of manufacturing equipment.
D)
Direct materials.
E)
Payroll taxes on the wages of factory supervisors.
121)
Which of the following should not be included in direct materials costs?
A)
Materials handling costs.
B)
Materials storage costs.
C)
Incoming freight charges.
D)
Invoice costs of direct materials.
E)
Delivery charges on shipments to customers.
122)
Raw materials that are tangible components of the finished product and can be separately and
readily traced through the manufacturing process are called:
A)
Direct materials.
B)
Chargeable materials.
C)
Work in process.
D)
Raw materials sold.
E)
Indirect materials.
123)
The three major cost components of manufacturing a product are:
A)
Marketing, selling, and administrative costs.
B)
General, selling, and administrative costs.
C)
Direct materials, direct labor, and factory overhead.
D)
Product costs, period costs, and variable costs.
E)
Indirect labor, indirect materials, and fixed expenses.
124)
Which of the following costs would not be classified as factory overhead?
A)
Insurance on factory building.
B)
Small tools used in production.
C)
Property taxes on maintenance machinery.
D)
Rubber for the soles of shoes produced.
E)
Wages of the factory janitor.
125)
A manufacturer‘s total cost of making and finishing products in the period is called:
A)
Cost of goods sold.
B)
Ending work in process inventory.
C)
Cost of goods manufactured.
D)
Ending finished goods inventory.
E)
Total manufacturing costs.
126)
A manufacturing firm’s cost of goods manufactured is equivalent to a merchandising firm’s:
A)
Cost of goods sold.
B)
Beginning merchandise inventory.
C)
Cost of goods purchased.
D)
Ending merchandise inventory.
E)
Cost of goods available.
127)
Which one of the following items is normally not a manufacturing cost?
A)
Direct labor.
B)
Factory overhead.
C)
General and administrative expenses.
D)
Direct materials.
E)
Conversion cost.
128)
Which of the following is not part of the materials activity in the flow of manufacturing activities?
A)
Beginning work in process.
B)
Ending raw materials.
C)
Raw materials available for use.
D)
Beginning raw materials.
E)
Raw materials purchases.
129)
Which of the following is not part of the production activity in the flow of manufacturing
activities?
A)
Beginning Work in Process Inventory.
B)
Total finished goods available for sale.
C)
Cost of goods manufactured.
D)
Factory overhead.
E)
Direct labor.
130)
Which of the following is not part of the sales activity in the flow of manufacturing activities?
A)
Ending Work in Process Inventory.
B)
Cost of Goods Sold.
C)
Beginning Finished Goods Inventory.
D)
Total Finished Goods available for sale.
E)
Cost of Goods Manufactured.
131)
A manufacturing company has a beginning finished goods inventory of $14,600, raw material
purchases of $18,000, cost of goods manufactured of $32,500, and an ending finished goods
inventory of $17,800. The cost of goods sold for this company is:
A) $47,100. B) $27,600. C) $21,200. D) $29,300. E) $32,500.
132)
A manufacturing company has a beginning finished goods inventory of $28,300, cost of goods
manufactured of $58,500, and an ending finished goods inventory of $27,600. The cost of goods
sold for this company is:
A) $114,400. B) $86,100. C) $59,200. D) $2,600. E) $57,800.
133)
Romeo Corporation has accumulated the following accounting data for the year:
Finished goods inventory, January 1 $ 3,200
Finished goods inventory, December 31 4,000
Total cost of goods sold 14,20
0
The cost of goods manufactured for the year is:
A) $11,000. B) $21,400. C) $17,400. D) $10,200. E) $15,000.
134)
Mustang Corporation has accumulated the following accounting data for the month of April:
Finished goods inventory, January 1 ………. $3,200
Finished goods inventory, December 31 …… 4,000
Total cost of goods sold ……………………. 14,200
The cost of goods sold for the year is:
A) $59,700. B) $169,300. C) $144,700. D) $108,900. E) $120,100.
135)
A company’s prime costs total $3,000,000 and its conversion costs total $7,000,000. If direct
materials are $1,000,000 and factory overhead is $5,000,000, then direct labor is:
A) $2,000,000.
B) $4,000,000.
C) $1,000,000.
D) $3,000,000.
E) $14,000,000.