MULTIPLE CHOICE QUESTIONS

1-A fixed cost

A) Remains the same per unit as output increases and/or decreases

B) Increases in total as output increases and/or decreases

C) Remains constant in total no matter the level of output

D) Increases in total as output increases and decreases on total as output decreases

2- Product Costs include

A) Advertising

B) Depreciation on selling office equipment

C) Overhead

D) Marketing and administration salaries

3-Which of the following would be an example of an overhead cost?

A) Screws used to manufacture lighting fixtures

B) Wages of employees building the inventory item

C) Treasurer's salary

D) Engine on an airplane

4- Which of the following is an example of direct labor?

A) Staff accountant

B) Assembly line worker for televisions

C) Supervisor at a manufacturing plant

D) Vice president of marketing

5-Which of the following would be included in overhead?

A) Administrative utility costs

B) Deprecation on administrative computers

C) Marketing costs

D) Property taxes on the factory

6-Cost of raw materials used is

A)

Total product costs incurred during the current period + beginning work in process ending work in process

B)

Direct materials purchased

C)

Beginning raw material inventory + raw material purchases - ending raw material inventory

D) None of these are correct

7-In July, Econo Company purchased materials costing $21,000 and incurred direct labor cost of $18,000. Overhead totaled $32,000 for the month. Information on inventories was as follows:

	July 1	July 31
Materials	$6,200	$6,700
Work in process	$ 700	$1,200
Finished goods	$3,300	$2,700

What was the cost of direct materials used in July?

A) $21,900

B)

$20,500

C)

$21,500

8-

Assume that raw materials used in the prior question is $22,000. Econo Company also incurred direct labor cost of $18,000 and Overhead totaled $32,000 for the month. Information on inventories was as follows:

	July 1	July 31
Work in process	$ 700	$1,200
Finished goods	$3,300	$2,700

What were the total manufacturing costs in July?

$50,000

$72,000

$70,100

$71,500

9-

Assumed that total manufacturing costs in the previous question was $71,000. Information on inventories was as follows:

	July 1	July 31
Work in process	$ 700	$1,200
Finished goods	$3,300	$2,700

What was the cost of goods manufactured for July?

$71,000

$70,500

$71,500

$71,600

10-

Assume that cost of goods manufactured in the previous question was $70,000. Information on inventories was as follows:

	July 1	July 31
Work in process	$ 700	$1,200
Finished goods	$3,300	$2,700

What was the cost of goods sold for July?

		$69,400
		$70,200
		$70,600
		$69,500