Question : 7) Product costs used for external reporting generally include: A) : 1217076

 

7) Product costs used for external reporting generally include:

A) manufacturing costs only

B) design costs plus manufacturing costs

C) all costs incurred along the value chain

D) All of these answers are correct.

8) Inventoriable costs for external reporting purposes are also called:

A) product costs

B) period costs

C) variable costs

D) direct manufacturing costs

9) For external reporting:

A) costs are classified as either inventoriable or period costs

B) costs reflect current values

C) there are no prescribed rules since no one is exactly sure how investors and creditors will use these numbers

D) costs include amounts that reflect both current and future benefits

10) Which of the following statements is FALSE?

A) Product costs and inventoriable costs are interchangeable terms.

B) Inventoriable costs are important for GAAP.

C) Inventoriable costs are a special case of period costs.

D) “Product costs” refers to the particular costs of a product for the purpose at hand.

11) Debated items that some companies include as direct manufacturing labor include:

A) fringe benefits

B) vacation pay

C) training time

D) All of these answers are correct.

12) Mario Garcia is paid $20 an hour for straight-time and $30 an hour for overtime. One week she worked 42 hours, which included 2 hours of overtime. Compensation would be reported as:

A) $800 of direct labor and $60 of manufacturing overhead

B) $800 of direct labor and $0 of manufacturing overhead

C) $840 of direct labor and $20 of manufacturing overhead

D) $860 of direct labor and $0 of manufacturing overhead

13) Dave Rigby is paid $20 an hour for straight-time and $30 an hour for overtime. One week he worked 45 hours, which included 5 hours of overtime, and 3 hours of idle time caused by material shortages. Compensation would be reported as:

A) $740 of direct labor and $210 of manufacturing overhead

B) $840 of direct labor and $110 of manufacturing overhead

C) $900 of direct labor and $50 of manufacturing overhead

D) $890 of direct labor and $60 of manufacturing overhead

14) Lou Marinaro worked 44 hours last week for Breakbad Manufacturing. Of the 44 hours 4 hours were considered overtime, and also Marinaro was idle for 5 of the 44 hours due to an equipment malfunction. Marinaro makes $40 per hour and is paid $60 an hour (time and a half) for overtime. Marinaro’s total compensation for that week would be ________, and assuming Breakbad charges overtime premium and idle time to indirect labor, the amount of this compensation credited to indirect labor would be ________.

A) $1,680; $80

B) $1,680; $280

C) $1,840; $80

D) $1,840; $280

15) Overtime premium consists of the wages paid to all workers (for both direct labor and indirect labor) in excess of their straight-time wage rates.

16) A product cost that is useful for one decision may not be useful information for another decision.

 

 

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