Which of the following is not a product cost under full-absorption costing?

A. Rent for the warehouse used to store direct materials.
B. Salaries paid to the top management in the company.
C. Vacation pay accrued for the production workers.
D. Direct materials used in the current period.


Answer: B

Business

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Answer the following statement true (T) or false (F)

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During October, Department A started 320,000 units of product in a particular manufacturing process. The beginning work in process inventory was 50,000 units, and the ending inventory was 30,000 units. Direct materials are introduced at the start of processing, and beginning and ending inventories are considered to be 50 percent complete with respect to conversion costs. Department A uses the

FIFO costing method. The number of units started and completed during October was a. 350,000. b. 360,000. c. 290,000. d. 320,000.

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Answer the following statement true (T) or false (F)

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Which of the following statements best describes the continuity of interest principle as it applies to a tax-deferred acquisition?

A. Continuity of interest requires each shareholder to receive at least 80 percent of the consideration received in equity of the acquirer. B. Continuity of interest requires shareholders in the aggregate to receive at least 80 percent of the consideration received in equity of the acquirer. C. Continuity of interest requires each shareholder to receive at least 40 percent of the consideration received in equity of the acquirer. D. Continuity of interest requires shareholders in the aggregate to receive at least 40 percent of the consideration received in equity of the acquirer.

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