A) A company purchases and stores tires, handlebars, and frames to use in producing bicycles. These are collectively called:

A. Cost of goods sold. B. Raw materials inventory. C. Finished goods inventory. D. Work in process inventory. E. Conversion costs.

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B) Which of the following is an indirect cost of manufacturing cars?

A. Assembly-line wages. B. Tires. C. Supervisor salary. D. Glass windows. R. Seats.

----------------------- C) During production, some costs are capitalized as inventory. These types of costs are referred to as:

A. Period costs. B. Product costs. C. General costs. D. Administrative costs. E. Selling expenses.

----------------------- D) Some costs are expensed to the income statement, while some are capitalized to inventory. The two types of costs are classified as:

A. Direct labor versus indirect labor costs. B. Direct materials versus indirect materials costs. C. Financial versus managerial costs. D. Service versus manufacturing costs. E. Product versus period costs.