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Test Bank for Managerial Accounting, 18th
Edition by Ray Garrison NEWEST EDITION
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CORRECT ANSWERS ARE LOCATED IN THE 2ND HALF OF THIS DOC.
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MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
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answers the question. ki ki ki
1) Which of the following statements are true?
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1. A factory supervisor's salary would be classified as an indirect cost with respect to a
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unit
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of product.
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2. A direct cost is a cost that can be easily traced to the particular cost object under
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consideration. ki
3. A cost can be direct or indirect. The classification can change if the cost object changes.
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A) Only statement I is true.
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B) Statements I and II are true.
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C) All of the statements are true.
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D) None of the statements are true.
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2) Which of the following statements are true?
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1. Wages paid to production supervisors would be classified as manufacturing overhead.
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2. Indirect costs, such as manufacturing overhead, are variable costs.
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3. Selling costs are indirect costs.
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4. Administrative costs are indirect costs.
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A) Only statement I is true.
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B) Statements I and III are true.
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C) All statements are true.
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D) None of the statements are true.
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3) Which of the following statements are true?
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1. The sum of all manufacturing costs except for direct materials and direct labor is called
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manufacturing overhead. ki ki
2. The three cost elements ordinarily included in product costs are direct materials, direct
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labor, and manufacturing overhead.
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A) Only statement I is true.
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B) Only statement II is true.
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C) Both of the statements are true.
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D) Neither of the statements are true.
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ACCESS Test Bank for Managerial Accounting 18th Edition Garrison
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Managerial Accounting Edition 18 by Garrison ki ki ki ki ki ki
Version 1 ki ki
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4) Which of the following statements are true?
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1. Depreciation is always considered a period cost for external financial reporting
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purposes
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in a manufacturing company.
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2. Depreciation on equipment a company uses in its selling and administrative activities
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would be classified as a period cost.
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A) Only statement I is true.
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B) Only statement II is true.
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C) Both of the statements are true.
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D) Neither of the statements are true.
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5) Which of the following statements are true?
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1. Conversion cost is the sum of direct labor cost and manufacturing overhead cost.
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2. Conversion cost is the same thing as manufacturing overhead.
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3. Conversion cost equals product cost less direct materials cost.
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A) Only statement I is true.
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B) Statements I and III are true.
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C) All statements are true.
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D) None of the statements are true.
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6) Which of the following statements are true?
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1. In a manufacturing company, all costs are period costs.
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2. Selling and administrative expenses are period costs under generally accepted
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accounting
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principles. ki
3. The cost of shipping parts from a supplier is considered a period cost.
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A) Only statement I is true.
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B) Only statement II is true.
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C) Statements I and II are true.
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D) Statements I and III are true.
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7) Which of the following statements are true?
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1. Advertising is not a considered a product cost even if it promotes a specific product.
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2. Product costs are also known as inventoriable costs.
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3. Prime cost is the sum of direct materials cost and direct labor cost.
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4. Prime cost equals manufacturing overhead cost.
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A) Only statement I is true.
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B) Both statements I and IV are true.
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C) Statements I, II, and III are true.
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D) None of the statements are true.
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ki
ACCESS Test Bank for Managerial Accounting 18th Edition Garrison
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nursytestbank.store
Managerial Accounting Edition 18 by Garrison ki ki ki ki ki ki
, Version 1 ki ki
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8) Which of the following statements are true?
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1. If the activity level increases, then one would expect the fixed cost per unit to increase
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as
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well. ki
2. A fixed cost is a cost whose cost per unit varies as the activity level rises and falls.
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3. A decrease in production will ordinarily result in a decrease in fixed production costs
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per
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unit. ki
A) Only statement II is true.
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B) Only statement III is true.
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C) Statements I and II are true.
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D) Statements I and III are true.
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9) Which of the following statements are true?
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1. Cost behavior is considered curvilinear whenever a straight line is a reasonable
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approximation for the relation between cost and activity. ki ki ki ki ki ki ki ki
2. As activity decreases within the relevant range, fixed costs remain constant on a per
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unit
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basis. ki
3. In account analysis, an account is classified as either variable or fixed based on an
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analyst’s prior knowledge of how the cost in the account behaves.
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A) Only statement I is true.
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B) Only statement II is true.
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C) Only statement III is true.
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D) All statements are true.
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10) Which of the following statements are true?
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1. The variable cost per unit depends on how many units are produced.
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2. A step-variable cost is a cost that is obtained in large chunks and that increases or
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decreases only in response to fairly wide changes in activity.
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A) Only statement I is true.
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B) Only statement II is true.
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C) Both of the statements are true.
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D) Neither of the statements are true.
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ki
ACCESS Test Bank for Managerial Accounting 18th Edition Garrison
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nursytestbank.store
Managerial Accounting Edition 18 by Garrison ki ki ki ki ki ki
Version 1 ki ki
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