Multiple Choice Answers

Conversion cost is the combination of direct materials cost and factory overhead cost.

True
False

Based on the following data, what is the amount of quick assets?

Account payable $32,000
Accoutns 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. $161,000
b. $193,000
c. $119,000
d. $55,000

If the cost of employee wages is not a significant portion of the total product cost, the wages are classified as direct materials cost.

True
False

A 90-day, 12% note for $10,000 dated May 1 is received from a customer on account. The maturity value of the note is:

a. $10,000
b. $10,300
c. $450
d. $9,550

For which of the following businesses would the job order cost system be appropriate?

a. Meat processor
b. Automobile manufacturer
c. Oil refinery
d. Construction contractor