Where are product costs reported in an income statement? O As cost of goods sold O As selling expenses O As cost of general expenses O As administrative expenses (33) Which item is absent in a merchandising company? O Administrative expense O Work-in-process inventory O Gross profit O Cost of goods sold (34) Which label is given to materials that are minor in amount and difficult to trace to a specific product in a manufacturing business? Administrative materials O Direct materials O Work-in-process materials O Indirect materials (35) What are the three different types of manufacturing costs? O Product, period, and variable O Budget, actual, and forecasted O Materials, labor, and overhead O Selling, general, and administrative (44) What is the first step in implementing an ABC overhead system? O Calculate the activity rates associated with each cost pool O Identify all the cost drivers associated with overhead costs O Determine exactly what activities cause overhead costs O Compute the amount of cost in each cost pool (46) Why is an activity-based costing (ABC) system not used by all companies? O ABC is not useful when the production process varies for different products. O An ABC system is based only on direct labor hours. O Implementing an ABC system requires very little analysis of the factors that create overhead costs. O It takes more time and expense to create and administer an ABC system.
