Total Manufacturing costs incurred in a given period are the same as Cost of Goods Manufactured.

True or False

A marketing campaign designed to increase a product's sales would be considered a product cost.

True or False

All the following would typically be considered indirect costs of manufacturing a particular General Motors manufactured automobile to be delivered to Discount Car Rentals: electricity to run production equipment, the factory manager's salary, and the cost of the engine installed in the automobile.

True or False

All the following costs should be considered by an accounting firm to be indirect costs of preparing a tax return for a particular client: rent on the accounting firm's offices, the accounting firm's receptionist's wages, the costs of heating the accounting firm's offices, and the depreciation on the personal computer in the office of the accountant who has been assigned the client.

True or False

All the following costs should be considered by an accounting firm to be indirect costs of preparing a tax return for a particular client: rent on the accounting firm's offices, the accounting firm's receptionist's wages, the costs of heating the accounting firm's offices, and the depreciation on the personal computer in the office of the accountant who has been assigned the client.

True or False

Which of the following is defined as the difference between total sales in dollars and total variable expenses?

Multiple Choice

• Margin of safety.
• Operating income.
• The gross margin.
• The contribution margin

How is the margin of safety percentage computed?

Multiple Choice

• Break-even sales divided by Total sales.
• Total sales minus Break-even sales.
• (Total sales - Break-even sales) divided by Break-even sales.
• (Total sales - Break-even sales) divided by Total sales.

The break-even point in sales for Rice Company is $400,000, and the company's contribution margin ratio is 20%. Its income tax rate is 20%. If Rice Company desires an after-tax operating profit of $100,000, what would total sales have to be?

Multiple Choice

• $1,050,360.
• $1,060,000.
• $1,025,000.
• Cannot be determined without additional information.

Process costing systems are best used when many different products and services are produced each period.

True or False

When preparing a job, a bill of materials is prepared by the production department.

True or False

A job cost sheet only contains the costs assigned to a job in a given period.

True or False

Only variable costs are included when determining job costs.

True or False

Over- or underapplied overhead may be closed off entirely to Cost of Goods Sold if the amount is insignificant.

True or False

Manufacturers of high-end hand-made furniture are well suited to job-order costing systems

True or False