Cost of Goods Sold MCQs (11-20)

11. Direct Labor is an element of?

(a) Prime cost

(b) Conversion cost

(c) Total production cost

(d) All of the given options

Correct! Wrong!

12. Total Manufacturing costs are also known as product costs. Which of the following best describes those costs which are considered to be manufacturing costs?

(a) Direct materials, direct labor, and factory overhead

(b) Direct materials and direct labor only

(c) Direct materials, direct labor, factory overhead, and administrative overhead

(d) Direct labor and factory overhead

Correct! Wrong!

13. On a multiple-step income statement, the excess of net sales over the cost of merchandise sold is called?

(a) Cost of Goods Sold

(b) Operating income

(c) Net income

(d) Gross profit

Correct! Wrong!

14. Which of the following cost is used in the calculation of cost per unit?

(a) Total production cost

(b) Cost of goods available for sales

(c) Cost of goods manufactured

(d) Cost of goods Sold

Correct! Wrong!

15. Direct expenses are such expenses?

(a) Which are directly paid to the employee

(b) Which are directly associated with the purchase

(c) Which are directly associated with the sale

(d) All of above

Correct! Wrong!

16. Factory overhead includes all manufacturing costs except direct material and direct labor. Which of the following items would not be considered to be a factory overhead cost?

(a) Repainting the corporate office building

(b) Indirect labor

(c) Repair and maintenance expenditures on multiple factory machinery

(d) Small expenditures pertaining to items like rags, screws, etc., used in the production process

Correct! Wrong!

17. Which of the following is correct?

(a) Units sold= Opening finished goods units + Units produced – Closing finished goods units

(b) Units Sold = Units produced + Closing finished goods units - Opening finished goods units

(c) Units sold = Sales + Average units of finished goods inventory

(d) Units sold = Sales - Average units of finished goods inventory

Correct! Wrong!

18. Direct expenses are such expenses?

(a) Which are directly paid to employee

(b) Which are directly associated with sale

(c) Which are directly associated with purchase

(d) None of above

Correct! Wrong!

19. Wages paid to laborers working in the manufacturing department is treated as an expense of?

(a) Cost of goods sold

(b) Administrative expenses

(c) Selling expenses

(d) Marketing expenses

Correct! Wrong!

20. Which of the following expressions is incorrect?

(a) Gross profit – operating expenses = operating income

(b) Sales – cost of goods sold – operating expenses = operating income

(c) Operating income + operating expenses = gross profit

(d) Operating expenses – cost of goods sold = gross profit

Correct! Wrong!

11. Direct Labor is an element of?

12. Total Manufacturing costs are also known as product costs. Which of the following best describes those costs which are considered to be manufacturing costs?

13. On a multiple-step income statement, the excess of net sales over the cost of merchandise sold is called?

14. Which of the following cost is used in the calculation of cost per unit?

15. Direct expenses are such expenses?

16. Factory overhead includes all manufacturing costs except direct material and direct labor. Which of the following items would not be considered to be a factory overhead cost?

17. Which of the following is correct?

18. Direct expenses are such expenses?

19. Wages paid to laborers working in the manufacturing department is treated as an expense of?

20. Which of the following expressions is incorrect?

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