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TEST BANK
Fundamental Managerial Accounting Concepts,
10th Edition by Edmonds All Chapters 1 to 14
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TABLE OF CONTENTS
Chapter 1 Management Accounting and Corporate Governance
Chapter 2 Cost Behavior, Operating Leverage, and Profitability Analysis
Chapter 3 Analysis of Cost, Volume, and Pricing to Increase Profitability
Chapter 4 Cost Accumulation, Tracing, and Allocation
Chapter 5 Cost Management in an Automated Business Environment: ABC, ABM,
and TQM
Chapter 6 Relevant Information for Special Decisions
Chapter 7 Planning for Profit and Cost Control
Chapter 8 Performance Evaluation
Chapter 9 Responsibility Accounting
Chapter 10 Planning for Capital Investments
Chapter 11 Product Costing in Service and Manufacturing Entities
Chapter 12 Job-Order, Process, and Hybrid Costing Systems
Chapter 13 Financial Statement Analysis
Chapter 14 Statement of Cash Flows
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Answers at the end of each Chapter
Chapter 01
10e
1)
Which of the following items are representative of managerial accounting?
Note: Check all that apply.
A) Financial statement in accordance with GAAP
B) Monthly sales reports used internally to allocate funds to divisions
C) Quarterly financial information sent to investors
D) Audited financial statements submitted to bankers with credit application
E) Budget projections used to make logistic decisions
2)
Which of the following costs are not included in the cost of manufacturing a product?
Note: Check all that apply.
A) Marketing
B) Production workers' wages
C) Factory janitor's wages
D) CEO salary
E) Depreciation on manufacturing equipment
3)
Which of the following is considered a downstream cost?
Note: Check all that apply.
A) Research and development
B) Production wages
C) Advertising cost
D) Warranty cost
E) Cost of internet in manufacturing plant
4)
Which of the following are examples of inventory holding costs?
Note: Check all that apply.
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A) Cost of warehouse space
B) Cost of shipping inventory to customers
C) Research and development cost
D) Cost of supervising inventory
E) Inventory spoilage cost
5)
Ashley Bradshaw is the manager of one department in a large store. In this
capacity,which of the following kinds of information would she be interested in?
A) Economic data
B) Financial data
C) Nonfinancial data
D) Financial, economic, and nonfinancial data
6)
All of the following are features of managerial accountingexcept:
A) information is provided primarily to insiders such as managers.
B) information includes economic and non-financial data as well as financial data.
C) information is characterized by objectivity, reliability, consistency, and accuracy.
D) information is reported continuously with a present or future orientation.
7)
Choose the answer that isnot a distinguishing characteristic of financial
accountinginformation.
A) It is global information that reflects the performance of the whole company.
B) It is focused primarily on the future.
C) It is more concerned with financial data than physical or economic data.
D) It is more highly regulated than managerial accounting information.
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8)
Managerial accounting information is limited or restricted by which of the
followingauthorities or principles?
A) Securities and Exchange Commission
B) Generally Accepted Accounting Principles
C) Managerial Accounting Standards Board
D) Value-Added Principle
9)
Select theincorrect statement regarding the relationship between type of user
and type ofinformation.
A) Middle managers need more nonfinancial, or operational data than
do seniorexecutives.
B) Assembly line supervisors need more immediate feedback on
performance than dosenior executives.
C) Senior executives need less aggregated information than do lower-level managers.
D) Senior executives use general economic information as well as financial information.
10)
Which group would use managerial accounting data of XY Company?
A) Stockholders
B) Managers
C) Executives
D) Both managers and executives
E) All of the groups would use managerial accounting data
11)
Which of the following is a feature of managerial accounting information?
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A) Information is not distributed to the public
B) Information reports on the company as a whole
C) Information is focused on the past
D) Information is reported annually
12)
Select thecorrect statement regarding managerial and financial accounting.
A) Users of managerial accounting information desire greater aggregation
than do usersof financial accounting information.
B) Both managerial and financial accounting use economic and physical data
in additionto financial data.
C) Financial accounting is more highly regulated than managerial accounting.
D) Timeliness is more important in financial accounting than in managerial accounting.
13)
Which of the following most exemplifies the value-added principle?
A) An ongoing process where continuous improvement is the goal.
B) A competitive management program that emphasizes quality.
C) Information gathering and reporting activities should be restricted to
those activitiesthat add value in excess of their cost.
