Rustic Living Furniture Company manufactures furniture at its central Kentucky factory. Some of its costs from the past year include:

131) Indirect materials and indirect labor are ________ for a manufactured product.
A) overhead and period costs
B) operating and period costs
C) overhead and product costs
D) operating and product costs
Answer:  C
Diff: 2
LO:  2-4
EOC:  E2-21A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits

132) Manufacturers consider selling and administrative costs to be
A) period costs.
B) conversion costs.
C) inventoriable costs.
D) prime costs.
Answer:  A
Diff: 2
LO:  2-4
EOC:  E2-21A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits

133) Which of the following is an example of a period cost when manufacturing products?
A) Depreciation expense on factory equipment
B) Advertising expense
C) Indirect materials used in the factory
D) Property taxes on the plant
Answer:  B
Diff: 2
LO:  2-4
EOC:  E2-21A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits

134) Which of the following is an example of an inventoriable cost when manufacturing products?
A) Depreciation on office equipment
B) Depreciation on store building
C) Sales salaries expenses
D) Depreciation on factory equipment
Answer:  D
Diff: 2
LO:  2-4
EOC:  E2-21A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits

135) When manufacturing products, direct labor and direct materials are classified as
A) period costs and expensed when incurred.
B) product costs and expensed when the goods are sold.
C) product costs and expensed when incurred.
D) period costs and expensed when the goods are sold.
Answer:  B
Diff: 2
LO:  2-4
EOC:  E2-21A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits

136) Certain materials used in a manufacturing plant cannot be traced to a specific unit. What are these materials called?
A) General materials
B) Direct materials
C) Indirect materials
D) Finished materials
Answer:  C
Diff: 2
LO:  2-4
EOC:  E2-21A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits

137) Rent on a factory building would be considered to be a ________ cost.
A) product
B) period
C) direct
D) none of the above
Answer:  A
Diff: 2
LO:  2-4
EOC:  E2-21A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits

138) The ________ element in the value chain would contain inventoriable costs for a manufacturer.
A) research and development
B) production
C) design
D) distribution
Answer:  B
Diff: 2
LO:  2-4
EOC:  E2-18A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits

139) Pink Ribbon Shoppe, a clothing retailer, had the following total costs as grouped by value chain element:

Research and development     $ 53,000
Design     $ 17,000
Purchases     $ 72,000
Marketing     $ 42,000
Distribution     $ 58,000
Customer service     $ 35,000

What were the company's inventoriable costs?
A) $142,000
B) $17,000
C) $72,000
D) $89,000
Answer:  C
Diff: 2
LO:  2-4
EOC:  E2-18
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits
140) Pink Ribbon Shoppe, a clothing retailer, had the following total costs as grouped by value chain element:

Research and development     $ 53,000
Design     $ 17,000
Purchases     $ 72,000
Marketing     $ 42,000
Distribution     $ 58,000
Customer service     $ 35,000

What were the company's period costs?
A) $205,000
B) $277,000
C) $100,000
D) $135,000
Answer:  A
Explanation:  A) Calculations: $ 53,000 + 17,000 + 42,000 + 58,000 + 35,000 = $205,000
Diff: 2
LO:  2-4
EOC:  E2-18
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits

141) Country Furniture Company manufactures furniture at its Akron, Ohio, factory. Some of its costs from the past year include:

Depreciation on sales office    $    9,000
Depreciation on factory equipment     16,000
Factory supervisor salary     50,500
Sales commissions     23,000
Lubricants used in factory equipment     3,000
Insurance costs for factory     21,000
Wages paid to maintenance workers     115,000
Fabric used to upholster furniture     10,000
Freight-in (on raw materials)     3,000
Costs of delivery to customers     9,000
Wages paid to assembly-line workers     155,500
Lumber used to build product     82,000
Utilities in factory     54,500
Utilities in sales office     26,500

Product costs for Country Furniture Company totaled
A) $510,500.
B) $486,500.
C) $370,000.
D) $526,500.
Answer:  A
Explanation:  A) Calculations: $ 16,000 + 50,500 + 3,000 + 21,000 + 115,000 + 10,000 + 3,000 + 155,500 + 82,000 + 54,500 = $ 510,500
Diff: 2
LO:  2-4
EOC:  E2-21A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits

142) Country Furniture Company manufactures furniture at its Akron, Ohio, factory. Some of its costs from the past year include:

Depreciation on sales office    $    9,000
Depreciation on factory equipment     16,000
Factory supervisor salary     50,500
Sales commissions     23,000
Lubricants used in factory equipment     3,000
Insurance costs for factory     21,000
Wages paid to maintenance workers     115,000
Fabric used to upholster furniture     10,000
Freight-in (on raw materials)     3,000
Costs of delivery to customers     9,000
Wages paid to assembly-line workers     155,500
Lumber used to build product     82,000
Utilities in factory     54,500
Utilities in sales office     26,500

Period costs for Country Furniture Company totaled
A) $41,000.
B) $129,000.
C) $44,500.
D) $67,500.
Answer:  D
Explanation:  D) Calculations: $ 9,000 + 23,000 + 9,000 + 26,500 = $ 67,500
Diff: 2
LO:  2-4
EOC:  E2-21A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits

143) Rustic Living Furniture Company manufactures furniture at its central Kentucky factory. Some of its costs from the past year include:

Wages paid to maintenance workers     $ 60,000
Fabric used to upholster furniture     $ 8,000
Wages paid to assembly-line workers     $ 100,000
Lumber used to build product     $ 15,000
Sales commissions     $ 7,500
Insurance costs for factory     $ 21,000
Freight-in (on raw materials)     $ 3,000
Utilities in factory     $ 12,000
Factory supervisor salary     $ 60,000
Depreciation on factory equipment     $ 18,000
Utilities in sales office     $ 26,500
Costs of delivery to customers     $ 8,000
Depreciation on sales office     $ 1,000
Lubricants used in factory equipment     $ 500

Product costs for Rustic Living Furniture Company totaled
A) $203,500.
B) $273,500.
C) $297,500.
D) $295,000.
Answer:  C
Explanation:  C) Calculations: $ 18,000 + 60,000 + 500 + 21,000 + 12,000 + 60,000 + 8,000 + 3,000 + 100,000 + 15,000 = $ 297,500
Diff: 2
LO:  2-4
EOC:  E2-21A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits

144) Rustic Living Furniture Company manufactures furniture at its central Kentucky factory. Some of its costs from the past year include:

Wages paid to maintenance workers     $ 60,000
Fabric used to upholster furniture     $ 8,000
Wages paid to assembly-line workers     $ 100,000
Lumber used to build product     $ 15,000
Sales commissions     $ 7,500
Insurance costs for factory     $ 21,000
Freight-in (on raw materials)     $ 3,000
Utilities in factory     $ 12,000
Factory supervisor salary     $ 60,000
Depreciation on factory equipment     $ 18,000
Utilities in sales office     $ 26,500
Costs of delivery to customers     $ 8,000
Depreciation on sales office     $ 1,000
Lubricants used in factory equipment     $ 500

Period costs for Rustic Living Furniture Company totaled
A) $43,000.
B) $35,500.
C) $16,500.
D) $65,000.
Answer:  A
Explanation:  A) Calculations: $ 1,000 + 7,500 + 8,000 + 26,500 = $ 43,000
Diff: 2
LO:  2-4
EOC:  E2-21A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits