22) Work-in-process inventory would normally include ________.
A) direct materials in stock and awaiting use in the manufacturing process B) goods partially worked on but not yet fully completed C) goods fully completed but not yet sold
D) goods returned after being sold to be re-worked on further improvements and quality Answer: B
Diff: 1
Objective: 5
AACSB: Analytical thinking
23) Finished goods inventory would normally include ________.
A) direct materials in stock and awaiting use in the manufacturing process B) goods partially worked on but not yet fully completed C) goods fully completed but not yet sold
D) goods returned after being sold to be re-worked on further improvements and quality Answer: C
Diff: 1
Objective: 5
AACSB: Analytical thinking
24) Which of the following is a period cost? A) sales promotion expenses B) direct material cost C) direct labor cost
D) indirect manufacturing costs like plant insurance Answer: A
Diff: 1
Objective: 5
AACSB: Analytical thinking
25) ________ are the acquisition costs of all materials that eventually become part of the cost object and can be traced to the cost object.
A) Sales taxes paid to acquire materials B) Wages paid to assembly-line workers C) Plant depreciation incurred D) Property taxes on plant Answer: A
Diff: 1
Objective: 5
AACSB: Analytical thinking
26) Which of the following is a direct manufacturing cost? A) plant maintenance B) plant rent
C) fringe benefits paid to machine operators D) property taxes on plant Answer: C
Diff: 1
Objective: 5
AACSB: Analytical thinking
31
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27) ________ are all manufacturing costs that are related to the cost object but cannot be traced to that cost object.
A) Indirect manufacturing costs B) Marketing costs incurred
C) Variable manufacturing costs
D) Custom duties paid for the materials Answer: A
Diff: 1
Objective: 5
AACSB: Analytical thinking
28) The income statement of a manufacturing firm reports ________. A) sales promotion costs only B) inventoriable costs only C) cost of goods sold
D) only manufacturing overhead costs Answer: C
Diff: 1
Objective: 5
AACSB: Analytical thinking
29) The income statement of a service-sector firm reports ________. A) period costs only
B) inventoriable costs only
C) both period and inventoriable costs D) direct labor costs Answer: A
Diff: 1
Objective: 5
AACSB: Analytical thinking
30) Which of the following is an inventoriable cost? A) manufacturing overhead cost B) customer service costs C) distribution costs D) marketing costs Answer: A
Diff: 1
Objective: 5
AACSB: Analytical thinking
32
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31) Inventoriable costs ________.
A) include administrative and marketing costs
B) are expensed in the accounting period in which the products are sold
C) are expensed in the accounting period in which the products are manufactured D) are also referred to as nonmanufacturing costs Answer: B
Diff: 1
Objective: 5
AACSB: Analytical thinking
32) Inventoriable costs are expensed on the income statement ________. A) when direct materials for the product are purchased B) after the products are manufactured C) when the products are sold
D) when the goods move from work-in process to finished goods account Answer: C
Diff: 1
Objective: 5
AACSB: Analytical thinking
33) Costs that are initially recorded as assets and expensed when goods sold are called ________. A) period costs
B) inventoriable costs C) irrelevant costs
D) research and development costs Answer: B
Diff: 1
Objective: 5
AACSB: Analytical thinking
34) For merchandising companies, inventoriable costs include ________. A) sales costs
B) incoming freight costs C) distribution costs D) outgoing freight costs Answer: B
Diff: 1
Objective: 5
AACSB: Analytical thinking
35) For manufacturing firms, inventoriable costs include ________. A) plant supervisor salaries
B) research and development costs
C) costs of dealing with customers after the sale D) distribution costs Answer: A
Diff: 1
Objective: 5
AACSB: Analytical thinking
33
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36) A plant manufactures several different products. The wages of the plant supervisor can be classified as a(n) ________. A) direct cost
B) inventoriable cost C) variable cost D) period cost Answer: B
Diff: 1
Objective: 5
AACSB: Analytical thinking
37) R&D costs are treated as period costs because ________. A) these costs may increase revenues in the current period B) these costs may increase revenues in the future period C) these costs may decrease revenues in the current period D) these costs are expensed when the goods are sold Answer: B
Diff: 1
Objective: 5
AACSB: Analytical thinking
38) For an automobile manufacturer, period costs include the cost of ________. A) the dashboard
B) labor used for assembly C) advertising
D) assembly-line equipment Answer: C
Diff: 1
Objective: 5
AACSB: Application of knowledge
39) Period costs ________. A) include only fixed costs
B) seldom influence financial success or failure
C) include the cost of selling, delivering, and after-sales support for customers D) should be treated as an indirect cost rather than as a direct manufacturing cost Answer: C
Diff: 1
Objective: 5
AACSB: Application of knowledge
40) Period costs ________.
A) are treated as expenses in the period they are incurred B) are directly traceable to products
C) are treated as expenses in the following period they are incurred D) are also referred to as manufacturing overhead costs Answer: A
Diff: 1
Objective: 5
AACSB: Analytical thinking
34
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41) Inventoriable costs are costs of a product that are ________.
A) costs of a product that are considered assets in a company's balance sheet when the costs are incurred and that are expensed as cost of goods sold only when the product is sold
B) considered liabilities in a company's balance sheet when the costs are incurred and that are expensed only when the product is sold
C) considered as assets in a company's income statement when the costs are capitalized and that are expensed as cost of goods sold only when the product is sold
D) considered as liabilities in a company's income statement when the costs are capitalized and that are expensed only when the product is sold Answer: A
Diff: 3
Objective: 5
AACSB: Analytical thinking
42) Costs expensed on the income statement in the accounting period incurred are called ________. A) direct costs B) indirect costs C) period costs
D) inventoriable costs Answer: C
Diff: 1
Objective: 5
AACSB: Analytical thinking
43) In the cost classification system used by manufacturing firms, assembly workers' wages would be included in ________. A) irrelevant cost
B) direct manufacturing costs C) indirect manufacturing costs D) period cost Answer: B
Diff: 1
Objective: 5
AACSB: Analytical thinking
44) Total manufacturing costs is comprised of ________. A) direct materials costs and period costs
B) direct materials costs, direct manufacturing labor costs, and manufacturing overhead costs C) indirect materials costs, indirect manufacturing labor costs, and manufacturing overhead costs D) prime costs and period costs Answer: B
Diff: 1
Objective: 5
AACSB: Analytical thinking
35
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