TEST BANK FOR MANAGERIAL
ACCOUNTING 11TH CANADIAN EDITION BY
RAY GARRISON QUESTIONS WITH
COMPLETE SOLUTIONS 2025 - 2026.
Multiple Choice Questions
1. What would be the classification of corporate controller's salary?
A. Manufacturing cost.B. Product cost.C. Administrative cost.D. Selling cost.
,Blooms: UnderstandCPA Competency: 3.3.1 Evaluates cost classifications and costing methods for management of ongoing
operations.Difficulty: EasyLearning Objective: 02-01 Identify and give examples of each of the three basic manufacturing cost
categories.Topic: 02-08 Non-manufacturing Costs
2. How should the cost of the fire insurance for a manufacturing plant be classified? A.
Prime cost.B. Product cost.C. Period cost.D. Variable cost.
Blooms: UnderstandCPA Competency: 3.3.1 Evaluates cost classifications and costing methods for management of ongoing
operations.Difficulty: MediumLearning Objective: 02-01 Identify and give examples of each of the three basic manufacturing cost
categories.Learning Objective: 02-02 Distinguish between product costs and period costs; and give examples of each.Topic: 02-06
Manufacturing OverheadTopic: 02-10 Product CostsTopic: 02-11 Period Costs
3. How would the cost of rent for a manufacturing plant generally be classified? A. A
product cost but not a prime cost.B. Neither a product nor prime cost.C. A prime cost but
not a product cost.D. Both a prime cost and product cost.
Blooms: UnderstandCPA Competency: 3.3.1 Evaluates cost classifications and costing methods for management of ongoing
operations.Difficulty: MediumLearning Objective: 02-01 Identify and give examples of each of the three basic manufacturing cost
categories.Learning Objective: 02-02 Distinguish between product costs and period costs; and give examples of each.Topic: 02-06
Manufacturing OverheadTopic: 02-10 Product CostsTopic:
02-11 Period Costs
4. For a lamp manufacturing company, the cost of the insurance on its vehicles that deliver
lamps to customers is best described as a: A. Prime cost.B. Manufacturing overhead
cost.C. Period cost.D. Differential cost of a lamp.
Blooms: UnderstandCPA Competency: 3.3.1 Evaluates cost classifications and costing methods for management of ongoing
operations.Difficulty: MediumLearning Objective: 02-02 Distinguish between product costs and period costs; and give examples of
each.Topic: 02-10 Product CostsTopic: 02-11 Period Costs
,5. For a manufacturing company, which of the following is an example of a
period cost rather than a product cost? A. Depreciation of factory equipment.B. Wages of
salespersons.C. Wages of machine operators. D. Insurance on factory equipment.
Blooms: UnderstandCPA Competency: 3.3.1 Evaluates cost classifications and costing methods for management of ongoing
operations.Difficulty: EasyLearning Objective: 02-02 Distinguish between product costs and period costs; and give examples of each.Topic:
02-10 Product CostsTopic: 02-11 Period Costs
6. Which of the following would be considered a product cost for external financial
reporting purposes? A. Cost of a warehouse used to store finished goods.B. Cost of
guided public tours through the company's facilities.
C. Cost of travel necessary to sell the manufactured product.D. Cost of sand spread on the
factory floor to absorb oil from manufacturing machines.
Blooms: UnderstandCPA Competency: 3.3.1 Evaluates cost classifications and costing methods for management of ongoing
operations.Difficulty: MediumLearning Objective: 02-02 Distinguish between product costs and period costs; and give examples of
each.Topic: 02-10 Product CostsTopic: 02-11 Period Costs
7. Which of the following would NOT be treated as a product cost for external financial
reporting purposes? A. Depreciation on a factory building.B. Salaries of factory
workers.C. Indirect labour in the factory. D. Advertising expenses.
Blooms: UnderstandCPA Competency: 3.3.1 Evaluates cost classifications and costing methods for management of ongoing
operations.Difficulty: EasyLearning Objective: 02-02 Distinguish between product costs and period costs; and give examples of each.Topic:
02-10 Product CostsTopic: 02-11 Period Costs
, 8. What would be the classification of the transportation costs incurred by a
manufacturing company to ship its product to its customers? A. Product cost.B.
Manufacturing overhead.C. Period cost.D. Administrative cost.
Blooms: UnderstandCPA Competency: 3.3.1 Evaluates cost classifications and costing methods for management of ongoing
operations.Difficulty: EasyLearning Objective: 02-02 Distinguish between product costs and period costs; and give examples of each.Topic:
02-10 Product CostsTopic: 02-11 Period Costs
9. The advertising costs incurred by Pepsi to air its commercials during the hockey season
can best be described as a: A. Variable cost.B. Fixed cost. C. Prime cost.D. Conversion
cost.
Blooms: ApplyCPA Competency: 3.3.2 Evaluates and applies cost management techniques appropriate for specific costing
decisions.Difficulty: MediumLearning Objective: 02-05 Explain the differences between variable and fixed costs.Topic: 02-20 Variable
CostTopic: 02-21 Fixed Cost
10. Micro Computer Company has set up a toll-free telephone line for customer inquiries
regarding computer hardware produced by the company. How would the cost of this
toll-free line be classified? A. Product cost.B. Manufacturing overhead.C. Direct
labour.D. Period cost.
Blooms: ApplyCPA Competency: 3.3.1 Evaluates cost classifications and costing methods for management of ongoing operations.Difficulty:
EasyLearning Objective: 02-02 Distinguish between product costs and period costs; and give examples of each.Topic: 02-10 Product
CostsTopic: 02-11 Period Costs
ACCOUNTING 11TH CANADIAN EDITION BY
RAY GARRISON QUESTIONS WITH
COMPLETE SOLUTIONS 2025 - 2026.
