Choose the best answer for each of the following questions.

1.			Which one of the following costs would not be considered an indirect cost of serving a particular customer at a Pizza Hut franchise?
			A)	The salary of the franchise's manager.
			B)	The cost of the tables and chairs used to furnish the restaurant.
			C)	The cost of the dough used to make the pizza that is ordered.
			D)	The cost of lighting and heating the restaurant.
2.			The wages of materials handling personnel in a factory would usually be considered:
			A)	Indirect labor: No; Manufacturing overhead: Yes
			B)	Indirect labor: Yes; Manufacturing overhead: No
			C)	Indirect labor: Yes; Manufacturing overhead: Yes
			D)	Indirect labor: No; Manufacturing overhead: No
3.			The salary of the vice president of finance would be considered a(n):
			A)	manufacturing cost.
			B)	product cost.
			C)	administrative cost.
			D)	selling expense.
4.			If the cost of goods manufactured is greater than the cost of goods sold, then:
			A)	work in process inventory has decreased during the period.
			B)	finished goods inventory has increased during the period.
			C)	total manufacturing costs must be greater than cost of goods manufactured.
			D)	finished goods inventory has decreased during the period.
5.			The following data (in thousands of dollars) have been taken from the accounting records of Palos Corporation for the just completed year. Administrative expenses $ 600 Direct labor 800 Finished goods inventory, beginning 480 Finished goods inventory, ending 640 Manufacturing overhead 920 Purchases of raw materials 480 Raw materials inventory, beginning 160 Raw materials inventory, ending 280 Sales 3,960 Selling expenses 560 Work in process inventory, beginning 280 Work in process inventory, ending 200 The cost of the raw materials used in production during the year (in thousands of dollars) was:
			A)	$360.
			B)	$600.
			C)	$640.
			D)	$760.
6.			The following data (in thousands of dollars) have been taken from the accounting records of Palos Corporation for the just completed year. Administrative expenses $ 600 Direct labor 800 Finished goods inventory, beginning 480 Finished goods inventory, ending 640 Manufacturing overhead 920 Purchases of raw materials 480 Raw materials inventory, beginning 160 Raw materials inventory, ending 280 Sales 3,960 Selling expenses 560 Work in process inventory, beginning 280 Work in process inventory, ending 200 The cost of goods manufactured (finished) for the year (in thousands of dollars) was:
			A)	$2,000.
			B)	$2,080.
			C)	$2,160.
			D)	$2,360.
7.			The following data (in thousands of dollars) have been taken from the accounting records of Palos Corporation for the just completed year. Administrative expenses $ 600 Direct labor 800 Finished goods inventory, beginning 480 Finished goods inventory, ending 640 Manufacturing overhead 920 Purchases of raw materials 480 Raw materials inventory, beginning 160 Raw materials inventory, ending 280 Sales 3,960 Selling expenses 560 Work in process inventory, beginning 280 Work in process inventory, ending 200 The cost of goods sold for the year (in thousands of dollars) was:
			A)	$2,000.
			B)	$2,320.
			C)	$2,640.
			D)	$2,800.
8.			The following data (in thousands of dollars) have been taken from the accounting records of Palos Corporation for the just completed year. Administrative expenses $ 600 Direct labor 800 Finished goods inventory, beginning 480 Finished goods inventory, ending 640 Manufacturing overhead 920 Purchases of raw materials 480 Raw materials inventory, beginning 160 Raw materials inventory, ending 280 Sales 3,960 Selling expenses 560 Work in process inventory, beginning 280 Work in process inventory, ending 200 The net income for the year (in thousands of dollars) was:
			A)	$600.
			B)	$800.
			C)	$1,000.
			D)	$1,960.
9.			Within the relevant range:
			A)	both total variable costs and total fixed costs will remain constant.
			B)	both total variable costs and total fixed costs fluctuate.
			C)	fixed costs per unit will remain constant and variable costs per unit will fluctuate.
			D)	variable costs per unit will remain constant and fixed costs per unit will fluctuate.
10.			An opportunity cost is:
			A)	the difference between the total cost of one alternative and the total cost of another alternative.
			B)	the benefit forgone when one alternative is selected rather than another.
			C)	a cost that is saved by not adopting a given alternative.
			D)	a cost that continues to be incurred even when there is no activity.