21. Materials must have which two qualities in order to be classified as direct materials? a. They must be introduced into the process in both work-in-process inventories and finished goods inventories. b They must be an integral part of the finished product and be a significant portion of the total product cost. They must be an integral part of the finished product, but can be an insignificant portion c. of the total product cost. d. They must be classified as both prime costs and conversion costs. 22. The cost of goods sold for Heedy manufacturing in 2011 was $233,000. The January 1, 2011, finished goods inventory balance was $31,600, and the December 31, 2011, finished goods inventory balance was $24,200. Cost of goods manufactured during the period was: a. $225,600 b. $240,400 c. $233,000 d. $288,800 23. Cost of goods sold for a manufacturer equals cost of goods manufactured plus: a. ending finished goods inventory less beginning finished goods inventory ending work in process inventory less beginning work in process inventory beginning finished goods inventory less ending finished goods inventory beginning work in process inventory less ending work in process inventory b. c. d. Which of the following is the correct flow of manufacturing costs? a. b. c. d. 24. Work in process, finished goods, raw materials, cost of goods sold Raw materials, work in process, finished goods, cost of goods sold Raw materials, finished goods, cost of goods sold, work in process. Cost of goods sold, raw materials, work in process, finished goods. 25. Reedy Company reports the following information for 2012- Direct materials used Direct labor incurred S68,250 27,000 25,000 Work in process inventory. January 1, 2012 11.000 Factory overhead is 75% of the cost of direct labor work in process inventory on December 31, 2012, is: a. $16,250 b. $13,500 c. $8,500 d. $18,750 At the end of the year, overhead applied was $35,000,000. Actual overhead was $34,300,000. Closing over/under applied overhead into cost of goods sold would cause net income to: a. Decrease by $700,000 b. Remain constant 26. c. Decrease by $300,000 d. Increase by $700,000