1. Which of the following items would be classified as a factory overhead cost for a company that makes patio tables and chairs? (Select the five that apply)

O a. Depreciation on finished goods warehouse

b. Machine lubricants.

c. Commission on sale of chairs.

d. Metal tubing used for furniture frames

E. Thread used in sewing chair cushions.

f. Depreciation on factory machinery.

g. Cost of factory utilities.

h. Wages of furniture assemblers

i. Salary of production supervisor.

O j. Fabric used for chair cushions

2.

Which of the following statements about absorption costing is true? (Select the five that apply)

a. It treats fixed overhead as a product cost.

b. It treats variable overhead as a product cost.

c. It shows gross profit as a major subtotal.

d. It is required by GAAP.

e. It treats direct labor as a product cost.

f. It facilitates CVP analysis.

3. Which of the following items would be classified as a selling and administrative cost for a company that makes patio tables and chairs?Select the two that apply

1. Wages of furniture assemblers
2. Machine lubricants
3. Cost of factory utilities
4. Depreciation on finished goods warehouse
5. Fabric used for chair cushions
6. Commission on sales of chairs
7. Salary of production supervisor
8. Metal tubing used for furniture frames
9. Thread used in sewing chair cushions
10. Depreciation on factory machine

4. The only difference between variable costing and throughput costing is with respect to the treatment of direct labor costs

True

O False

5. Which of the following items would be classified as a direct materials cost for a company that makes patio tables and chairs? (Select the two that apply)

a Commission on sale of chairs

b. Wages of furniture assemblers

c. Depreciation on factory machinery.

d. Depreciation on finished goods warehouse

e. Cost of factory utilities

f. Machine lubricants

g. Thread used in sewing chair cushions

h. Salary of production supervisor

I. Fabric used for chair cushions.

J. Metal tubing used for furniture frames.

6. Under variable costing:

1. companies can increase income by increasing the number of units produced
2. Only direct materials cost is included in cost of goods sold
3. All product and period costs are included in cost of goods sold
4. Only product costs that vary per unit are included in cost of goods sold

7. Which of the following does not create an increase in the work in process inventory?

1. Purchase of direct materials
2. Application of manufacturing overhead
3. incurrence of direct labor costs
4. Requisition of direct materials