1.

Nonmanufacturing costs such as selling and administrative expenses are:

a.used to determine net operating income for a period.

b.reported on the income statement as part of cost of goods sold.

c.part of gross margin calculations.

d.reported on the balance sheet as current assets.

2. Wisteria Corp. has an overhead rate of $8 per machine hour. In the month of March, the company used 10,000 hours of machine time. The actual overhead cost for the month is $102,000. If Wisteria follows normal costing, determine the overhead applied to the month's production.

a.$22,000

b.$102,000

c.$182,000

d.$80,000

3. Theta Inc. uses normal costing and applies overhead based on direct material costs. The predetermined overhead rate for the current year is 200% of direct material costs. During the year, $3,500,000 of direct material costs and $4,100,000 of direct labor costs were incurred. Theta's applied overhead is:

a.$2,050,000.

b.$7,600,000.

c.$7,000,000.

d.$1,750,000.