1.Depreciation is always considered a period cost for external financial reporti
ID: 2334742 • Letter: 1
Question
1.Depreciation is always considered a period cost for external financial reporting purposes in a manufacturing company. T/F
5.Which of the following production costs, if expressed on a per unit basis, would be most likely to change significantly as the production level varies?
a.Variable costs.
b.Direct materials.
c.Direct labor.
d.Fixed manufacturing overhead.
6.Overapplied manufacturing overhead would result if:
a.manufacturing overhead costs incurred were less than estimated manufacturing overhead costs.
b.manufacturing overhead costs incurred were less than manufacturing overhead costs charged to production.
c.manufacturing overhead costs incurred were greater than manufacturing overhead costs charged to production.
d.the plant was operated at less than normal capacity.
10.The costs attached to products that have not been sold are included in ending inventory on the balance sheet. T/F
Explanation / Answer
1 TRUE Depreciation is a period cost as it is charged on yearly basis. 5 Correct answer is: d. Fixed manufacturing overhead Fixed cost are fixed irrelevant of output generated and every time production changes fixed cost per unit will fluctuate. 6 Correct answer is: b. Manufacturing overhead cost incurred were less than manufacturing overhead charge to production. Overapplied manufacturing overheads means in actual less overheads incurred but more overheads alredy charhed to production 10 TRUE Ending inventory consist of total inventory a company still held at the end of the period. Goods not sold yet are the part of ending Inventory
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