ACCT 310 Final Exam Questions And
Correct Answers
\.Which of the following is not true of costs?
A. Costs are different from expenses.
B. Eventually, all costs will become expenses.
C. Unexpired costs are revenues.
D. Expired costs are expenses. - Answer- C. Unexpired costs are revenues.
\.Which of the following is not true of product costs?
A. If a product is incurred, an asset will be generated or increased.
B. They are costs incurred in making or buying products.
C. They are expenses.
D. They are also called inventoriable costs. - Answer- C. They are expenses
\.Manufacturing costs are:
A. Cost of goods sold
B. Overhead costs
C. Product costs
D. Expenses - Answer- C. Product costs
\.Manufacturing overhead costs are not:
A. Product costs
,B. Inventoriable costs
C. Period costs
D. Indirect costs - Answer- C. Period costs
\.Costs incurred in the manufacturing process are recognized as expenses:
A. When cash is received for sale.
B. When the product is sold.
C. When the product is completed.
D. As the costs are incurred in production. - Answer- B. When the product is sold.
\.There are two people living in a house, Hansen and Julia. For their entertainment, they
subscribe to a cable TV service that costs $75 per month. To them, this cost is a(n):
A. Manufacturing overhead cost
B. Product cost
C. Indirect cost
D. Variable cost - Answer- C. Indirect cost
\.Which of the following is a period cost?
A. depreciation on the equipment in the fitness center used by production workers
B. product delivery cost
C. cost that is incurred at regular intervals, such as rent
D. salaries of the production supervisors - Answer- B. product delivery cost
\.Which of the following is not true of manufacturing overhead costs?
A. They can be specifically traced to individual products.
B. They are indirect costs.
,C. They are part of conversion costs.
D. They are part of manufacturing costs. - Answer- A. They can be specifically traced to
individual products.
\.Which of the following is not true of cost allocation?
A. Only direct manufacturing costs are allocated among different segments or products.
B. Only indirect manufacturing costs are to be allocated among different products.
C. Cost allocation is based on some rule, which is arbitrary.
D. Some (not all) manufacturing costs are to be allocated among segments or products. -
Answer- A. Only direct manufacturing costs are allocated among different segments or
products.
\.A company (making multiple products) reported the following costs:
Wages for making Product A: $2,000
Sales commissions: 500
Utilities for factory: 1,300
Utilities for store: 200
Direct materials: 900
Depreciation for factory machines: 800
Salaries for corporate executives: 400
Factory supplies: 100
Production supervision: 300
What is the total amount of product costs?
A. $5,800
B. $4,100
C. $4,500
D. $5,400 - Answer- D. $5,400
, \.Use the information given in the above question. What is the total amount of manufacturing
overhead costs?
A. $3,300
B. $2,500
C. $2,700
D. $1,800 - Answer- B. $2,500
\.In July, I started making 1 unit of a product. I spent $400, but it was not finished. In August, I
finished the unit which was started in July. For that unit, I incurred another $100. Also, I started
making 3 more units. Of those 3 units, 2 were finished and 1 unit was not. For the 2 finished
units, I incurred $500 each. For the 1 unfinished unit, I incurred $120. For August, my Cost of
Goods Manufactured was:
A. $1,620
B. $1,100
C. $1,500
D. $1,220 - Answer- C. $1,500
\.I made a product at a cost of $120. I incurred a $10 cost in advertising the product. Then, I sold
the product at a price of $180. My Cost of Goods Sold was:
A. $60
B. $120
C. $130
D. $50 - Answer- B. $120
\.The following cost and inventory data are taken from the accounting records of Mason
Company for the year just completed:
Correct Answers
\.Which of the following is not true of costs?
A. Costs are different from expenses.
B. Eventually, all costs will become expenses.
C. Unexpired costs are revenues.
D. Expired costs are expenses. - Answer- C. Unexpired costs are revenues.
\.Which of the following is not true of product costs?
A. If a product is incurred, an asset will be generated or increased.
B. They are costs incurred in making or buying products.
C. They are expenses.
D. They are also called inventoriable costs. - Answer- C. They are expenses
\.Manufacturing costs are:
A. Cost of goods sold
B. Overhead costs
C. Product costs
D. Expenses - Answer- C. Product costs
\.Manufacturing overhead costs are not:
A. Product costs
,B. Inventoriable costs
C. Period costs
D. Indirect costs - Answer- C. Period costs
\.Costs incurred in the manufacturing process are recognized as expenses:
A. When cash is received for sale.
B. When the product is sold.
C. When the product is completed.
D. As the costs are incurred in production. - Answer- B. When the product is sold.
\.There are two people living in a house, Hansen and Julia. For their entertainment, they
subscribe to a cable TV service that costs $75 per month. To them, this cost is a(n):
A. Manufacturing overhead cost
B. Product cost
C. Indirect cost
D. Variable cost - Answer- C. Indirect cost
\.Which of the following is a period cost?
A. depreciation on the equipment in the fitness center used by production workers
B. product delivery cost
C. cost that is incurred at regular intervals, such as rent
D. salaries of the production supervisors - Answer- B. product delivery cost
\.Which of the following is not true of manufacturing overhead costs?
A. They can be specifically traced to individual products.
B. They are indirect costs.
,C. They are part of conversion costs.
D. They are part of manufacturing costs. - Answer- A. They can be specifically traced to
individual products.
\.Which of the following is not true of cost allocation?
A. Only direct manufacturing costs are allocated among different segments or products.
B. Only indirect manufacturing costs are to be allocated among different products.
C. Cost allocation is based on some rule, which is arbitrary.
D. Some (not all) manufacturing costs are to be allocated among segments or products. -
Answer- A. Only direct manufacturing costs are allocated among different segments or
products.
\.A company (making multiple products) reported the following costs:
Wages for making Product A: $2,000
Sales commissions: 500
Utilities for factory: 1,300
Utilities for store: 200
Direct materials: 900
Depreciation for factory machines: 800
Salaries for corporate executives: 400
Factory supplies: 100
Production supervision: 300
What is the total amount of product costs?
A. $5,800
B. $4,100
C. $4,500
D. $5,400 - Answer- D. $5,400
, \.Use the information given in the above question. What is the total amount of manufacturing
overhead costs?
A. $3,300
B. $2,500
C. $2,700
D. $1,800 - Answer- B. $2,500
\.In July, I started making 1 unit of a product. I spent $400, but it was not finished. In August, I
finished the unit which was started in July. For that unit, I incurred another $100. Also, I started
making 3 more units. Of those 3 units, 2 were finished and 1 unit was not. For the 2 finished
units, I incurred $500 each. For the 1 unfinished unit, I incurred $120. For August, my Cost of
Goods Manufactured was:
A. $1,620
B. $1,100
C. $1,500
D. $1,220 - Answer- C. $1,500
\.I made a product at a cost of $120. I incurred a $10 cost in advertising the product. Then, I sold
the product at a price of $180. My Cost of Goods Sold was:
A. $60
B. $120
C. $130
D. $50 - Answer- B. $120
\.The following cost and inventory data are taken from the accounting records of Mason
Company for the year just completed:
