a. Which of the following statements about research and development costs isnotvalid?

Multiple Choice

Decreases in R&D expenditures can be used to boost current period income.

Asset utilization ratios of R&D-intensive firms will be lower than those of non-R&D -intensive firms.

Asset utilization ratios of R&D-intensive firms will be higher than those of non-R&D- intensive firms.

As long as a firm continues to invest in R&D, total assets and total shareholders' equity will be understated.

b. The allocation of the cost of a wasting asset to future periods of benefit is termed as:

Multiple Choice

allocation.

amortization.

depreciation.

depletion.

c. Which of the following statements regarding inventory accounting isfalse?

Multiple Choice

The use of computerized optical scanning equipment has led to the adoption of perpetual inventory systems in high-volume settings.

The inventory carrying cost should include storage costs.

A manufacturing firm that uses a just-in-time system, and wants to avoid "stock-outs" if possible, would prefer a periodic inventory system.

Inventory carrying cost should include transportation costs that are paid by the purchaser.

d. Examples of variable costs include all the following except:

Multiple Choice

the plant manager's salary.

direct labor costs.

electricity used in running production machinery.

raw materials costs.