1. Which of the following is a characteristic of a service company?

a. It transforms raw materials into finished goods.

b. It makes a product.

c. It does not have tangible products intended for sale.

d. It has a single category of inventory.

2. Which of the following formulas represents cost of goods sold for a merchandising business?

a. Beginning inventory - ending inventory = cost of goods sold

b. Purchases and freight in - ending inventory = cost of goods sold

c. Ending inventory + purchases and freight in - beginning inventory = cost of goods sold

d. Beginning inventory + purchases and freight in - ending inventory = cost of goods sold

3. Manufacturing overhead includes which of the following?

a. Indirect labor and indirect materials

b. Salaries of salesmen

c. Direct materials and direct labor

d. Delivery costs to ship goods to customers

4. For a manufacturing business, which of the following would be considered an inventorial product cost?

a. Depreciation of delivery vehicles

b. Depreciation of administrative building furniture and fixtures

c. Depreciation of manufacturing equipment

d. Depreciation of the accounting department computer equipment

5. The following information was obtained from Fizz Company:

• Advertising costs: $9,900

• Indirect labor: $11,000

• CEO's salary: $49,000

• Direct Labor: $41,000

• Indirect materials: $7,900

• Direct materials: $61,000

• Factory utilities: $700

• Factory janitorial costs: $2,300

• Manufacturing equipment depreciation: $2,100

• Delivery vehicle depreciation: $1,100

• Administrative wages and salaries: $21,000

How much were Fizz's inventorial product costs?

a. $126,000

b. $104,100

c. $127,100

d. $115,000

Answer rating: 100% (QA)

1 c It does not have tangible products intended ... View the full answer