SE_Ch02 - SAMPLE EXAM: CHAPTER 2 *SEE SOLUTION ON THE LAST...

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SAMPLE EXAM: CHAPTER 2 ***SEE SOLUTION ON THE LAST PAGE*** USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT 2 QUESTIONS: Allen Distributors makes individually wrapped frozen ice cream bars which it distributes to convenience stores. Indicate whether the following costs are (a) a direct cost or (b) an indirect cost to the units produced: 1. Commercial Freezers used to store ice cream bars before delivery to customers 2. Material used for wrappers 3. Product costs become an expense at the time the a. costs are incurred. b. costs can be identified with inventory. c. units of inventory are completed. d. units of inventory are sold. 4. Which of the following statements concerning manufacturing overhead is false? a. Manufacturing overhead costs include all costs incurred by the organization except direct materials and direct labor. b. Overhead costs are a product cost. c. As motorized production techniques are substituted for direct labor, the importance of overhead costs to the organization increases. d. Rent on the factory is a manufacturing overhead cost.
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SE_Ch02 - SAMPLE EXAM: CHAPTER 2 *SEE SOLUTION ON THE LAST...

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