Chapter 7 Review Questions

Chapter 7 Review Questions - Chapter 7 Review Questions 1....

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Chapter 7 Review Questions
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1. Which of the following costs at a sofa manufacturing company would be treated as a period cost under the variable costing method? A. the cost of glue used to assemble the wood frame of each sofa produced B. depreciation on sales vehicles C. the salary of a factory manager D. both B and C above 2. Which of the following costs at a manufacturing company would be treated as a product cost under the absorption costing method? A. sales commissions B. fire insurance cost on factory building C. advertising costs D. All of these 3. Which of the following statements is true? A. Expenses are not usually separated into variable and fixed elements in externally reported income statements. B. Even if there is no change in units sold, selling price, or cost structure, a company can increase its absorption costing net operating income from one year to the next just by producing more units. C. When finished goods inventory decreases during a period, a manufacturing
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Chapter 7 Review Questions - Chapter 7 Review Questions 1....

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