D) Managerial accounting information is measured in economic, physical, and financial
terms.
14)
Which of the following costs would be classified as a direct cost for a
company thatproduces motorcycles?
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A) Rent of manufacturing facility that produces motorcycles.
B) Seats used in the motorcycles.
C) Wages of motorcycle assembly workers.
D) Both seats used in the motorcycles and wages of motorcycle assembly
workers arecorrect.
15)
Which of the following is a product cost for a construction company?
A) Cost of transporting raw materials to the job site
B) Wages paid to the company's payroll clerk
C) Rent of the company's main office
D) All of these.
16)
For a manufacturing company, product costs include all of the followingexcept:
A) indirect material costs.
B) warehousing costs of finished goods.
C) direct labor costs.
D) All of these are product costs.
17)
During its first year of operations, Connor Company paid $51,640 for direct
materialsand $19,800 in wages for production workers. Lease payments and
utilities on the productionfacilities amounted to $8,800. General, selling, and
administrative expenses were $9,800. Thecompany produced 6,800 units and sold
5,800 units for $16.80 a unit. The average cost to produce one unit is which of the
following amounts?
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A) $13.24
B) $11.80
C) $10.42
D) $13.83
18)
During its first year of operations, Connor Company paid $50,000 for direct
materials and $36,000 in wages for production workers. Lease payments and utilities
on the production facilities amounted to $14,000. General, selling, and
administrative expenses were $16,000. Thecompany produced 5,000 units and sold
4,000 units for $30.00 a unit. The average cost to produce one unit is which of the
following amounts?
A) $20.00
B) $16.00
C) $18.40
D) $25.00
19)
Green company incurred $58,500 in total manufacturing costs to produce 3,900
tea kettles. The company plans to sell the tea kettles for $52 per unit. Given this
information, what isthe average cost per unit?
A) $37
B) $15
C) $67
D) $52
20)
Green company incurred $20,000 in total manufacturing costs to produce 2,000
tea kettles. The company plans to sell the tea kettles for $40 per unit. Given this
information, what isthe average cost per unit?
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A) $30
B) $40
C) $50
D) $10
21)
During Year 2, Skip Company paid $24,900 for direct materials and $10,900 for
production workers' wages. Lease payments and utilities on the production facilities
amounted to
$15,900 while general, selling, and administrative expenses totaled $5,900.
Based on thisinformation, what is the total manufacturing cost?
A) $51,700
B) $26,800
C) $35,800
D) $57,600
22)
During Year 2, Skip Company paid $24,000 for direct materials and $10,000 for
production workers' wages. Lease payments and utilities on the production facilities
amounted to
$15,000 while general, selling, and administrative expenses totaled $5,000.
Based on thisinformation, what is the total manufacturing cost?
A) $49,000
B) $54,000
C) $34,000
D) $25,000
23)
During its first year of operations, Forrest Company paid $30,000 for direct materials and
$50,000 in wages for production workers. Lease payments, utility costs, and
depreciation on factory equipment totaled $15,000. General, selling, and
administrative expenses were $20,000.The average cost to produce one unit was
$2.50. How many units were produced during the period?
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A) 40,000
B) 46,000
C) 38,000
D) None of these.
24)
During its first year of operations, Forrest Company paid $14,040 for direct materials and
$49,200 in wages for production workers. Lease payments, utility costs, and
depreciation on factory equipment totaled $13,200. General, selling, and
administrative expenses were $19,200.The average cost to produce one unit was
$4.20. How many units were produced during the period?
A) 19,629
B) 18,200
C) 22,771
D) None of these.
25)
Why do accountants normally calculate cost per unit as an average?
A) Determining the exact cost of a product is virtually impossible.
B) Some manufacturing-related costs cannot be accurately traced to
specific units ofproduct.
C) Even when producing multiple units of the same product, normal
variations occur inthe amount of materials and labor used.
D) All of these are justifications for computing average unit costs.
26)
Which of the following costs isnot considered a period cost?
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A) Warehousing costs of raw materials
B) Depreciation of delivery vehicles
C) Salaries paid to company executives
D) Freight paid on a purchase of raw materials
27)
Select theincorrect statement regarding costs and expenses.
A) Some costs are initially recorded as expenses while others are initially recorded as
asset
s.
B) Expenses are incurred when assets are used to generate revenue.