Multiple Choice Questions
1. What would be the classification of corporate controller's salary?
A. Manufacturing cost.B. Product cost.C. Administrative cost.D. Selling cost.
,Blooms: UnderstandCPA Competency: 3.3.1 Evaluates cost classifications and costing methods for management of ongoing
operations.Difficulty: EasyLearning Objective: 02-01 Identify and give examples of each of the three basic manufacturing cost
categories.Topic: 02-08 Non-manufacturing Costs
2. How should the cost of the fire insurance for a manufacturing plant be classified? A.
Prime cost.B. Product cost.C. Period cost.D. Variable cost.
Blooms: UnderstandCPA Competency: 3.3.1 Evaluates cost classifications and costing methods for management of ongoing
operations.Difficulty: MediumLearning Objective: 02-01 Identify and give examples of each of the three basic manufacturing cost
categories.Learning Objective: 02-02 Distinguish between product costs and period costs; and give examples of each.Topic: 02-06
Manufacturing OverheadTopic: 02-10 Product CostsTopic: 02-11 Period Costs
3. How would the cost of rent for a manufacturing plant generally be classified? A. A
product cost but not a prime cost.B. Neither a product nor prime cost.C. A prime cost but
not a product cost.D. Both a prime cost and product cost.
Blooms: UnderstandCPA Competency: 3.3.1 Evaluates cost classifications and costing methods for management of ongoing
operations.Difficulty: MediumLearning Objective: 02-01 Identify and give examples of each of the three basic manufacturing cost
categories.Learning Objective: 02-02 Distinguish between product costs and period costs; and give examples of each.Topic: 02-06
Manufacturing OverheadTopic: 02-10 Product CostsTopic:
02-11 Period Costs
4. For a lamp manufacturing company, the cost of the insurance on its vehicles that deliver
lamps to customers is best described as a: A. Prime cost.B. Manufacturing overhead
cost.C. Period cost.D. Differential cost of a lamp.
Blooms: UnderstandCPA Competency: 3.3.1 Evaluates cost classifications and costing methods for management of ongoing
operations.Difficulty: MediumLearning Objective: 02-02 Distinguish between product costs and period costs; and give examples of
each.Topic: 02-10 Product CostsTopic: 02-11 Period Costs
,5. For a manufacturing company, which of the following is an example of a
period cost rather than a product cost? A. Depreciation of factory equipment.B. Wages of
salespersons.C. Wages of machine operators. D. Insurance on factory equipment.
Blooms: UnderstandCPA Competency: 3.3.1 Evaluates cost classifications and costing methods for management of ongoing
operations.Difficulty: EasyLearning Objective: 02-02 Distinguish between product costs and period costs; and give examples of each.Topic:
02-10 Product CostsTopic: 02-11 Period Costs
6. Which of the following would be considered a product cost for external financial
reporting purposes? A. Cost of a warehouse used to store finished goods.B. Cost of
guided public tours through the company's facilities.
C. Cost of travel necessary to sell the manufactured product.D. Cost of sand spread on the
factory floor to absorb oil from manufacturing machines.
Blooms: UnderstandCPA Competency: 3.3.1 Evaluates cost classifications and costing methods for management of ongoing
operations.Difficulty: MediumLearning Objective: 02-02 Distinguish between product costs and period costs; and give examples of
each.Topic: 02-10 Product CostsTopic: 02-11 Period Costs
7. Which of the following would NOT be treated as a product cost for external financial
reporting purposes? A. Depreciation on a factory building.B. Salaries of factory
workers.C. Indirect labour in the factory. D. Advertising expenses.
Blooms: UnderstandCPA Competency: 3.3.1 Evaluates cost classifications and costing methods for management of ongoing
operations.Difficulty: EasyLearning Objective: 02-02 Distinguish between product costs and period costs; and give examples of each.Topic:
02-10 Product CostsTopic: 02-11 Period Costs
, 8. What would be the classification of the transportation costs incurred by a
manufacturing company to ship its product to its customers? A. Product cost.B.
Manufacturing overhead.C. Period cost.D. Administrative cost.
Blooms: UnderstandCPA Competency: 3.3.1 Evaluates cost classifications and costing methods for management of ongoing
operations.Difficulty: EasyLearning Objective: 02-02 Distinguish between product costs and period costs; and give examples of each.Topic:
02-10 Product CostsTopic: 02-11 Period Costs
9. The advertising costs incurred by Pepsi to air its commercials during the hockey season
can best be described as a: A. Variable cost.B. Fixed cost. C. Prime cost.D. Conversion
cost.
Blooms: ApplyCPA Competency: 3.3.2 Evaluates and applies cost management techniques appropriate for specific costing
decisions.Difficulty: MediumLearning Objective: 02-05 Explain the differences between variable and fixed costs.Topic: 02-20 Variable
CostTopic: 02-21 Fixed Cost
10. Micro Computer Company has set up a toll-free telephone line for customer inquiries
regarding computer hardware produced by the company. How would the cost of this
toll-free line be classified? A. Product cost.B. Manufacturing overhead.C. Direct
labour.D. Period cost.
Blooms: ApplyCPA Competency: 3.3.1 Evaluates cost classifications and costing methods for management of ongoing operations.Difficulty:
EasyLearning Objective: 02-02 Distinguish between product costs and period costs; and give examples of each.Topic: 02-10 Product
CostsTopic: 02-11 Period Costs
