$
5,000
Administrative salaries
$
81,000
Indirect labor
$
25,000
Sales commissions
$
48,000
Depreciation of production equipment
$
20,000
Depreciation of administrative equipment
$
30,000
Direct labor
$
129,000
Advertising
$
135,000
The total of the manufacturing overhead costs listed above for September is:
A) $586,000
B) $50,000
C) $292,000
D) $30,000
Answer: B
Explanation: Manufacturing overhead includes: Utilities, factory; Indirect labor; and Depreciation of production equipment. $5,000 + $25,000 + $20,000 = $50,000
Difficulty: 2 Medium
Topic: Cost Classifications for Manufacturing Companies
Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing cost categories.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
186) A partial listing of costs incurred at Archut Corporation during September appears below:
Direct materials
$
113,000
Utilities, factory
$
5,000
Administrative salaries
$
81,000
Indirect labor
$
25,000
Sales commissions
$
48,000
Depreciation of production equipment
$
20,000
Depreciation of administrative equipment
$
30,000
Direct labor
$
129,000
Advertising
$
135,000
The total of the product costs listed above for September is:
A) $292,000
B) $294,000
C) $50,000
D) $586,000
Answer: A
Explanation: Product costs include: Direct materials; Utilities, factory; Indirect labor; Depreciation of production equipment; and Direct labor. $113,000 + $5,000 + $25,000 + $20,000 + $129,000 = $292,000
Difficulty: 2 Medium
Topic: Cost Classifications for Preparing Financial Statements
Learning Objective: 01-03 Understand cost classifications used to prepare financial statements: product costs and period costs.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
187) A partial listing of costs incurred at Archut Corporation during September appears below:
Direct materials
$
113,000
Utilities, factory
$
5,000
Administrative salaries
$
81,000
Indirect labor
$
25,000
Sales commissions
$
48,000
Depreciation of production equipment
$
20,000
Depreciation of administrative equipment
$
30,000
Direct labor
$
129,000
Advertising
$
135,000
The total of the period costs listed above for September is:
A) $294,000
B) $344,000
C) $292,000
D) $50,000
Answer: A
Explanation: Period costs include: Administrative salaries; Sales commissions; Depreciation of administrative equipment; and Advertising. $81,000 + $48,000 + $30,000 + $135,000 = $294,000
Difficulty: 2 Medium
Topic: Cost Classifications for Preparing Financial Statements
Learning Objective: 01-03 Understand cost classifications used to prepare financial statements: product costs and period costs.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
188) A partial listing of costs incurred during March at Febbo Corporation appears below:
Factory supplies
$
9,000
Administrative wages and salaries
$
85,000
Direct materials
$
126,000
Sales staff salaries
$
30,000
Factory depreciation
$
33,000
Corporate headquarters building rent
$
43,000
Indirect labor
$
26,000
Marketing
$
65,000
Direct labor
$
99,000
The total of the period costs listed above for March is:
A) $68,000
B) $293,000
C) $291,000
D) $223,000
Answer: D
Explanation: Period costs include administrative wages and salaries, sales staff salaries, corporate headquarters building rent, and marketing. $85,000 + $30,000 + $43,000 + $65,000 = $223,000
Difficulty: 2 Medium
Topic: Cost Classifications for Preparing Financial Statements