C) Manufacturing-related costs are initially recorded as expenses.
D) Non-manufacturing costs should be expensed in the period in which they are incurred.
28)
Which of the following costs should be recorded as an expense?
A) Salary of administrative employee
B) Depreciation of manufacturing equipment
C) Insurance for the factory building
D) All of these are expenses.
29)
Which of the following costs shouldnot be recorded as an expense?
A) Insurance on factory building
B) Sales commissions
C) Product shipping costs
D) Product advertising
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30)
Which of the following transactions would cause net income for the period to decrease?
A) Paid $2,500 cash for raw material cost
B) Purchased $8,000 of merchandise inventory
C) Recorded $5,000 of depreciation on production equipment
D) Used $2,000 of office supplies
31)
Which of the following statements is true with regard to product costs
versus general,selling, and administrative costs?
A) Product costs associated with unsold units appear on the income statement
as generalexpenses.
B) General, selling, and administrative costs appear on the balance sheet.
C) Product costs associated with units sold appear on the income
statement as cost ofgoods sold.
D) None of these are true.
32)
Which of the following statements concerning product costs versus general,
selling, andadministrative costs isfalse?
A) Product costs incurred during the period will initially appear as
inventory on thebalance sheet.
B) General, selling, and administrative costs are always expensed when paid.
C) Product costs may be divided between the balance sheet and income statement.
D) General, selling, and administrative costs never appear as inventory on the balance
sheet.
33)
Buckhorn Company’s accounting records noted the following amounts for
depreciation.What amount of depreciation would be categorized as a product cost?
Depreciation on:
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Factory building
Elevators in administrative building
Furniture in CEO’s office
Forklifts in factory
Trucks to deliver product to customers
$65,500
$10,500
$5,500
$21,500
$9,500
A) $112,500
B) $96,500
C) $87,000
D) $65,500
34)
Buckhorn Company’s accounting records noted the following amounts for
depreciation.What amount of depreciation would be categorized as a product cost?
Depreciation on:
Factory building
Elevators in administrative building
Furniture in CEO’s office
Forklifts in factory
Trucks to deliver product to customers
$65,000
$10,000
$5,000
$21,000
$9,000
A) $65,000
B) $86,000
C) $95,000
D) $110,000
35)
Buckhorn Company’s accounting records noted the following amounts for
companypayroll costs. What amount of payroll would be categorized as a period
cost?
Payroll Costs:
Marketing director salary
Factory manager salary
Commissions paid to sales staff
Administrative personnel wages
Wages of production workers
$151,000
$86,000
$61,000
$51,000
$201,000
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A) $263,000
B) $288,000
C) $324,000
D) $550,000
36)
Buckhorn Company’s accounting records noted the following amounts for
companypayroll costs. What amount of payroll would be categorized as a period
cost?
Payroll Costs:
Marketing director salary
Factory manager salary
Commissions paid to sales staff
Administrative personnel wages
Wages of production workers
$150,000
$85,000
$60,000
$50,000
$200,000
A) $320,000
B) $285,000
C) $260,000
D) $545,000
37)
During Year 2, Skyland Company had sales of $4,280,000 and total product cost of
$1,480,000. Assuming the company manufactured 740,000 units and sold 400,000
units, what iscost of goods sold for Year 2?
A) $740,000
B) $1,480,000
C) $1,540,000
D) $800,000
38)
During Year 2, Skyland Company had sales of $4,000,000 and total product cost of
$1,500,000. Assuming the company manufactured 500,000 units and sold 200,000
units, what iscost of goods sold for Year 2?
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A) $500,000
B) $600,000
C) $1,500,000
D) $1,600,000
39)
During Year 2, Amos Company had sales of $996,000 and total product cost of
$836,000. Assuming the company manufactured 209,000 units and sold 139,000 units,
what is the total costof the ending inventory?
A) $249,000
B) $857,000
C) $139,000
D) $280,000
40)
During Year 2, Amos Company had sales of $600,000 and total product cost of
$400,000. Assuming the company manufactured 200,000 units and sold 150,000 units,
what is the total costof the ending inventory?
A) $100,000
B) $300,000
C) $150,000
D) $450,000
41)
Given the selected financial information for Storm Company, what is gross margin?
Sales
Net income
Ending inventory
Cost of goods sold
$1,300,000
$215,000
$315,000
$750,000
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A) $985,000
B) $770,000
C) $1,085,000
D) $550,000
42)
Given the selected financial information for Storm Company, what is gross margin?
