Multiple Choices $(2$ points each$)$

Manufacturing overhead includes:

a$.$ all direct material, direct labor and administrative costs.

b$.$ all manufacturing costs except direct labor.

c$.$ all manufacturing costs except direct labor and direct materials.

d$.$ all selling and administrative costs.

The salary paid to the president of a company would be classified on the income statement as

$a(n)$ :

$($a$)$ administrative expense.

b$.$ direct labor cost.

c$.$ manufacturing overhead cost.

d$.$ selling expense.

Which of the following is NOT a period cost?

a$.$ Depreciation of factory maintenance equipment.

b$.$ Salary of a clerk who handles customer billing.

c$.$ Insurance on a company showroom where customers can view new products.

d$.$ Cost of a seminar concerning tax law updates that was attended by the company's

controller.

Materials used in a factory that are NOT an integral part of the final product, such as cleaning

supplies, should be classified as:

a$.$ direct materials.

b$.$ a period cost.

c$.$ administrative expense.

d$.$ manufacturing overhead.

Which of the following statements is true regarding job$-$order costing?

a$.$ It is used in situations where many different products, each with unique features, are

produced each period.

b$.$ It is used for manufacturing companies, but not service companies.

c$.$ It relies on a predetermined overhead rate to apply direct material cost to units of product.

d$.$ It relies on a predetermined overhead rate to apply direct labor cost to units of product.

Which of the following costs is classified as both a prime cost and a conversion cost?

a$.$ Direct materials.

b$.$ Direct labor.

c$.$ Variable overhead.

d$.$ Fixed overhead.