Which of the Following Is Not True About an Auto

question 124

Multiple Choice

Which of the following is not true about an auto manufacturer's inventory?

• A)Tires,batteries,glass,paint,headlamp bulbs,and electric wiring would be included in raw materials inventory.
• B)Incomplete cars that are still being processed would be included in work-in-process inventory.
• C)Finished cars ready to be shipped to dealers would be included in finished goods inventory.
• D)Cars that have been sold to dealers would be included in finished goods inventory.

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Definitions:

Single Plantwide Factory Overhead Rate

A single rate used to allocate factory overhead costs to products, calculated by dividing total overhead costs by a base, usually total direct labor hours or machine hours.

Direct Labor Hours

The total hours worked by employees that can be directly associated with the production of goods or services.

Single Plantwide Overhead Rate

A cost allocation method that applies the same overhead rate to all products, regardless of the department where they were produced or the amount of overhead they actually incurred.

Machine Hours

A metric used to allocate manufacturing overhead costs to individual products based on the number of hours the machines are run to produce them.