Multiple Choice Questions
1. Bobby Dee’s is an owner-operated company that details (thoroughly cleans—inside and out) automobiles. Bobby Dee’s is which of the following?
a. Wholesaler
b. Retailer
c. Service firm
d. Manufacturing firm
e. None of these
2. Kellogg’s makes a variety of breakfast cereals. Kellogg’s is which of the following?
a. Wholesaler
b. Retailer
c. Service firm
d. Manufacturing firm
e. None of these
3. Target is which of the following?
a. Wholesaler
b. Retailer
c. Service firm
d. Manufacturing firm
e. None of these
4. 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. Wholesaler
b. Retailer
c. Service firm
d. Manufacturing firm
e. None of these
5. 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.
6. Which of the following is a period expense?
a. Factory insurance
b. CEO salary
c. Direct labor
d. Factory maintenance
e. All of these
7. Refer to the information for Barnard Company above. The total period expense is 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.
a. $276,000.
b. $200,000.
c. $76,000.
d. $40,000.
e. $36,000.
8. Refer to the information for Barnard Company on the shown below. Operating income is 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.
a. $34,000.
b. $110,000.
c. $234,000.
d. $270,000.
e. $74,000.