Which of the following is not included in conversion costs?
a. Indirect labor
b. Direct labor
c. Direct materials
d. Overhead
C
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Over the past several years General Motors (GM), like other auto manufacturers, has introduced many new models of sport utility vehicles (SUVs) in all its major divisions. This proliferation of SUVs and an increase in gasoline prices have caused sales to level off. In response, GM offered rebates of up to $5,000 or no-interest financing on selected models of SUVs. The largest rebates went to current owners of GM vehicles, so that they would replace their current vehicles with a GM model instead of switching to another brand. The rebates have been heavily advertised on national television. Profit margins per vehicle have shrunk as a result of these costly promotions. In which stage of the product life cycle is GM currently operating?
A. market growth B. sales decline C. market introduction D. market establishment E. market maturity
On January 1, 2016, Mark Company leased equipment by signing a five-year lease that required five payments of $85,000 due on December 31 of each year. The equipment remains the property of the lessor at the end of the lease, and Mark does not guarantee any residual value. Using a rate of 11%, Mark capitalized the lease on January 1, 2016, in the amount of $314,152. What is the amount of the lease
obligation on December 31, 2017? A) $263,709 B) $207,717 C) $279,595 D) $225,350
If category sales are fixed and marketing managers are interested in profit margins rather than market share, companies are better off:
A) having low level of expenditure. B) increasing consumer-oriented promotions. C) increasing advertising. D) increasing trade promotions.
When using backflush costing, product costs are first accumulated in the __________ account
A) Cost of Goods Sold B) Work in Process Inventory C) Conversion Costs D) Finished Goods Inventory