Multiple Choice Answers

The inventory data for an item for November are:

Nov. 1 Inventory         20 units at $20
4          Sold     10 units
10        Purchased       30 units at $21
17        Sold     20 units
30        Purchased       10 units at $22
Using the perpetual system, costing by the first-in, first-out method, what is the cost of the merchandise inventory of 30 units on November 30?
a. $640
b. $610
c. $620
d. $630
For an automotive repair shop, the wages of mechanics would be classified as direct labor cost.

True
False
Based on the following data, what is the acid-test ratio, rounded to one decimal point?

Accounts payable        $32,000
Account receivable      64,000
Accrued liabilities        7,000
Cash    20,000
Intangible assets         40,000
Inventory         72,000
Long-term investments           100,000
LOng-term liabilities    75,000
Marketable securities 35,000
Notes payable (short-term)     20,000
Property, plant, and equipment           625,000
Prepaid expenses       2,000

a. 3.2
b. 3.3
c. 2.0
d. 1.4

The ratio of the sum of cash, receivables, and marketable securities to current liabilities is called the:

a. price-earnings ratio
b. earnings ratio
c. acid-test ratio
d. current ratio

The cost of a manufactured product generally consists of direct materials cost, direct labor cost, and factory overhead cost.

True
False