1. Stone Inc. is a company that purchases goods (e.g., chess sets, pottery) from overseas and resells them to gift shops in the United States. Stone Inc. is which of the following?

a. Retailer

b. Wholesaler

c. Manufacturing firm

d. Service firm

e. None of the above

2. JackMan Company produces diecast metal bulldozers for toy shops. JackMan estimated the following average costs per bulldozer:

Direct materials ........$8.65

Direct labor ...........1.10

Manufacturing overhead .....0.95

Prime cost per unit is

a. $8.65.

b. $1.10.

c. $0.95.

d. $2.05.

e. $9.75.

3. Which of the following is a period expense?

a. Factory insurance

b. CEO salary

c. Direct labor

d. Factory maintenance

e. All of the above

4. Last year, Barnard Company incurred the following costs:

Direct materials ........$ 50,000

Direct labor ...........20,000

Manufacturing overhead ...130,000

Selling expense .......40,000

Administrative expense ......36,000

Barnard produced and sold 10,000 units at a price of $31 each.

Prime cost per unit is

a. $7.00.

b. $20.00.

c. $15.00.

d. $5.00.

e. $27.60.

5. Refer to the Barnard Company information in Multiple-Choice Exercise 2-13. Conversion cost per unit is:

a. $7.00.

b. $20.00.

c. $15.00.

d. $5.00.

e. $27.60.

6. Refer to the Barnard Company information in Multiple-Choice Exercise 2-13. The cost of goods sold per unit is

a. $7.00.

b. $20.00.

c. $15.00.

d. $5.00.

e. $27.60.

7. Refer to the Barnard Company information in Multiple-Choice Exercise 2-13. The gross margin per unit is

a. $24.00.

b. $11.00.

c. $16.00.

d. $26.00.

e. $3.40.

8. Refer to the Barnard Company information in Multiple-Choice Exercise 2-13. The total period expense is

a. $276,000.

b. $200,000.

c. $76,000.

d. $40,000.

e. $36,000.

9. Refer to the Barnard Company information in Multiple-Choice Exercise 2-13. Operating income is

a. $34,000.

b. $110,000.

c. $234,000.

d. $270,000.

e. $74,000.