1. An unexpired cost appears on the balance sheet and expired cost appears on the income statement.
True or False
2. Direct labor cost includes not only the basic compensation but also bonuses, holiday and vacation pay.
True or False
3. Which of the following statements are True
a. In computing the cost of an automobile, the cost of steel and paint would be considered to be direct material.
b. In computing the cost of an automobile, the cost of small items such as glue and screws are classified as indirect material even though they are physically attached to the automobile.
c. A cost can be either direct or indirect depending on the cost object specification.
d. All of the above statements are true.
4. Which of the following statements is False?
a. If the relevant range changes, the fixed cost will change.
b. As the production increases the fixed cost per unit decreases.
c. As production increases, the variable cost per unit remains constant.
d. As production decreases, the fixed cost per unit decreases.
5. Which of the following statements is True?
a. When the product is completed and transferred to finished goods, the WIP account is debited.
b. When the product is sold on credit, two accounts are debited. One of those is accounts receivable and th other is finished goods.
c. When an item is sold for cash, two accounts are credited. One of them is sales and the other is COGS.
d. None of the above statements is true.