Question 1

The cost of direct labor in a manufacturing plant is an example of: $\begin{array}{ll}
&\text { Conversion Cost } & \text { /Period Cost } \
A.&\text { No } & \text { Yes } \
B.&\text { No } & \text { No } \
C.&\text { Yes } & \text { No } \
D.&\text { Yes } & \text { Yes }
\end{array}$

Accepted Answer

The answer of The cost of direct labor in a...

Question 2

What distinguishes services firms from other firms?

Accepted Answer

A) Service firms do not incur depreciation costs. 
B) Service firms do not use capital resources to perform their functions. 
C) The products service firms offer are not tangible or storable. 
D) Human capital is an important resource for service firms, but not for other firms. 
E) None of the above. 
A) Service firms do not incur depreciation costs. 
B) Service firms do not use capital resources to perform their functions. 
C) The products service firms offer are not tangible or storable. 
D) Human capital is an important resource for service firms, but not for other firms. 
E) None of the above.

Question 3

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

Accepted Answer

A) Period costs are all costs that are not product costs. 
B) Period costs always appear below the line for gross margin. 
C) Period costs are not separated from product costs in GAAP income statements. 
D) Both A and B are incorrect. 
E) A, B, and C are incorrect. 
A) Period costs are all costs that are not product costs. 
B) Period costs always appear below the line for gross margin. 
C) Period costs are not separated from product costs in GAAP income statements. 
D) Both A and B are incorrect. 
E) A, B, and C are incorrect.

Question 4

The Peterson Company incurred the following costs in the month of May: $$\begin{array} { l l } 
\text { Direct materials purchased } & \$ 12,000 \
\text { Commissions paid to salespeople } & \$ 5,000 \
\text { Direct labor paid } & \$ 9,000 \
\text { Manufacturing plant utility costs } & \$ 19,000 \
\text { Advertising costs } & \$ 2,000
\end{array}$$ The company's product costs total:

Accepted Answer

A) $45,000 
B) $47,000 
C) $40,000 
D) $42,000 
A) $45,000 
B) $47,000 
C) $40,000 
D) $42,000

Question 5

Which of the following inventory equations produces the Cost of Goods Sold?

Accepted Answer

A) Cost of beginning inventory + cost of goods purchased during period - cost of ending inventory. 
B) Cost of ending inventory + cost of goods purchased during period - cost of beginning inventory. 
C) Cost of beginning inventory - cost of goods purchased during the period. 
D) Cost of ending inventory - cost of goods purchased during the period. 
E) Cost of ending inventory + cost of goods purchased during the period. 
A) Cost of beginning inventory + cost of goods purchased during period - cost of ending inventory. 
B) Cost of ending inventory + cost of goods purchased during period - cost of beginning inventory. 
C) Cost of beginning inventory - cost of goods purchased during the period. 
D) Cost of ending inventory - cost of goods purchased during the period. 
E) Cost of ending inventory + cost of goods purchased during the period.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

The income statement for a service firm distinguishes between which of the following costs?

Accepted Answer

A) Cost of goods manufactured and conversion costs. 
B) Costs of providing services and product costs. 
C) Cost of providing service and selling and administrative costs. 
D) Selling and administrative costs and period costs. 
E) None of the above. 
A) Cost of goods manufactured and conversion costs. 
B) Costs of providing services and product costs. 
C) Cost of providing service and selling and administrative costs. 
D) Selling and administrative costs and period costs. 
E) None of the above.

Question 8

Prime costs include:

Accepted Answer

A) Direct material, direct labor, and manufacturing overhead. 
B) Direct material and direct labor. 
C) Direct labor and manufacturing overhead. 
D) Direct material and manufacturing overhead. 
E) Variable overhead and fixed overhead. 
A) Direct material, direct labor, and manufacturing overhead. 
B) Direct material and direct labor. 
C) Direct labor and manufacturing overhead. 
D) Direct material and manufacturing overhead. 
E) Variable overhead and fixed overhead.

Question 9

Product costs always appear "below the line" for gross margin.

Accepted Answer

A) True 
 B)False

Question 10

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: $\begin{array}{lcc}
\hline \text { Bass Boss Product } & \text { Boss } & \text { Boss } \
& \text { Hog } & \text { Bear } \
\text { Units per year } & 15,000 & 20,000 \
\text { Machine hours/unit } & 3.0 & 5.0\\hline
\text { Materials cost/unit } & \$ 1,500 & \$ 2,000 \
\text { Labor cost/unit } & \$ 800 & \$ 1,000\\hline
\end{array}$ What are the cost objects?

Accepted Answer

A) Annual overhead costs. 
B) Boss Hog and Boss Bear. 
C) Units per year. 
D) Machine hours/unit. 
E) Material and Labor costs/unit. 
A) Annual overhead costs. 
B) Boss Hog and Boss Bear. 
C) Units per year. 
D) Machine hours/unit. 
E) Material and Labor costs/unit.

Question 11

Period costs are all costs that are not product costs.

Accepted Answer

A) True 
 B)False

The cost of direct labor in a manufacturing plant is an example of: Conversion Cost /Period Cost A. No Yes B. No No C. Yes No D. Yes Yes

What distinguishes services firms from other firms?

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

The Peterson Company incurred the following costs in the month of May: Direct materials purchased \ 12,000 Commissions paid to salespeople \ 5,000 Direct labor paid \ 9,000 Manufacturing plant utility costs \ 19,000 Advertising costs \ 2,000 The company's product costs total:

Which of the following inventory equations produces the Cost of Goods Sold?

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

The income statement for a service firm distinguishes between which of the following costs?

Prime costs include:

Product costs always appear "below the line" for gross margin.

Period costs are all costs that are not product costs.

Accounting: Information for Decision Making

Identifying and Estimating Costs and Benefits

Techniques for Estimating Fixed and Variable Costs

Cost-Volume-Profit Analysis

Decision Making in the Short Term

Operating Budgets: Bridging Planning and Control

Budgetary Control and Variance Analysis

Cost Allocations

Activity-Based Costing Management

Capital Budgeting

Performance Evaluation in Decentralized Organizations

Strategic Planning and Control

Job-Costing Systems

Process-Costing Systems

Refining Systems: Support Activity

Filters

Exam 3: Cost Flows and Cost Terminology

The cost of direct labor in a manufacturing plant is an example of: Conversion Cost /Period Cost A. No Yes B. No No C. Yes No D. Yes Yes

What distinguishes services firms from other firms?

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

The Peterson Company incurred the following costs in the month of May: Direct materials purchased \ 12,000 Commissions paid to salespeople \ 5,000 Direct labor paid \ 9,000 Manufacturing plant utility costs \ 19,000 Advertising costs \ 2,000 The company's product costs total:

Which of the following inventory equations produces the Cost of Goods Sold?

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

The income statement for a service firm distinguishes between which of the following costs?

Prime costs include:

Product costs always appear "below the line" for gross margin.

Period costs are all costs that are not product costs.

Accounting: Information for Decision Making

Identifying and Estimating Costs and Benefits

Techniques for Estimating Fixed and Variable Costs

Cost-Volume-Profit Analysis

Decision Making in the Short Term

Operating Budgets: Bridging Planning and Control

Budgetary Control and Variance Analysis

Cost Allocations

Activity-Based Costing Management

Capital Budgeting

Performance Evaluation in Decentralized Organizations

Strategic Planning and Control

Job-Costing Systems

Process-Costing Systems

Refining Systems: Support Activity

Filters