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Managerial Accounting Eric Noreen 5th Edition- Test Bank
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Managerial Accounting for Managers, 5e (Noreen) Chapter 1 Managerial Accounting and Cost Concepts 1) A factory supervisor's salary would be classified as an indirect cost with respect to a unit of product. Answer: TRUE Difficulty: 2 Medium Topic: Cost Classifications for Assigning Costs to Cost...

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  • September 13, 2023
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,Managerial Accounting for Managers, 5e (Noreen)
Chapter 1 Managerial Accounting and Cost Concepts

1) A factory supervisor's salary would be classified as an indirect cost with respect to a unit of
product.

Answer: TRUE
Difficulty: 2 Medium
Topic: Cost Classifications for Assigning Costs to Cost Objects
Learning Objective: 01-01 Understand cost classifications used for assigning costs to cost
objects: direct costs and indirect costs.
Bloom's: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement

2) A direct cost is a cost that can be easily traced to the particular cost object under
consideration.

Answer: TRUE
Difficulty: 1 Easy
Topic: Cost Classifications for Assigning Costs to Cost Objects
Learning Objective: 01-01 Understand cost classifications used for assigning costs to cost
objects: direct costs and indirect costs.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement

3) A cost can be direct or indirect. The classification can change if the cost object changes.

Answer: TRUE
Difficulty: 2 Medium
Topic: Cost Classifications for Assigning Costs to Cost Objects
Learning Objective: 01-01 Understand cost classifications used for assigning costs to cost
objects: direct costs and indirect costs.
Bloom's: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement




1
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.

,4) Wages paid to production supervisors would be classified as manufacturing overhead.

Answer: TRUE
Difficulty: 1 Easy
Topic: Cost Classifications for Manufacturing Companies
Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing
cost categories.
Bloom's: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement

5) Selling costs are indirect costs.

Answer: FALSE
Difficulty: 2 Medium
Topic: Cost Classifications for Manufacturing Companies
Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing
cost categories.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement

6) The sum of all manufacturing costs except for direct materials and direct labor is called
manufacturing overhead.

Answer: TRUE
Difficulty: 2 Medium
Topic: Cost Classifications for Manufacturing Companies
Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing
cost categories.
Bloom's: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement

7) The three cost elements ordinarily included in product costs are direct materials, direct labor,
and manufacturing overhead.

Answer: TRUE
Difficulty: 1 Easy
Topic: Cost Classifications for Manufacturing Companies
Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing
cost categories.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement


2
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.

, 8) Administrative costs are indirect costs.

Answer: FALSE
Difficulty: 2 Medium
Topic: Cost Classifications for Manufacturing Companies
Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing
cost categories.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement

9) Depreciation is always considered a period cost for external financial reporting purposes in a
manufacturing company.

Answer: FALSE
Difficulty: 2 Medium
Topic: Cost Classifications for Manufacturing Companies; Cost Classifications for Preparing
Financial Statements
Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing
cost categories.; 01-03 Understand cost classifications used to prepare financial statements:
product costs and period costs.
Bloom's: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement

10) Opportunity costs at a manufacturing company are not part of manufacturing overhead.

Answer: TRUE
Difficulty: 3 Hard
Topic: Cost Classifications for Manufacturing Companies; Cost Classifications for Decision
Making
Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing
cost categories.; 01-05 Understand cost classifications used in making decisions: differential
costs, sunk costs, and opportunity costs.
Bloom's: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement




3
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.

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