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6. Which of the following inventories would a discount retailer such as Wal-Mart report as an asset?
A. Raw materials.
B. Work in process.
C. Finished goods.
D. Merchandise inventory.
E. All of the above.
7. Midwest Motors manufactures automobiles. Which of the following would not be classified as
direct materials by the company?
A. Sheet metal used in the automobile's body.
B. Tires.
C. Interior leather.
D. CD player.
E. Wheel lubricant.
13. Which of the following equations is used to calculate cost of goods sold during the period?
A. Beginning finished goods + cost of goods manufactured + ending finished goods.
B. Beginning finished goods - ending finished goods.
C. Beginning finished goods + cost of goods manufactured.
D. Beginning finished goods + cost of goods manufactured - ending finished goods.
E. Beginning finished goods + ending finished goods - cost of goods manufactured.
15. Fort Walton Industries began July with a finished-goods inventory of $48,000. The finished-
goods inventory at the end of July was $41,000 and the cost of goods sold during the month was
$125,000. The cost of goods manufactured during July was:
A. $77,000.
B. $84,000.
C. $118,000.
D. $132,000.
E. some other amount.
16. The accounting records of Bronco Company revealed the following information:
17. Which of the following would likely be a cost driver for the amount of direct materials used?
A. The number of units sold.
B. The number of direct labor hours worked.
C. The number of machine hours worked.
D. The number of employees working in the factory.
E. The number of units produced.
24. The variable costs per unit are $4 when a company produces 10,000 units of product. What are
the variable costs per unit when 8,000 units are produced?
A. $4.00.
B. $4.50.
C. $5.00.
D. $5.50.
E. Some other amount.
25. The fixed costs per unit are $10 when a company produces 10,000 units of product. What are the
fixed costs per unit when 12,500 units are produced?
A. $4.
B. $6.
C. $8.
D. $10.
E. Some other amount.
26. Costs that can be easily traced to a specific department are called:
A. direct costs.
B. indirect costs.
C. product costs.
D. manufacturing costs.
E. processing costs.