QUESTION 11

2. Which of the following costs are capitalized for self-constructed assets?
4. a.Labor andoverheadonly
5. b.Materials andlabor only
6. c.Materials and overhead only
7. d.Materials,labor andoverhead

QUESTION 12

1. Which of the following is a period cost?
2. a.Labor costs.
3. b.Freight in.
4. c.Production costs.
5. d.Selling costs.

QUESTION 13

1. Morgan Manufacturing Company has the following account balances at year end:
2. Officesupplies$4,000
3. Rawmaterials27,000
4. Work-in-process59,000
5. Finishedgoods72,000
6. Prepaidinsurance6,000
8. What amount should Morgan report as inventories in its balance sheet?
9. a.$72,000
10. b.$76,000
11. c.$158,000
12. d.$162,000

QUESTION 14

1. Checkers uses the periodic inventory system. For the current month, the beginning inventory consisted of 1,200 units that cost $12 each. During the month, the company made two purchases: 500 units at $13 each and 2,000 units at $13.50 each. Checkers also sold 2,150 units during the month. Using the FIFO method, what is the ending inventory?
2. a.$20,073
3. b.$18,600
4. c.$20,925
5. d.$18,950

QUESTION 15

1. Designated market value
2. a.is always the middle value of replacement cost, net realizable value, and net realizable value less a normal profit margin.
3. b.should always be equal to net realizable value.
4. c.may sometimes exceed net realizable value.
5. d.should always be equal to net realizable value less a normal profit margin.

QUESTION 16

1. The floor to be used in applying the lower-of-cost-or-market method to inventory is determined as the
2. a.net realizable value.
3. b.net realizable value less normal profit margin.
4. c.replacement cost.
5. d.selling price less costs of completion and disposal.

QUESTION 17

1. Oslo Corporation has two products in its ending inventory, each accounted for at the lower of cost or market. A profit margin of 30% on selling price is considered normal for each product. Specific data with respect to each product follows:
2. Product #1Product #2
3. Historicalcost$40.00$70.00
4. Replacementcost45.0054.00
5. Estimated cost todispose10.0026.00
6. Estimated sellingprice80.00130.00
8. In pricing its ending inventory using the lower-of-cost-or-market, what unit values should Oslo use for products #1 and #2, respectively?
9. a.$40.00 and $65.00.
10. b.$46.00 and $65.00.
11. c.$46.00 and $60.00.
12. d.$45.00 and $54.00.

QUESTION 18

2. Which of the following principles best describes the conceptual rationale for the methods of matching depreciation expense with revenues?
4. a.immediaterecognition
5. b.partialrecognition
6. c.associatingcause andeffect
7. d.systematic and rationalallocation

QUESTION 19

1. Hart Company purchased a depreciable asset for $360,000. The estimated salvage value is $24,000, and the estimated useful life is 8 years. The double-declining balance method will be used for depreciation. What is the depreciation expense for the second year on this asset?
2. a.$42,000
3. b.$63,000
4. c.$67,500
5. d.$90,000

QUESTION 20

1. On January 1, 2012, Graham Company purchased a new machine for $2,100,000. The new machine has an estimated useful life of nine years and the salvage value was estimated to be $75,000. Depreciation was computed on the sum-of-the-years'-digits method. What amount should be shown in Graham's balance sheet at December 31, 2013, net of accumulated depreciation, for this machine?
2. a.$1,695,000
3. b.$1,335,000
4. c.$1,306,666
5. d.$1,244,250