In Determining the Cost of Goods Manufactured and Thus the Cost

question 67

Multiple Choice

In determining the cost of goods manufactured and thus the cost of the ending inventory:

• A)A production supervisor's salary must be treated as a period cost (not added to production costs and inventory) because the salary is paid regardless of the amount produced.
• B)The personnel department participates in hiring production workers, and therefore a portion of its costs must be allocated to production.
• C)Property taxes on the factory building are treated as period costs because the same taxes are due regardless of the volume of production.
• D)Only the costs of direct materials and direct labor must be capitalized.
• E)None of the above is correct.

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Definitions:

Ideas

Mental concepts or thoughts that can lead to creativity or planning.

Transactive Memory

A psychological concept that explains how groups collectively store, encode, and retrieve knowledge more efficiently than individuals.

Groupthink

A phenomenon where decisions are made or solutions are agreed upon by a group, prioritizing unanimity and cohesion over critical evaluation of alternatives.

Brainstorming

A form of creative thinking in groups, using a procedure in which all group members are encouraged to generate as many ideas as possible while interacting and stimulating each other