Test Bank for Managerial Accounting for Managers, 6th Edition by
Eric Noreen All Chapters 1-12 Completed
,Chap 01 6e
1 Which of the following statements are true?
1. A factory supervisor's salary would be classified as an indirect cost with respect to
a unitof product.
2. A direct cost is a cost that can be easily traced to the particular cost object
underconsideration.
3. A cost can be direct or indirect. The classification can change if the cost object changes.
A) Only statement 1 is true.
B) Statements 1 and 2 are true.
C) All of the statements are true.
D) None of the statements are true.
2) Which of the following statements are true?
1. Wages paid to production supervisors would be classified as manufacturing overhead.
2. Indirect costs, such as manufacturing overhead, are variable costs.
3. Selling costs are indirect costs.
4. Administrative costs are indirect costs.
A) Only statement 1 is true.
B) Statements 1 and 3 are true.
C) All statements are true.
D) None of the statements are true.
3) Which of the following statements are true?
1. The sum of all manufacturing costs except for direct materials and direct labor is
calledmanufacturing overhead.
2. The three cost elements ordinarily included in product costs are direct materials,
directlabor, and manufacturing overhead.
A) Only statement 1 is true.
B) Only statement 2 is true.
C) Both of the statements are true.
D) Neither of the statements are true.
,4) Which of the following statements are true?
1. Depreciation is always considered a period cost for external financial reporting
purposesin a manufacturing company.
2. Depreciation on equipment a company uses in its selling and administrative
activitieswould be classified as a period cost.
A) Only statement 1 is true.
B) Only statement 2 is true.
C) Both of the statements are true.
D) Neither of the statements are true.
5) Which of the following statements are true?
1. Conversion cost is the sum of direct labor cost and manufacturing overhead cost.
2. Conversion cost is the same thing as manufacturing overhead.
3. Conversion cost equals product cost less direct materials cost.
A) Only statement 1 is true.
B) Statements 1 and 3 are true.
C) All statements are true.
D) None of the statements are true.
6) Which of the following statements are true?
1. In a manufacturing company, all costs are period costs.
2. Selling and administrative expenses are period costs under generally accepted
accountingprinciples.
3. The cost of shipping parts from a supplier is considered a period cost.
A) Only statement 1 is true.
B) Only statement 2 is true.
C) Statements 1 and 2 are true.
D) Statements 1 and 3 are true.
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, 7) Which of the following statements are true?
1. Advertising is not a considered a product cost even if it promotes a specific product.
2. Product costs are also known as inventoriable costs.
3. Prime cost is the sum of direct materials cost and direct labor cost.
4. Prime cost equals manufacturing overhead cost.
A) Only statement 1 is true.
B) Both statements 1 and 4 are true.
C) Statements 1, 2, and 3 are true.
D) None of the statements are true.
8) Which of the following statements are true?
1. If the activity level increases, then one would expect the fixed cost per unit to
increase aswell.
2. A fixed cost is a cost whose cost per unit varies as the activity level rises and falls.
3. A decrease in production will ordinarily result in a decrease in fixed production
costs perunit.
A) Only statement 2 is true.
B) Only statement 3 is true.
C) Statements 1 and 2 are true.
D) Statements 1 and 3 are true.
9) Which of the following statements are true?
1. Cost behavior is considered curvilinear whenever a straight line is a
reasonableapproximation for the relation between cost and activity.
2. As activity decreases within the relevant range, fixed costs remain constant on a
per unitbasis.
3. In account analysis, an account is classified as either variable or fixed based
on ananalyst’s prior knowledge of how the cost in the account behaves.
A) Only statement 1 is true.
B) Only statement 2 is true.
C) Only statement 3 is true.
D) All statements are true.
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Eric Noreen All Chapters 1-12 Completed
,Chap 01 6e
1 Which of the following statements are true?
1. A factory supervisor's salary would be classified as an indirect cost with respect to
a unitof product.
2. A direct cost is a cost that can be easily traced to the particular cost object
underconsideration.
3. A cost can be direct or indirect. The classification can change if the cost object changes.
A) Only statement 1 is true.
B) Statements 1 and 2 are true.
C) All of the statements are true.
D) None of the statements are true.
2) Which of the following statements are true?
1. Wages paid to production supervisors would be classified as manufacturing overhead.
2. Indirect costs, such as manufacturing overhead, are variable costs.
3. Selling costs are indirect costs.
4. Administrative costs are indirect costs.
A) Only statement 1 is true.
B) Statements 1 and 3 are true.
C) All statements are true.
D) None of the statements are true.
3) Which of the following statements are true?
1. The sum of all manufacturing costs except for direct materials and direct labor is
calledmanufacturing overhead.
2. The three cost elements ordinarily included in product costs are direct materials,
directlabor, and manufacturing overhead.
A) Only statement 1 is true.
B) Only statement 2 is true.
C) Both of the statements are true.
D) Neither of the statements are true.
,4) Which of the following statements are true?
1. Depreciation is always considered a period cost for external financial reporting
purposesin a manufacturing company.
2. Depreciation on equipment a company uses in its selling and administrative
activitieswould be classified as a period cost.
A) Only statement 1 is true.
B) Only statement 2 is true.
C) Both of the statements are true.
D) Neither of the statements are true.
5) Which of the following statements are true?
1. Conversion cost is the sum of direct labor cost and manufacturing overhead cost.
2. Conversion cost is the same thing as manufacturing overhead.
3. Conversion cost equals product cost less direct materials cost.
A) Only statement 1 is true.
B) Statements 1 and 3 are true.
C) All statements are true.
D) None of the statements are true.
6) Which of the following statements are true?
1. In a manufacturing company, all costs are period costs.
2. Selling and administrative expenses are period costs under generally accepted
accountingprinciples.
3. The cost of shipping parts from a supplier is considered a period cost.
A) Only statement 1 is true.
B) Only statement 2 is true.
C) Statements 1 and 2 are true.
D) Statements 1 and 3 are true.
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, 7) Which of the following statements are true?
1. Advertising is not a considered a product cost even if it promotes a specific product.
2. Product costs are also known as inventoriable costs.
3. Prime cost is the sum of direct materials cost and direct labor cost.
4. Prime cost equals manufacturing overhead cost.
A) Only statement 1 is true.
B) Both statements 1 and 4 are true.
C) Statements 1, 2, and 3 are true.
D) None of the statements are true.
8) Which of the following statements are true?
1. If the activity level increases, then one would expect the fixed cost per unit to
increase aswell.
2. A fixed cost is a cost whose cost per unit varies as the activity level rises and falls.
3. A decrease in production will ordinarily result in a decrease in fixed production
costs perunit.
A) Only statement 2 is true.
B) Only statement 3 is true.
C) Statements 1 and 2 are true.
D) Statements 1 and 3 are true.
9) Which of the following statements are true?
1. Cost behavior is considered curvilinear whenever a straight line is a
reasonableapproximation for the relation between cost and activity.
2. As activity decreases within the relevant range, fixed costs remain constant on a
per unitbasis.
3. In account analysis, an account is classified as either variable or fixed based
on ananalyst’s prior knowledge of how the cost in the account behaves.
A) Only statement 1 is true.
B) Only statement 2 is true.
C) Only statement 3 is true.
D) All statements are true.
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