Chapter 01
Managerial Accounting and Cost Concepts
True / False Questions
1. Selling costs can be either direct or indirect costs.
True False
2. A direct cost is a cost that cannot be easily traced to the particular cost object under
consideration.
True False
Introduction To Managerial Acco...
1. Selling costs can be either direct or indirect costs.
True False
2. A direct cost is a cost that cannot be easily traced to the particular cost object under
consideration.
True False
1-3
, Introduction To Managerial Accounting 7th Edition Test Bank by Peter Brewer, Ray
Garrison, Eric Noreen
3. Property taxes and insurance premiums paid on a factory building are examples of period costs.
True False
4. Conversion cost equals product cost less direct labor cost.
True False
5. Thread that is used in the production of mattresses is an indirect material that is therefore
classified as manufacturing overhead.
True False
6. Direct labor is a part of prime cost, but not conversion cost.
True False
7. Conversion cost is the sum of direct labor cost and direct materials cost.
True False
8. Direct material costs are generally fixed costs.
True False
9. Product costs are recorded as expenses in the period in which the related products are sold.
True False
10. Depreciation on manufacturing equipment is a product cost.
True False
11. Manufacturing salaries and wages incurred in the factory are period costs.
True False
1-4
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