Explain why the answer is selected:
Problem 1: The three sections of a statement of cost of goods manufactured include:
a. variable expenses, contribution margin, fixed expenses.
b. direct costs, indirect costs, operating profit.
c. sales revenue, gross profit, selling and administrative expenses.
d. raw material, direct labor, manufacturing overhead.
Problem 2: In order to achieve higher quality cost information from the assignment of overhead costs to products manufactured, the use of a predetermined overhead rate is being replaced by:
a. activity-based costing
b. absorption costing
c. job order costing
d. process costing
Problem 3: An example of a cost that is likely to have a direct relationship with products being manufactured:
a. production labor costs.
b. sales force salaries.
c. depreciation of production equipment.
d. salaries of production supervisors