34. Which of the following is part of factory overhead cost?

	a.	sales commissions
	b.	depreciation of factory equipment and machines
	c.	depreciation of sales person's vehicle
	d.	direct materials used

ANSWER:

b

35. Which of the following manufacturing costs is an indirect cost of producing a product?

	a.	oil lubricants used for factory machinery
	b.	commissions for sales personnel
	c.	hourly wages of an assembly worker
	d.	memory chips for a microcomputer manufacturer

36. All of the following could be considered a direct material except

	a.	steel
	b.	fabric
	c.	glue
	d.	lumber

37. Prime costs are

	a.	direct materials and factory overhead
	b.	direct materials and direct labor
	c.	direct labor and factory overhead
	d.	period costs and factory overhead

38.. A product cost is

	a.	expensed in the period in which it is manufactured
	b.	shown with current liabilities on the balance sheet
	c.	shown with operating expenses on the income statement
	d.	expensed in the period the product is sold

39. Conversion costs are

	a.	direct materials and direct labor
	b.	direct materials and factory overhead
	c.	factory overhead and direct labor
	d.	direct materials and indirect labor

40. Which of the following is not a prime cost?

	a.	plant janitors wages
	b.	direct labor wages
	c.	machine operator wages
	d.	assembly line wages

41. The Darwin Company reports the following information:

Sales	$76,500
Direct materials used	7,300
Depreciation on factory equipment	4,700
Indirect labor	5,900
Direct labor	10,500
Factory rent	4,200
Factory utilities	1,200
Sales salaries expense	15,600
Office salaries expense	8,900
Indirect materials	1,200

Product costs are

	a.	$24,500
	b.	$30,300
	c.	$29,200
	d.	$35,000

42. Product costs

	a.	appear only on the balance sheet
	b.	appear only on the income statement
	c.	are expensed as costs are incurred for direct labor, direct material, and factory overhead
	d.	appear on both the income statement and balance sheet

43. The following are all product costs except

	a.	direct materials
	b.	sales and administrative expenses
	c.	direct labor
	d.	factory overhead

44. Indirect labor and indirect materials are classified as

	a.	factory overhead and product costs
	b.	factory overhead and period costs
	c.	operating costs and period costs
	d.	operating costs and product costs