(WIP) ACC 350 Exam 1 Study Material
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P<br />
. 7<br />
per<br />
-<br />
3<br />
solutions<br />
Ch. 2 Review Problem Solutions<br />
1. FALSE<br />
2. TRUE<br />
3. TRUE<br />
4. FALSE<br />
5. FALSE<br />
6. FALSE<br />
7. TRUE<br />
8. TRUE<br />
9. C<br />
10. B<br />
11. D<br />
12. B<br />
13. $32,000<br />
TRUE / FALSE QUESTIONS<br />
1. Product costs become expenses in the period they are purchased.<br />
FALSE –product costs become expenses in the period they are SOLD<br />
2. Cost of goods sold does not include the costs of selling merchandise.<br />
TRUE – selling costs are nonmanufacturing or period costs and are not included in COGS<br />
3. Factory heating and air conditioning should be considered a product cost in a manufacturing<br />
operation.<br />
TRUE –costs related to the plant or factory are manufacturing costs. Factory heating and air<br />
conditioning would be considered MOH (which is a product cost).<br />
4. Depreciation of office equipment is a manufacturing overhead cost at Dell Computer, a large<br />
manufacturer of personal computers.<br />
FALSE –costs related to the office are considered nonmanufacturing costs<br />
5. Overtime premium costs should theoretically be considered part of direct labor cost.<br />
FALSE – overtime premium costs are considered part of MOH
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