TEST BANK FOR INTRODUCTION TO MAN
ACCOUNTING, 5TH EDITION: BREW
, 1
Student:
1. Managerial accounting is primarily concerned with the organization as a whole rather than with segments of t
True False
2. Managerial accounting places less emphasis on nonmonetary data than financial accounting.
True False
3. Direct labor is a part of both prime cost and conversion cost.
True False
4. Wages paid to production supervisors would be considered direct labor.
True False
5. Direct material cost combined with manufacturing overhead cost is known as conversion cost.
True False
6. Advertising is a product cost as long as it promotes specific products.
True False
7. Although depreciation is always a period cost in a merchandising firm, it can be a product cost in a manufactu
True False
8. In a manufacturing firm, all costs are product costs.
True False
9. The cost of shipping parts from a supplier is considered a product cost.
True False
10. If the finished goods inventory increases between the beginning and the end of a period, then the cost of good
period is larger than the cost of goods sold.
True False
11. The inventory of finished goods on hand at the end of a period is considered an asset, but inventories of raw m
process are not considered assets until production is completed.
True False
12. The cost of goods manufactured for a period is the amount transferred from work in process inventory to finis
the period.
True False
13. Differential costs can be either fixed or variable.
True False
,D. Responses a, b, and c are all correct.
19. The plans of management are expressed formally in:
A. the annual report to shareholders.
B. Form 10-Q submitted to the Securities and Exchange Commission.
C. performance reports.
D. budgets.
20. Which of the following IS a characteristic of financial accounting?
A. not mandatory
B. must follow GAAP
C. emphasis on relevance of data, rather than precision
D. both A and C above
21. The corporate controller's salary would be considered a(n):
A. manufacturing cost.
B. product cost.
C. administrative cost.
D. selling expense.
22. The costs of direct materials are classified as:
A. A
B. B
C. C
D. D
23. Manufacturing overhead:
A. can be either a variable cost or a fixed cost.
B. includes the costs of shipping finished goods to customers.
C. includes all factory labor costs.
D. includes all fixed costs.
24. The three basic elements of manufacturing cost are direct materials, direct labor, and:
A. cost of goods manufactured.
B. cost of goods sold.
C. work in process.
D. manufacturing overhead.
25. Prime cost consists of direct materials combined with:
A. direct labor.
B. manufacturing overhead.
C. indirect materials.
D. cost of goods manufactured.
26. Which terms below correctly describe the cost of the black paint used to paint the dots on a pair of dice?
, C. direct materials.
D. rent on a headquarters building.
29. Transportation costs incurred by a manufacturing company to ship its product to its customers would be class
following?
A. Product cost
B. Manufacturing overhead
C. Period cost
D. Administrative cost
30. Micro Computer Company has set up a toll-free telephone line for customer inquiries regarding computer har
company. The cost of this toll-free line would be classified as which of the following?
A. Product cost
B. Manufacturing overhead
C. Direct labor
D. Period cost
31. Rossiter Company failed to record a credit sale at the end of the year, although the reduction in finished goods
recorded when the goods were shipped to the customer. Which one of the following statements is correct?
A. A
B. B
C. C
D. D
32. Cost of goods manufactured will usually include:
A. A
B. B
C. C
D. D
33. Which two terms below describe the wages paid to security guards that monitor a factory 24 hours a day?
A. variable cost and direct cost
B. fixed cost and direct cost
C. variable cost and indirect cost
D. fixed cost and indirect cost
34. Within the relevant range, the difference between variable costs and fixed costs is:
ACCOUNTING, 5TH EDITION: BREW
, 1
Student:
1. Managerial accounting is primarily concerned with the organization as a whole rather than with segments of t
True False
2. Managerial accounting places less emphasis on nonmonetary data than financial accounting.
True False
3. Direct labor is a part of both prime cost and conversion cost.
True False
4. Wages paid to production supervisors would be considered direct labor.
True False
5. Direct material cost combined with manufacturing overhead cost is known as conversion cost.
True False
6. Advertising is a product cost as long as it promotes specific products.
True False
7. Although depreciation is always a period cost in a merchandising firm, it can be a product cost in a manufactu
True False
8. In a manufacturing firm, all costs are product costs.
True False
9. The cost of shipping parts from a supplier is considered a product cost.
True False
10. If the finished goods inventory increases between the beginning and the end of a period, then the cost of good
period is larger than the cost of goods sold.
True False
11. The inventory of finished goods on hand at the end of a period is considered an asset, but inventories of raw m
process are not considered assets until production is completed.
True False
12. The cost of goods manufactured for a period is the amount transferred from work in process inventory to finis
the period.
True False
13. Differential costs can be either fixed or variable.
True False
,D. Responses a, b, and c are all correct.
19. The plans of management are expressed formally in:
A. the annual report to shareholders.
B. Form 10-Q submitted to the Securities and Exchange Commission.
C. performance reports.
D. budgets.
20. Which of the following IS a characteristic of financial accounting?
A. not mandatory
B. must follow GAAP
C. emphasis on relevance of data, rather than precision
D. both A and C above
21. The corporate controller's salary would be considered a(n):
A. manufacturing cost.
B. product cost.
C. administrative cost.
D. selling expense.
22. The costs of direct materials are classified as:
A. A
B. B
C. C
D. D
23. Manufacturing overhead:
A. can be either a variable cost or a fixed cost.
B. includes the costs of shipping finished goods to customers.
C. includes all factory labor costs.
D. includes all fixed costs.
24. The three basic elements of manufacturing cost are direct materials, direct labor, and:
A. cost of goods manufactured.
B. cost of goods sold.
C. work in process.
D. manufacturing overhead.
25. Prime cost consists of direct materials combined with:
A. direct labor.
B. manufacturing overhead.
C. indirect materials.
D. cost of goods manufactured.
26. Which terms below correctly describe the cost of the black paint used to paint the dots on a pair of dice?
, C. direct materials.
D. rent on a headquarters building.
29. Transportation costs incurred by a manufacturing company to ship its product to its customers would be class
following?
A. Product cost
B. Manufacturing overhead
C. Period cost
D. Administrative cost
30. Micro Computer Company has set up a toll-free telephone line for customer inquiries regarding computer har
company. The cost of this toll-free line would be classified as which of the following?
A. Product cost
B. Manufacturing overhead
C. Direct labor
D. Period cost
31. Rossiter Company failed to record a credit sale at the end of the year, although the reduction in finished goods
recorded when the goods were shipped to the customer. Which one of the following statements is correct?
A. A
B. B
C. C
D. D
32. Cost of goods manufactured will usually include:
A. A
B. B
C. C
D. D
33. Which two terms below describe the wages paid to security guards that monitor a factory 24 hours a day?
A. variable cost and direct cost
B. fixed cost and direct cost
C. variable cost and indirect cost
D. fixed cost and indirect cost
34. Within the relevant range, the difference between variable costs and fixed costs is:
