Multiple Choice Answers

If paid-in capital in excess of par–preferred stock is $80,000, preferred stock is $500,000, paid-in capital in excess of par–common stock is $50,000, common stock is $1,000,000, and retained earnings is $230,000, the total stockholders’ equity is $1,860,000.

True
False

Most employers are required to withhold from employees which of the following employment taxes?

a. only FICA tax
b. FICA tax, state and federal unemployment compensation tax
c. only state unemployment compensation tax
d. only federal unemployment compensation tax

What term is used to refer to the cost of changing direct materials into a finished manufactured product?

a. Factory overhead cost
b. Period cost
c. Conversion cost
d. Direct labor cost
A machine with a useful life of 8 years and a residual value of $4,000 was purchased for $27,000. What is annual depreciation under the straight-line method?

a. $3,375
b. $6,750
c. $2,875
d. $5,750

Which of the following is an example of direct materials cost for an automobile manufacturer?

a. Cost of oil lubricants for factory machinery
b. Cost of wages of assembly worker
c. Salary of production supervisor
d. Cost of interior upholstery