Sales
Net income
Ending inventory
Cost of goods sold
$1,000,000
$200,000
$300,000
$600,000
A) $800,000
B) $400,000
C) $700,000
D) $500,000
43)
During its first year of operations, Silverman Company paid $8,065 for direct
materials and $9,600 for production workers' wages. Lease payments and utilities on
the production facilities amounted to $8,600 while general, selling, and
administrative expenses totaled $4,100.The company produced 5,150 units and sold
3,100 units at a price of $7.60 a unit.
What is Silverman's cost of goods sold for the year?
A) $26,265
B) $13,101
C) $15,810
D) $21,765
44)
During its first year of operations, Silverman Company paid $14,000 for direct
materials and $19,000 for production workers' wages. Lease payments and utilities on
the production facilities amounted to $17,000 while general, selling, and
administrative expenses totaled $8,000.The company produced 5,000 units and sold
3,000 units at a price of $15.00 a unit.
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A) $985,000
What is Silverman's cost of goods sold for the year?
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A) $50,000
B) $24,600
C) $30,000
D) $41,000
45)
During its first year of operations, Silverman Company paid $11,625 for direct
materials and $11,000 for production workers' wages. Lease payments and utilities on
the production facilities amounted to $10,000 while general, selling, and
administrative expenses totaled $3,500.The company produced 7,250 units and sold
4,500 units at a price of $7.00 a unit.
What is the amount of gross margin for the first year?
A) $12,375
B) $ 11,250
C) $8,875
D) $31,500
46)
During its first year of operations, Silverman Company paid $14,000 for direct
materials and $19,000 for production workers' wages. Lease payments and utilities on
the production facilities amounted to $17,000 while general, selling, and
administrative expenses totaled $8,000.The company produced 5,000 units and sold
3,000 units at a price of $15.00 a unit.
What is the amount of gross margin for the first year?
A) $15,000
B) $24,000
C) $20,000
D) $45,000
47)
During its first year of operations, Silverman Company paid $11,860 for direct
materialsand $10,900 for production workers' wages. Lease payments and utilities on
the production facilities amounted to $9,900 while general, selling, and
administrative expenses totaled $3,600.The company produced 7,100 units and sold
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A) $50,000
4,400 units at a price of $7.10 a unit.
What is the amount of finished goods inventory on the balance sheet at year-end?
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A) $12,420
B) $2,700
C) $6,210
D) $11,000
48)
During its first year of operations, Silverman Company paid $14,000 for direct
materials and $19,000 for production workers' wages. Lease payments and utilities on
the production facilities amounted to $17,000 while general, selling, and
administrative expenses totaled $8,000.The company produced 5,000 units and sold
3,000 units at a price of $15.00 a unit.
What is the amount of finished goods inventory on the balance sheet at year-end?
A) $10,000
B) $20,000
C) $4,000
D) $15,000
49)
During its first year of operations, Silverman Company paid $11,440 for direct
materialsand $9,900 for production workers' wages. Lease payments and utilities on
the production facilities amounted to $8,900 while general, selling, and
administrative expenses totaled $4,400.The company produced 5,600 units and sold
3,400 units at a price of $7.90 a unit.
What was Silverman's net income for the first year in operation?
A) $4,100
B) $22,460
C) $5,520
D) $17,960
50)
During its first year of operations, Silverman Company paid $14,000 for direct
materials and $19,000 for production workers' wages. Lease payments and utilities on
the production facilities amounted to $17,000 while general, selling, and
administrative expenses totaled $8,000.The company produced 5,000 units and sold
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A) $12,420
3,000 units at a price of $15.00 a unit.
What was Silverman's net income for the first year in operation?
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A) $7,000
B) $12,000
C) $28,000
D) $37,000
51)
Manufacturing costs thatcannot be traced to specific units of product in a
cost-effectivemanner include:
A) depreciation on production equipment.
B) direct material.
C) indirect labor.
D) both depreciation on production equipment and indirect labor.
52)
Celestin Manufacturing Company incurred $20,000 of depreciation on its
manufacturingequipment during its first year of operation. During this year the
company made 10,000 units ofproduct and sold 3,500 units of product. Based on this
information alone the company would show
A) $20,000 of depreciation expense on its income statement.
