7 MULTIPLE CHOICE QUESTIONS

1. PRODUCT COSTS INCLUDE

ADVERTISING, DEPRECIATION ON SELLING OFFICE EQUIPMENT, OVERHEAD OR MARKETING AND ADMIN SAALARIES.

2. WHICH OF THE FOLLOWING WOULD BE AN EXAMPLE OF OVERHEAD COST?

SCREWS USED TO MANUFACTURE LIGHTING FIXTURES, WAGES OF EMPLOYEES BUILDING THE INVENTORY ITEMS, TRESURER'S SALARY, OR ENGINE ON AN AIRPLANE?

3. COST OF RAW MATERIALS USED IS?

TOTAL PRODUCT COST INCURRED DURING THE CURRENT PERIOD+BEGINNING WORK IN PROCESS-ENDING WORK IN PROCESS, DIRECT MATERIALS PURCHASED, BEGINNING RAW MATERIAL+RAW MATERIAL PURCHASES-ENDING MATERIAL INVENTORY OR NONE OF THESE ARE CORRECT.

4. IN JULY, EXONO COMPANY PURCHASED MATERIALS COSTING $21,000 AND INCURRED DIRECT LABOR COST OF $18,000. OVERHEAD TOTALED $32,000 FOR THE MONTH. INFORMATION ON INVENTORIES WAS AS FOLLOWS

JULY 1

MATERIALS $6200

WORK IN PROCESS $700

FINISHED GOODS $3300

JULY 31

MATERIALS 6700

WORK IN PROCESS 1200

FINISHED GOODS 2700

WHAT WAS THE COST OF DIRECT MATERIALS USED IN JULY?

21900, 20500, 21500, 2100

5.

Assume that raw materials used in the prior question is $22,000. Econo Company also incurred direct labor cost of $18,000 and Overhead totaled $32,000 for the month. Information on inventories was as follows:

	July 1	July 31
Work in process	$ 700	$1,200
Finished goods	$3,300	$2,700

What were the total manufacturing costs in July?

$50,000

$72,000

$70,100

$71,500

6.

Assumed that total manufacturing costs in the previous question was $71,000. Information on inventories was as follows:

	July 1	July 31
Work in process	$ 700	$1,200
Finished goods	$3,300	$2,700

What was the cost of goods manufactured for July?

$71,000

$70,500

$71,500

$71,600

7.

Assume that cost of goods manufactured in the previous question was $70,000. Information on inventories was as follows:

	July 1	July 31
Work in process	$ 700	$1,200
Finished goods	$3,300	$2,700

What was the cost of goods sold for July?

		$69,400
		$70,200
		$70,600
		$69,500