Chapter 1 Continue 1) 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 2) 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 Answer:A 3) Costs that are initially recorded as assets and expensed when sold are called: A) period costs B) inventoriable costs C) variable costs D) fixed costs Answer:B 4) Period costs: A) are treated as expenses in the period they are incurred B) are directly traceable to products C) include direct labor D) are also referred to as manufacturing overhead costs Answer:A 5) Prime costs include: A) direct materials and direct manufacturing labor costs B) direct manufacturing labor and manufacturing overhead costs C) direct materials and manufacturing overhead costs D) only direct materials Answer:A 6) Conversion costs include: A) direct materials and direct manufacturing labor costs B) direct manufacturing labor and manufacturing overhead costs C) direct materials and manufacturing overhead costs D) only direct materials Answer:B 7) Total manufacturing costs equal: 1
A) direct materials + prime costs B) direct materials + conversion costs C) direct manufacturing labor costs + prime costs D) direct manufacturing labor costs + conversion costs Answer:B 8) Which of the following formulas determine cost of goods sold in a manufacturing entity? A) Beginning work-in-process inventory + Cost of goods manufactured - Ending work-in- process inventory = Cost of goods sold B) Beginning work-in-process inventory + Cost of goods manufactured + Ending work-in- process inventory = Cost of goods sold C) Cost of goods manufactured - Beginning finished goods inventory - Ending finished goods inventory = Cost of goods sold D) Cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory = Cost of goods sold Answer:D The following information pertains to the Cannady Corporation: Beginning work-in-process inventory$ 50,000 Ending work-in-process inventory48,000 Beginning finished goods inventory180,000 Ending finished goods inventory195,000 Cost of goods manufactured1,220,000
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