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Unformatted text preview: ACCOUNTING 203 Chapter 1 Practice Test True and False Questions 1. The three costs of elements ordinarily included in the inventoriable cost of a manufactured product are direct materials, direct labor, and marketing costs. 2. Depreciation on manufacturing equipment is a period cost. 3. Salaries and wages incurred in the factory would be product costs. 4. The cost of goods manufactured is included in the cost of goods available for sale in a manufacturing company. 5. Like product costs, period costs are not necessarily treated as expenses in the period which they occur. Multiple Choice Questions 6. Which of the following would most likely be included as part of manufacturing overhead in the production of a wooden table? A) The amount paid to the individual who stains the table. B) The commission paid to the salesperson who sold the table. C) The cost of the glue used in the table. D) The cost of the wood used in the table. 7. In a manufacturing company, direct labor costs combined with direct materials costs are known as: A) period costs. B) conversion costs. C) prime costs. D) opportunity costs. 8. Which of the following combinations of costs make up conversion cost? A) Direct materials cost and manufacturing overhead cost. B) Direct labor cost and manufacturing overhead cost....
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