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3: Chapter Product Costing and Cost Accumulation in a Batch Production Environment
MULTIPLE CHOICE QUESTIONS
1. Product costing in a manufacturing firm is the process of: A. accumulating the company's period costs. B. allocating costs among the firm's departments. C. placing a value on the company's fixed assets. D. assigning costs to the firm's …show more content…
Answer: E LO: 2, 5 Type: N Chapter 3 50 15. Which of the following statements about manufacturing cost flows is false? A. Direct materials, direct labor, and manufacturing overhead are entered in the Work-inProcess Inventory account. B. The Finished-Goods Inventory account will contain entries that reflect the cost of goods sold during the period. C. The cost of units sold during the period will typically appear on the income statement. D. When a company sells goods that cost $54,000 for $60,000, the firm will enter $6,000 in an account entitled Profit on Sale. E. Units are normally transferred from Work-in-Process Inventory to Finished-Goods Inventory. Answer: D LO: 2, 5 Type: N 16. Which of the following statements about materials is false? A. Acquisitions of materials are normally charged to the Purchases account. B. The use of direct materials gives rise to a debit to Work-in-Process Inventory. C. The use of indirect materials gives rise to a debit to Manufacturing Overhead. D. The use of indirect materials gives rise to a credit to Manufacturing Supplies Inventory. E. Direct materials are accounted for in a different manner than indirect materials. Answer: A LO: 5 Type: A 17. Longview Corporation recently used $72,000 of direct materials and $3,000 of indirect materials in production activities. The journal entries reflecting these transactions would include: A. a debit to Raw-Material Inventory for $72,000. B. a debit to Manufacturing Overhead for $3,000. C. a