Test Bank for Managerial Accounting 16th Edition By Garrison

TEST BANK FOR MANAGERIAL
ACCOUNTING 16TH EDITION BY
GARRISON

,6e_GNB_CH01TB, Chapter 1, Managerial Accounting and
Cost Concepts

True/False
[QUESTION]
1. A factory supervisor's salary would be classified as an indirect cost with respect to a unit of product.
Answer: T
Difficulty: 2 Medium
Learning Objective: 01-01
Topic Area:
Blooms: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
AICPA: FN Measurement
Feedback:

[QUESTION]
2. A direct cost is a cost that can be easily traced to the particular cost object under consideration.
Answer: T
Difficulty: 1 Easy
Learning Objective: 01-01
Topic Area:
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
AICPA: FN Measurement
Feedback:

[QUESTION]
3. A cost can be direct or indirect. The classification can change if the cost object changes.
Answer: T
Difficulty: 2 Medium
Learning Objective: 01-01
Topic Area:
Blooms: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
AICPA: FN Measurement
Feedback:

[QUESTION]
4. Wages paid to production supervisors would be classified as manufacturing overhead.
Answer: T
Difficulty: 1 Easy
Learning Objective: 01-02
Topic Area:
Blooms: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
AICPA: FN Measurement
Feedback:

,[QUESTION]
5. Selling costs are indirect costs.
Answer: F
Difficulty: 2 Medium
Learning Objective: 01-02
Topic Area:
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
AICPA: FN Measurement
Feedback:

[QUESTION]
6. The sum of all manufacturing costs except for direct materials and direct labor is called manufacturing
overhead.
Answer: T
Difficulty: 2 Medium
Learning Objective: 01-02
Topic Area:
Blooms: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
AICPA: FN Measurement
Feedback:

[QUESTION]
7. The three cost elements ordinarily included in product costs are direct materials, direct labor, and
manufacturing overhead.
Answer: T
Difficulty: 1 Easy
Learning Objective: 01-02
Topic Area:
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
AICPA: FN Measurement
Feedback:

[QUESTION]
8. Administrative costs are indirect costs.
Answer: F
Difficulty: 2 Medium
Learning Objective: 01-02
Topic Area:
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
AICPA: FN Measurement
Feedback:

[QUESTION]
9. Depreciation is always considered a period cost for external financial reporting purposes in a manufacturing
company.
Answer: F
Difficulty: 2 Medium

, Learning Objective: 01-02
Learning Objective: 01-03
Topic Area:
Blooms: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
AICPA: FN Measurement
Feedback:

[QUESTION]
10. Opportunity costs at a manufacturing company are not part of manufacturing overhead.
Answer: T
Difficulty: 3 Hard
Learning Objective: 01-02
Learning Objective: 01-05
Topic Area:
Blooms: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
AICPA: FN Measurement
Feedback:

[QUESTION]
11. Conversion cost is the sum of direct labor cost and manufacturing overhead cost.
Answer: T
Difficulty: 1 Easy
Learning Objective: 01-03
Topic Area:
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
AICPA: FN Measurement
Feedback:

[QUESTION]
12. In a manufacturing company, all costs are period costs.
Answer: F
Difficulty: 1 Easy
Learning Objective: 01-03
Topic Area:
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
AICPA: FN Measurement
Feedback:

[QUESTION]
13. Advertising is not a considered a product cost even if it promotes a specific product.
Answer: T
Difficulty: 2 Medium
Learning Objective: 01-03
Topic Area:
Blooms: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
AICPA: FN Measurement