In Determining the Cost of Goods Manufactured and Thus the Cost

question 8

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 these is correct.

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Definitions:

Proper Notice

A legally defined announcement or communication stipulated by law or agreement that is required to be made under specific circumstances.

Damages

Monetary compensation awarded to a party in a lawsuit for loss or injury suffered due to another party's actions or breach of contract.

Reasonable Notice

The sufficient and fair amount of time one party must give another to prepare for or respond to an action, often legally defined in various contexts.

Termination

The act of ending or concluding an agreement, contract, or employment relationship.