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HW 3 ANSWERS - Universidad Iberoamericana UNIBE 1 A product...

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Universidad Iberoamericana UNIBE 1. A product cost and an inventoriable cost are the same cost a. True. b. False. An inventoriable cost is another name for a product cost . Inventoriable costs are stored as the cost of inventory until the goods are sold. The purchase of the asset 'inventory' is a cost, that doesn't become an expense until the inventory is sold or consumed. 2. Operating expenses are treated as product costs a. True. b. False. Operating expenses generally include selling and administrative expenses. They are treated as period costs and are recognized as an expense during the time period in which they are incurred. 3. Before material is entered into the production process, it is called raw material a. True. b. False. 4. The following data were collected from the records of the shipping department of a company: Month Units Shipped Cost of Shipping Supplies 1 7,000 $35,000 2 5,000 25,000
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3 3,000 14,900 4 13,000 65,000 5 11,000 55,200 6 10,000 50,000 7 15,000 74,900 The cost of shipping supplies is most likely to be a a. Variable cost. b. Fixed cost. c. Step cost. d. Semi-fixed cost.
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