Ch. 18 Practice Test B 1. Classity the following costs of a book publisher as product or period. Product costs should be Por C PRO or PD further classified as prime or conversion. A. Costs of rolls of blank paper B. Cost of cardboard displays for bookstores C. Wages of accounting clerks that process production payroll E. Salary of pressroom supervisor F. Shipping charges for carbon black inks to be used G. Cost of temporary workers hired for production work to Utility costs at the printing facility get highly anticipated best seller printed on time H. I. J. Cost to ship books to Barnes &Noble Salary of editor-in-chief of publishing company Costs of quality testing during printing process Classify the following costs as fixed or variable F or V A. Costs of rolls of blank paper B. Wages of accounting clerks that process production payroll C. Salary of pressroom supervisor D. Shipping charges for carbon black inks to be used E. Cost of temporary hourly workers hired for production work to get highly anticipated best seller printed on time F. Cost to ship books to Barnes & Noble G. Salary of editor-in-chief of publishing company H. Costs of quality testing during printing process I Annual rent on printing facility 2. Variable costs are fixed per unit, but total costs vary with the number of units produced. A. True B. False 3. Fixed costs are fixed in total, but unit cost varies with the number of units produced. A. True B. False 4. Which cost can be categorized as both a prime cost and a conversion cost? Chapter 18 Practice Test C 1. Classify the following items as being either product costs or period costs. If product cost is identified, indicate if the cost is prime or conversion. PRO or PD a. Cost of machinery repairs b. Cost of fabric for a clothing manufacturer c. Factory insurance cost d. Rent on factory building e. Cost of advertising the product f Cost of lubricating oils for equipment g. Wages paid to a machine operator h. Cost of utilities in the factory building i. Wages paid to factory foreman j. Wages paid to the president's secretary Classify the following costs as product or period. indirect. If 2. If product, further classify as direct or DorI PRO or PD A. Electricity used to for lighting in production area B. Wages of public relations personnel C. Cost of compressor units used in producing air conditioners D. Shipping charges for car bolts shipped to Ford factory E. Uncut sheet metal used to make oven sides and doors F. Salary of the CFO of the manufacturing company 3. The Tech Company has the following account balances: $7,000 13,000 $600,000 Work in Process Inventory, 12/31/15 Sales Raw Materials Inventory, 12/31/15 Sales Commissions Expense Depreciation Factory Equipment Wages of Assembly Workers Factory Rent& Utilities 35,000 10,000 12,000 9,000 25,000 Raw Materials Inventory, 12/31/16 Interest Expense Indirect Factory Labor Advertising Expense Factory Manager Salary 2,500 3,000 10,000 1,000 27,000 Depreciation Sales Equipment Administrative Expenses 3,000 5,000 Raw Material Purchases Work in Process Inventory, 12-31-16 13,000 A. Categorize items as either MS (Manufacturing Statement) or IS (Income Statement B. Prepare a manufacturing statement for the year ended 12-31-16
