TEST BANK
Managerial Accounting for Managers, | 5th Edition
by Eric Noreen, Peter Brewer, Ray Garrison
SC
O
R
EG
U
ID
ES
,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
SC
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
O
2) A direct cost is a cost that can be easily traced to the particular cost object under
consideration.
R
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
EG
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.
U
Answer: TRUE
Difficulty: 2 Medium
Topic: Cost Classifications for Assigning Costs to Cost Objects
ID
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
ES
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
SC
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
5) Selling costs are indirect costs.
Answer: FALSE
Difficulty: 2 Medium
O
Topic: Cost Classifications for Manufacturing Companies
Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing
cost categories.
R
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
EG
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
U
cost categories.
Bloom's: Understand
AACSB: Reflective Thinking
ID
AICPA: BB Critical Thinking; FN Measurement
7) The three cost elements ordinarily included in product costs are direct materials, direct labor,
and manufacturing overhead.
ES
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
SC
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
O
Difficulty: 2 Medium
Topic: Cost Classifications for Manufacturing Companies; Cost Classifications for Preparing
Financial Statements
R
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
EG
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
U
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
ID
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
ES
3
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Managerial Accounting for Managers, | 5th Edition
by Eric Noreen, Peter Brewer, Ray Garrison
SC
O
R
EG
U
ID
ES
,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
SC
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
O
2) A direct cost is a cost that can be easily traced to the particular cost object under
consideration.
R
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
EG
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.
U
Answer: TRUE
Difficulty: 2 Medium
Topic: Cost Classifications for Assigning Costs to Cost Objects
ID
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
ES
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
SC
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
5) Selling costs are indirect costs.
Answer: FALSE
Difficulty: 2 Medium
O
Topic: Cost Classifications for Manufacturing Companies
Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing
cost categories.
R
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
EG
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
U
cost categories.
Bloom's: Understand
AACSB: Reflective Thinking
ID
AICPA: BB Critical Thinking; FN Measurement
7) The three cost elements ordinarily included in product costs are direct materials, direct labor,
and manufacturing overhead.
ES
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
SC
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
O
Difficulty: 2 Medium
Topic: Cost Classifications for Manufacturing Companies; Cost Classifications for Preparing
Financial Statements
R
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
EG
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
U
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
ID
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
ES
3
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