B) $7,000 of cost of goods sold expense on its income statement.
C) $20,000 of inventory on its balance sheet.
D) $7,000 of inventory on its balance sheet.
53)
Brock Company makes candy. During the most recent accounting period Brock paid
$6,000 for raw materials, $7,000 for labor, and $8,000 for overhead costs that were
incurred tomake candy. Brock started and completed 20,588 units of candy of
which 14,000 were sold.
Based on this information Brock would recognize which of the following amounts of
expense onits income statement?
Note: Do not round intermediate calculations.
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A) $7,000.
B) $21,000.
C) $14,280.
D) None of the above.
54)
Brock Company makes candy. During the most recent accounting period Brock paid
$7,500 for raw materials, $8,500 for labor, and $11,000 for overhead costs that were
incurred tomake candy. Brock started and completed 25,000 units of candy of which
17,000 were sold.
Based on this information the balance in the inventory account on Brock’s balance
sheet wouldbe
Note: Do not round intermediate calculations.
A) $8,640.
B) $8,000.
C) $27,000.
D) None of the above.
55)
Calgary Manufacturing company makes chairs and desks. The following
costs wereincurred in making its products during its first year of operation.
Chairs
Direct Materials
Direct Labor
$ 11,500
19,500
Desks
$ 13,500
15,500
Total
$ 25,000
35,000
Also the company incurred $29,750 of employee benefits cost. Since these
overhead costs aredriven by the use of labor they are allocated to the products
based on the direct labor dollars. Based on this information alone the total cost of
making chairs is.
Note: Do not round intermediate calculations.
A) $31,000.
B) $60,000.
C) $47,575.
D) None of the answers is correct.
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56)
What is the effect on the balance sheet of recording a $200 cash
purchase of rawmaterials?
A) Assets decrease by $200 and stockholders’ equity decreases by $200.
B) Assets and stockholders’ equity do not change.
C) Assets increase by $200 and stockholders’ equity increases by $200.
D) Assets increase by $200 and stockholders’ equity does not change.
57)
What is the effect on the balance sheet of making cash sales of inventory to
customers forprofit?
A) Assets and stockholders’ equity increase.
B) Assets and stockholders’ equity decrease.
C) Assets decrease and stockholders’ equity increases.
D) Assets increase and stockholders’ equity decreases.
58)
Which of the following types of labor costs will never flow through the
inventoryaccount?
A) Plant supervision
B) Sales commissions
C) Material handling
D) Assembly labor
59)
Which of the following isnot classified as manufacturing overhead?
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A) Product delivery costs
B) Salary of factory supervisor
C) Factory insurance
D) Production supplies
60)
Kirsten believes her company's overhead costs are driven (affected) by the
number of direct labor hours because the production process is very labor intensive.
During the period, thecompany produced 5,300 units of Product A requiring a total
of 830 labor hours and 2,800 unitsof Product B requiring a total of 230 labor hours.
What allocation rate should be used if the company incurs overhead costs of
$24,380?
A) $23.00 per labor hour
B) $3.01 per unit
C) $29.37 per labor hour for Product A and $106 per labor hour for Product B
D) None of these.
61)
Kirsten believes her company's overhead costs are driven (affected) by the
number of direct labor hours because the production process is very labor intensive.
During the period, the company produced 5,000 units of Product A requiring a total
of 1,600 labor hours and 2,500 units of Product B requiring a total of 400 labor hours.
What allocation rate should be used if thecompany incurs overhead costs of $20,000?
A) $10 per labor hour
B) $2.67 per unit
C) $12.50 per labor hour for Product A and $50 per labor hour for Product B
D) None of these
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62)
Anton believes his company's overhead costs are driven (affected) by the
number of machine hours because the production process is heavily automated.
During the period, the company produced 4,300 units of Product A requiring a total
of 460 machine hours and 3,300 units of Product B requiring a total of 115 machine
hours. What allocation rate should be used if the company incurs overhead costs of
$21,275?
A) $2.80 per unit
B) $2.80 per machine hour
C) $37.00 per unit
D) $37 per machine hour
63)
Anton believes his company's overhead costs are driven (affected) by the
number of machine hours because the production process is heavily automated.
During the period, the company produced 3,000 units of Product A requiring a total
of 100 machine hours and 2,000 units of Product B requiring a total of 25 machine
hours. What allocation rate should be used ifthe company incurs overhead costs of
$10,000?
