L
O
KS
N
, Managerial Accounting for Managers, 5e (Noreen)
Chapter 1 Managerial Accounting and Cost Concepts
TE
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
S
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.
TB
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
A
consideration.
Answer: TRUE
N
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
KS
objects: direct costs and indirect costs.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
O
3) A cost can be direct or indirect. The classification can change if the cost object changes.
Answer: TRUE
LU
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
TI
AICPA: BB Critical Thinking; FN Measurement
O
N
S
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
TE
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
S
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
TB
5) Selling costs are indirect costs.
Answer: FALSE
Difficulty: 2 Medium
Topic: Cost Classifications for Manufacturing Companies
A
Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing
cost categories.
Bloom's: Remember
N
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
KS
6) The sum of all manufacturing costs except for direct materials and direct labor is called
manufacturing overhead.
Answer: TRUE
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.
LU
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.
TI
Answer: TRUE
Difficulty: 1 Easy
O
Topic: Cost Classifications for Manufacturing Companies
Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing
cost categories.
N
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
S
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
TE
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
S
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
TB
9) Depreciation is always considered a period cost for external financial reporting purposes in a
manufacturing company.
Answer: FALSE
Difficulty: 2 Medium
A
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
N
cost categories.; 01-03 Understand cost classifications used to prepare financial statements:
product costs and period costs.
Bloom's: Understand
KS
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
10) Opportunity costs at a manufacturing company are not part of manufacturing overhead.
O
Answer: TRUE
Difficulty: 3 Hard
Topic: Cost Classifications for Manufacturing Companies; Cost Classifications for Decision
LU
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
TI
AICPA: BB Critical Thinking; FN Measurement
O
N
S
3
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
O
KS
N
, Managerial Accounting for Managers, 5e (Noreen)
Chapter 1 Managerial Accounting and Cost Concepts
TE
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
S
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.
TB
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
A
consideration.
Answer: TRUE
N
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
KS
objects: direct costs and indirect costs.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
O
3) A cost can be direct or indirect. The classification can change if the cost object changes.
Answer: TRUE
LU
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
TI
AICPA: BB Critical Thinking; FN Measurement
O
N
S
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
TE
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
S
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
TB
5) Selling costs are indirect costs.
Answer: FALSE
Difficulty: 2 Medium
Topic: Cost Classifications for Manufacturing Companies
A
Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing
cost categories.
Bloom's: Remember
N
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
KS
6) The sum of all manufacturing costs except for direct materials and direct labor is called
manufacturing overhead.
Answer: TRUE
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.
LU
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.
TI
Answer: TRUE
Difficulty: 1 Easy
O
Topic: Cost Classifications for Manufacturing Companies
Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing
cost categories.
N
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
S
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
TE
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
S
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
TB
9) Depreciation is always considered a period cost for external financial reporting purposes in a
manufacturing company.
Answer: FALSE
Difficulty: 2 Medium
A
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
N
cost categories.; 01-03 Understand cost classifications used to prepare financial statements:
product costs and period costs.
Bloom's: Understand
KS
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
10) Opportunity costs at a manufacturing company are not part of manufacturing overhead.
O
Answer: TRUE
Difficulty: 3 Hard
Topic: Cost Classifications for Manufacturing Companies; Cost Classifications for Decision
LU
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
TI
AICPA: BB Critical Thinking; FN Measurement
O
N
S
3
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
