For inventoriable costs to become expenses under the matching principle

TRUE-FALSE STATEMENTS

#15 … TRUE-FALSE STATEMENTS

1. Direct materials costs and indirect materials costs are manufacturing overhead.
2. All manufacturing costs that cannot be classified as direct materials or direct labor are classified as manufacturing overhead.
3. The total cost of a finished product generally contains equal amounts of materials, labor, and overhead costs.
4. Both direct labor cost and indirect labor cost are product costs.
5. Period costs include selling and administrative expenses.
6. Period costs are not inventoriable costs.
7. Product costs are also called inventoriable costs.
8. Direct materials become a cost of the finished goods manufactured when they are acquired, not when they are used.
9. The sum of the direct materials costs, direct labor costs, and beginning work in process is the total manufacturing costs for the year.
10. The work of factory employees that can be physically and directly associated with converting raw materials into finished goods is
a. manufacturing overhead.
b. indirect materials.
c. indirect labor.
d. direct labor.
11. Which one of the following would not be classified as manufacturing overhead?
a. Indirect labor
b. Direct materials
c. Insurance on factory building
d. Indirect materials
12. Which one of the following is not a direct material?
a. A tire used for a lawn mower
b. Plastic used in the covered case for a home PC
c. Steel used in the manufacturing of steel-radial tires
d. Lubricant for a ball-bearing joint for a large crane
13. Which one of the following is not a cost element in manufacturing a product?
a. Manufacturing overhead
b. Direct materials
c. Office salaries
d. Direct labor
14. A manufacturing process requires small amounts of glue. The glue used in the production process is classified as a(n)
a. period cost.
b. indirect material.
c. direct material.
d. miscellaneous expense.
15. Which of the following is not a manufacturing cost category?
a. Cost of goods sold
b. Direct materials
c. Direct labor
d. Manufacturing overhead
16. For the work of factory employees to be considered as direct labor, the work must be conveniently and
a. materially associated with raw materials conversion.
b. periodically associated with raw materials conversion.
c. physically associated with raw materials conversion.
d. promptly associated with raw materials conversion.
17. Which of the following is not classified as direct labor?
a. Bottlers of beer in a brewery
b. Copy machine operators at a copy shop
c. Wages of supervisors
d. Bakers in a bakery
18. Which of the following are period costs?
a. Raw materials
b. Direct materials and direct labor
c. Direct labor and manufacturing overhead
d. Selling expenses
19. Product costs consist of
a. direct materials and direct labor only.
b. direct materials, direct labor, and manufacturing overhead.
c. selling and administrative expenses.
d. period costs.
20. For inventoriable costs to become expenses under the matching principle,
a. the product must be finished and in stock.
b. the product must be expensed based on its percentage-of-completion.
c. the product to which they attach must be sold.
d. all accounts payable must be settled.
21. What is “balanced” in the balanced scorecard approach?
a. The number of products produced
b. The emphasis on financial and non-financial performance measurements
c. The amount of costs allocated to products
d. The number of defects found on each product
22. Many companies now focus on reducing defects in finished products with the goal of zero defects. This is called
a. Activity-based costing.
b. Balanced scorecard.
c. Value chain.
d. Total quality management.
23. Which one of the following is not considered as material costs?
a. Partially completed motor engines for a motorcycle plant
b. Bolts used in manufacturing the compressor of an engine
c. Rivets for the wings of a new commercial jet aircraft
d. Lumber used to build tables
24. Samson Company reported total manufacturing costs of $300,000, manufacturing overhead totaling $52,000, and direct materials totaling $64,000. How much is direct labor cost?
a. Cannot be determined from the information provided.
b. $416,000
c. $416,000
d. $184,000
#16 … TRUE-FALSE STATEMENTS
25. When raw materials are received, there is no effort at this point to associate the cost of materials with specific jobs.
26. When raw materials are purchased, the Work in Process Inventory account is debited.
27. Direct materials requisitioned from the storeroom should be charged to the Work In Process Inventory account and the job cost sheets for the individual jobs on which the materials were used.
28. Actual manufacturing overhead costs are assigned to each job by tracing each overhead cost to a specific job.
29. The formula for the predetermined overhead rate is estimated annual overhead costs divided by an expected annual operating activity.
30. Finished Goods Inventory is charged for the cost of jobs completed during a period.
31. Overapplied o