A) $2 per unit
B) $2 per machine hour
C) $80 per unit
D) $80 per machine hour
64)
The following information relates to the operations of Cruz Manufacturing during the
current year:
Raw materials used
Direct labor wages
Sales salaries and
commissions
Depreciation on production equipment
Rent on manufacturing facilities
Packaging and shipping supplies
Sales revenue
Units produced and sold
Selling price per unit
$ 13,100
33,100
28,100
2,310
18,100
3,310
98,100
13,100
$ 14.00
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Based on this information, what is the company's cost of goods sold?
Note: Do not round intermediate calculations.
A) $49,510
B) $66,610
C) $69,920
D) $98,020
65)
The following information relates to the operations of Cruz Manufacturing during the
current year:
Raw materials used
Direct labor wages
Sales salaries and
commissions
Depreciation on production equipment
Rent on manufacturing facilities
Packaging and shipping supplies
Sales revenue
Units produced and sold
Selling price per unit
$ 20,000
60,000
50,000
4,000
30,000
6,000
190,000
10,000
$ 20.00
Based on this information, what is the company's cost of goods sold?
A) $86,000
B) $120,000
C) $114,000
D) $170,000
66)
The following information relates to Marshall Manufacturing's current accounting period:
Raw materials used
Direct labor wages
Sales salaries and
commissions
Depreciation on production equipment
Rent on manufacturing facilities
Administrative supplies and utilities
Sales revenue
Units produced
$ 16,600
32,600
24,600
2,960
3,960
4,600
101,000
3,600
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Units sold
3,600
Based on this information, what is the company's net income?
Note: Do not round your intermediate calculations.
A) $14,960
B) $18,640
C) $33,080
D) $15,680
67)
The following information relates to Marshall Manufacturing's current accounting period:
Raw materials used
Direct labor wages
Sales salaries and
commissions
Depreciation on production equipment
Rent on manufacturing facilities
Administrative supplies and utilities
Sales revenue
Units produced
Units sold
$ 34,000
66,000
50,000
6,000
4,000
10,000
210,000
10,000
10,000
Based on this information, what is the company's net income?
A) $40,000
B) $70,000
C) $30,000
D) $42,000
68)
Costs such as transportation-out, sales commissions, uncollectible accounts
receivable,and advertising costs are sometimes called:
A) upstream costs.
B) downstream costs.
C) direct costs.
D) indirect costs.
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69)
All of the following are downstream costs except:
A) packaging costs.
B) advertising.
C) research and development.
D) sales commissions.
70)
Select the incorrect statement regarding upstream and downstream costs.
A) Companies normally incur significant downstream costs.
B) To be profitable, companies must recover the total cost of developing,
producing, anddelivering products.
C) Pricing decisions must consider both upstream and downstream costs in
addition tomanufacturing costs.
D) Upstream and downstream costs are reported as product costs on
the incomestatement.
71)
Use the following information to determine net income in the financial
statements underGAAP:
Number of boats to be sold
Upstream costs
Direct materials per boat
Direct labor per boat
Overhead per boat
Downstream costs
690
$ 5,950,000
$ 69,000
$ 49,000
$ 39,000
$ 2,950,000
Assume the company wants to sell each boat for 25% more than the cost to produce the boat.
A) $5,950,000
B) $8,900,000
C) $27,082,500
D) $18,182,500
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72)
Select theincorrect statement regarding service companies.
A) Because service companies do not carry inventory, it is impossible to
determineproduct costs.
B) Because the products of service companies are consumed immediately,
there is nofinished goods inventory on their balance sheets.
C) Managers of service companies are expected to control costs, improve
quality, andincrease productivity just like managers of manufacturing companies.
D) Material, labor, and overhead costs of service companies are treated as period costs.
73)
Identify thefalse statement regarding how product costs in a
manufacturing companydiffer from product costs in a service or merchandising
company.
A) Both manufacturing companies and service companies incur costs for supplies.
B) Manufacturing companies accumulate product costs in inventory
accounts, whileservice companies do not.
C) Products of service companies such as restaurants are consumed immediately.
D) Most labor costs for merchandising companies are treated as product costs.
74)
Which cost does GAAP allow to be recorded in the inventory account?
A) Downstream
B) Midstream
C) Upstream
D) All of these costs are included in the inventory account.
75)
Costs associated with holding inventory often include:
30
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