Exam 3: Cost Flows and Cost Terminology

Product costs are often referred to as inventoriable costs because these are the costs that firms attach to inventories of work in process and finished goods.

Which of the following items is reported on the balance sheet prior to being expensed on the income statement as a product cost? a. Inventory. B) Insurance. C) Sales commissions. D) Utility charges.

The costs of management salaries that are not a part of the costs of providing programs or services are referred to as:

In a typical production process, the physical flows for a manufacturer are: a. Work-in-Process Inventory→Material Inventory→Finished Goods Inventory→Cost of Goods Sold. B) Material Inventory→Cost of Goods Sold→Finished Goods. C) Material Inventory→Work-in-Process inventory→Finished Goods Inventory→Cost of Goods Sold. D) Finished Goods Inventory→Cost of Goods Sold→Material Inventory E) None of the above.

The Peterson Company incurred the following costs in the month of May: The company's product costs total:

The GAAP income statement combines controllable with non-controllable costs and fixed costs with variable costs.

Product costs are also known as: a. Prime costs. B) Conversion costs. C) Period costs. D) Inventoriable costs

Bass Boss Manufacturing Company manufactures two types of bass boats. Bass Boss provides the following data, pertinent to allocating its annual overhead cost of $435,000: What are the cost drivers?

As with service firms, period costs appear below the line for gross margin.

Grand Rapids Rafting Company recorded the following data for the month of October: Inventory purchases for the month of October total: a. $108,000 B) $136,000 C) $200,000 D) $44,000

Manufacturing overhead includes which of the following costs? a. Fixed costs only. B) Variable costs only. C) Conversion costs and direct labor. D) Variable overhead and fixed overhead. E) Common costs and special costs.

Bass Boss Manufacturing Company manufactures two types of bass boats. Bass Boss provides the following data, pertinent to allocating its annual overhead cost of $435,000: What is the cost pool for Bass Boss?

Bass Boss Manufacturing Company manufactures two types of bass boats. Bass Boss provides the following data, pertinent to allocating its annual overhead cost of $435,000: Determine the allocation rate for assuming the cost driver is machine hours/unit.

Which of the following is the best example of prime costs for Sharp Edge Mowers? a. Sales commissions and maintenance on the machine that tightens bolts on lawn mowers during production. B) Assembly line wages and the cost of tires to be installed on newly assembled lawnmowers. C) The general manager's salary and the janitorial expense for executives' offices. D) The interest cost on the manufacturing building and the wages paid for the quality control inspector for the assembly line

Which of the following statements relating to period costs is not correct?

Which of the following costs are added to work-in-process during the period? a. Raw materials. B) Labor. C) Administrative costs. D) Both A and B) e. A, B, and C

GAAP provides considerable flexibility regarding reporting formats.

Product costs include which of the following costs? a. Manufacturing overhead costs and selling and administrative costs. B) Variable manufacturing costs and manufacturing overhead costs. C) Common costs and special costs. D) Period costs and common costs. E) Variable costs only.

The cost of purchasing goods from suppliers does not include the cost of transportation.

Period costs contain controllable, but not non-controllable costs.