DD 41. 15 10. Once production is completed and before the product is sold, the costs of production are held in what account? A. selling, general and administrative expenses B. cost of goods sold on the Income Statement C. inventory on the Balance Sheet D. expected revenue 11. One of the criteria used for classifying an item as a direct material is that it is considered a A. major cost of the product being produced B. part of cost of goods available for sale C. fixed cost D. period cost 12. Real estate taxes paid on a factory building are considered a: A. period cost B. part of manufacturing overhead C. selling, general and administrative cost D. deferred asset 13. During its first year of operation, Bayer Company incurred the following: Units produced 5,000 Units sold 4,000 Direct materials used Direct labor used Rent on the factory $19,000 Administrative office salaries $120,000 Sales $ 350,000 0 $20,000 $40,000 The cost of goods sold for Beyer Company is: A. $56,000 B. $63,200 C. $68,000 D. $70,000 14. When a company borrows cash from a bank which of the following happens to the accounting equation: A. cash decreases B. common stock increases C. retained earnings increases D. liabilities increase 15. "Cooking the books" is an expression used to state that management is: A. auditing the records B. correcting the records C. analyzing the records D. manipulating the records 4