1.A worker is responsible for answering the phone in the accounting office of a custom rocking chair manufacturing company. The employees time is handled as a product cost during the current period. This would result in

overstated COGS if the inventory is sold immediately after the entry. an understated inventory balance right after the journal entry is made for the employees time. a cost accounting vortex, from which there is no escape. the realization that no error has been made.

2.A manufacturer, such as BMW, would

have 3 classes of inventory, and would utilize COGM. have 3 classes of inventory, and would not utilize COGM. have 1 class of inventory, and would utilize COGM. None of the above are true.

3.A retailer, such as Wal-Mart, would likely

Use COGM. Use COGM and COGS. Use COGS; would not use COGM. None of the above are true.

4.Which of the following companies would least likely use a job-order costing system?

Event caterer who specializes in weddings. Custom home builder. Producer and bottler of milk. Accounting firm.

5.A pre-determined overhead rate should be made based on:

Guidance from the SEC. managements best effort to forecast indirect product costs. Guidance from the FASB. None of these are true.