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51. Which of the following is correct? a.Selling costs are product costs. b.Manufacturing overhead..

by | Sep 9, 2023 | accounting

 

 

51.              Which of the following is correct?

a.Selling costs are product costs.

b.Manufacturing overhead costs are product costs.

c.Interest costs for routine inventories are product costs.

d.All of these.

 

52.              All of the following costs should be charged against revenue in the period in which costs are incurred except for

a.manufacturing overhead costs for a product manufactured and sold in the same accounting period.

b.costs which will not benefit any future period.

c.costs from idle manufacturing capacity resulting from an unexpected plant shutdown.

d.costs of normal shrinkage and scrap incurred for the manufacture of a product in ending inventory.

 

53.              Which of the following types of interest cost incurred in connection with the purchase or manufacture of inventory should be capitalized as a product cost?

a.Purchase discounts lost

b.Interest incurred during the production of discrete projects such as ships or real estate projects

c.Interest incurred on notes payable to vendors for routine purchases made on a  repetitive basis

d.All of these should be capitalized.

 

54.              The use of a Discounts Lost account implies that the recorded cost of a purchased inventory item is its

a.invoice price.

b.invoice price plus the purchase discount lost.

c.invoice price less the purchase discount taken.

d.invoice price less the purchase discount allowable whether taken or not.

 

55.              The use of a Purchase Discounts account implies that the recorded cost of a purchased inventory item is its

a.invoice price.

b.invoice price plus any purchase discount lost.

c.invoice price less the purchase discount taken.

d.invoice price less the purchase discount allowable whether taken or not.

 

Use the following information for questions 56 and 57.

 

During 2010, which was the first year of operations, Oswald Company had merchandise purchases of $985,000 before cash discounts.  All purchases were made on terms of 2/10, n/30.  Three-fourths of the items purchased were paid for within 10 days of purchase.  All of the goods available had been sold at year end.

 

56.              Which of the following recording procedures would result in the highest cost of goods sold for 2010?

1.              Recording purchases at gross amounts

2.               Recording purchases at net amounts, with the amount of discounts not taken shown under “other expenses” in the income statement

a. 1

b.2

c.Either 1 or 2  will result in the same cost of goods sold.

d.Cannot be determined from the information provided.

 

57.              Which of the following recording procedures would result in the highest net income for 2010?

1.               Recording purchases at gross amounts

2.              Recording purchases at net amounts, with the amount of discounts not taken shown under “other expenses” in the income statement

a.1

b.2

c.Either 1 or 2 will result in the same net income.

d.Cannot be determined from the information provided.

 

58.              When using the periodic inventory system, which of the following generally would not be separately accounted for in the computation of cost of goods sold?

a.Trade discounts applicable to purchases during the period

b.Cash (purchase) discounts taken during the period

c.Purchase returns and allowances of merchandise during the period

d.Cost of transportation-in for merchandise purchased during the period

 

59.              Costs which are inventoriable include all of the following except

a.costs that are directly connected with the bringing of goods to the place of business of the buyer.

b.costs that are directly connected with the converting of goods to a salable condition.

c.buying costs of a purchasing department.

d.selling costs of a sales department.

 

60.              Which inventory costing method most closely approximates current cost for each of the following:

Ending Inventory              Cost of Goods Sold

a.FIFOFIFO

b.FIFOLIFO

c.LIFOFIFO

d.LIFOLIFO

 

 

  

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