Test Bank For
Introduction To Managerial Accounting By
Peter Brewer, Ray Garrison 7th Edition
1-1
, Introduction To Managerial Accounting 7th Edition Test
Bank By Peter Brewer, Ray Garrison,
NOREEN
Chapter 01 Managerial Accounting And Cost Concepts
True / False Questions
1. Selling Costs Can Be Either Direct Or Indirect Costs.
True False
2. A Direct Cost Is A Cost That Cannot Be Easily Traced To The Particular
Cost Object Under Consideration.
True False
3. Property Taxes And Insurance Premiums Paid On A Factory Building Are Examples Of
Period Costs.
True False
4. Conversion Cost Equals Product Cost Less Direct Labor Cost.
True False
5. Thread That Is Used In The Production Of Mattresses Is An Indirect Material
That Is Therefore Classified As Manufacturing Overhead.
True False
6. Direct Labor Is A Part Of Prime Cost, But Not Conversion Cost.
1-2
, True False
7. Conversion Cost Is The Sum Of Direct Labor Cost And Direct Materials Cost.
True False
8. Direct Material Costs Are Generally Fixed Costs.
True False
9. Product Costs Are Recorded As Expenses In The Period In Which The Related Products Are
Sold.
True False
10. Depreciation On Manufacturing Equipment Is A Product Cost.
True False
11. Manufacturing Salaries And Wages Incurred In The Factory Are Period Costs.
True False
1-3
, 12. Depreciation On Office Equipment Would Be Included In Product Costs.
True False
13. Rent On A Factory Building Used In The Production Process Would Be Classified
As A Product Cost And As A Fixed Cost.
True False
14. A Fixed Cost Remains Constant If Expressed On A Unit Basis.
True False
15. Total Variable Cost Is Expected To Remain Unchanged As Activity Changes
Within The Relevant Range.
True False
16. Country Charm Restaurant Is Open 24 Hours A Day And Always Has A Fire Going In
The Fireplace In The Middle Of Its Dining Area. The Cost Of The Firewood For This
Fire Is Fixed With Respect To The Number Of Meals Served At The Restaurant.
True False
17. Committed Fixed Costs Represent Organizational Investments With A Multi-
Year Planning Horizon That Can't Be Significantly Reduced Even For Short
Periods.
True False
18. Commissions Paid To Salespersons Are A Variable Selling Expense.
True False
1-4
Introduction To Managerial Accounting By
Peter Brewer, Ray Garrison 7th Edition
1-1
, Introduction To Managerial Accounting 7th Edition Test
Bank By Peter Brewer, Ray Garrison,
NOREEN
Chapter 01 Managerial Accounting And Cost Concepts
True / False Questions
1. Selling Costs Can Be Either Direct Or Indirect Costs.
True False
2. A Direct Cost Is A Cost That Cannot Be Easily Traced To The Particular
Cost Object Under Consideration.
True False
3. Property Taxes And Insurance Premiums Paid On A Factory Building Are Examples Of
Period Costs.
True False
4. Conversion Cost Equals Product Cost Less Direct Labor Cost.
True False
5. Thread That Is Used In The Production Of Mattresses Is An Indirect Material
That Is Therefore Classified As Manufacturing Overhead.
True False
6. Direct Labor Is A Part Of Prime Cost, But Not Conversion Cost.
1-2
, True False
7. Conversion Cost Is The Sum Of Direct Labor Cost And Direct Materials Cost.
True False
8. Direct Material Costs Are Generally Fixed Costs.
True False
9. Product Costs Are Recorded As Expenses In The Period In Which The Related Products Are
Sold.
True False
10. Depreciation On Manufacturing Equipment Is A Product Cost.
True False
11. Manufacturing Salaries And Wages Incurred In The Factory Are Period Costs.
True False
1-3
, 12. Depreciation On Office Equipment Would Be Included In Product Costs.
True False
13. Rent On A Factory Building Used In The Production Process Would Be Classified
As A Product Cost And As A Fixed Cost.
True False
14. A Fixed Cost Remains Constant If Expressed On A Unit Basis.
True False
15. Total Variable Cost Is Expected To Remain Unchanged As Activity Changes
Within The Relevant Range.
True False
16. Country Charm Restaurant Is Open 24 Hours A Day And Always Has A Fire Going In
The Fireplace In The Middle Of Its Dining Area. The Cost Of The Firewood For This
Fire Is Fixed With Respect To The Number Of Meals Served At The Restaurant.
True False
17. Committed Fixed Costs Represent Organizational Investments With A Multi-
Year Planning Horizon That Can't Be Significantly Reduced Even For Short
Periods.
True False
18. Commissions Paid To Salespersons Are A Variable Selling Expense.
True False
1-4
