Accounting

Multiple Choice and True/False Statements (2 points each)

Please answer the following questions.

1. For a manufacturing company, which of the following is an example of a period cost rather than a product cost?

a. Depreciation on factory equipment

b. Wages of salespersons

c. Wages of machine operators

d. Insurance on factory equipment

2. A manager that is establishing objectives (strategic or operational) is performing which management function?

a. Controlling

b. Directing

c. Planning

d. Constraining

3. As product costs expire (expensed), they become part of

a. selling expenses.

b. inventory.

c. cost of goods sold.

d. sales revenue.

4. Property taxes on a manufacturing plant are an element of a

Product Cost Period Cost

a. Yes No

b. Yes Yes

c. No Yes

d. No No

5. A product requires processing in two departments, Department A and then Department B, before it is completed. Costs transferred out of Department A will be transferred to

a. Finished Goods Inventory.

b. Cost of Goods Sold.

c. Work in Process