Test bank -Introduction To Managerial
Accounting 7th Edition by Peter Brewer,
Ray Garrison, NOREEN-latest 2022
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 costsL canL beL either!!direct!!or!!indirect!!costs.
True False
2. A!!direct!!cost!!is!!a!!cost!!that!!cannot!!be!!easily!!traced!!to!!the!!particular!!cost!!object!!unde
r!!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!!therefor
e!!classified!!as!!manufacturing!!overhead.
True False
6. Direct!!labor!!is!!a!!part!!of!!prime!!cost,!!but!!not!!conversion!!cost.
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, 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. ProductLcostsL areL recordedL asL expensesL inL theL periodL inL whichL theL relatedL productsL areL sold.
True False
10. DepreciationLonLmanufacturingLequipmentLisLaL productL cost.
True False
11. ManufacturingLsalariesL andL wagesL incurredL inL theL factoryL areL periodLcosts.
True False
12. DepreciationLonLofficeL equipmentL wouldLbeL includedL inL productL costs.
True False
13. RentL onL aL factoryL buildingL usedL inL theL productionL processL wouldL beL classifiedL asL aL productL
costL andL asL aL fixedL cost.
True False
14. ALfixedL costL remainsL constantL ifL expressedL onL aL unitL basis.
True False
15. TotalL variableL costL isL expectedL toL remainL unchangedL asL activityL changesL withinL theL
relevantL range.
True False
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, 16. CountryL CharmL RestaurantL isL openL 24L hoursL aL dayL andL alwaysL hasL aL fireL goingL inL theL
fireplaceL inL theL middleL of L itsL diningL area.L TheL costL of L theL firewoodL forL thisL fireL isL fixedL withL
respectL toL theL numberL ofL mealsL servedL atL theL restaurant.
True False
17. CommittedLfixedL costsL representL organizationalL investmentsL withL aL multi-yearL planningL
horizonL thatL can'tL beL significantlyL reducedL evenL forL shortL periods.
True False
18. CommissionsL paidLtoL salespersonsLareL aLvariableLsellingLexpense.
True False
19. VariableL costsL areL costsL thatL vary,L inL total,L inL directL proportionL toL changesL inL theL volumeL orL
levelL ofL activity.
True False
20. TheLplanningL horizonLforL aL committedL fixedL costL usuallyL encompassesL manyL years.
True False
21. CostL behaviorL isL consideredL linearL wheneverL aL straightL lineL isL aL reasonableL approximationL forL
theL relationL betweenL costL andL activity.
True False
22. TheL high-lowL methodL usesL costL andL activityL dataL fromL justL twoL periodsL toL establishL theL
formulaL forL aL mixedL cost.
True False
23. TheL engineeringL approachL toL theL analysisL of L mixedL costsL involvesL aL detailedL analysisL of L whatL
costL behaviorL shouldL be,L basedL onL anL industrialL engineer'sL evaluationL ofL theL productionL
methodsL toL beL used,L theL materialsL specifications,L laborL requirements,L equipmentL usage,L
productionL efficiency,L powerL consumption,L andL soL on.
1-4
Accounting 7th Edition by Peter Brewer,
Ray Garrison, NOREEN-latest 2022
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 costsL canL beL either!!direct!!or!!indirect!!costs.
True False
2. A!!direct!!cost!!is!!a!!cost!!that!!cannot!!be!!easily!!traced!!to!!the!!particular!!cost!!object!!unde
r!!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!!therefor
e!!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. ProductLcostsL areL recordedL asL expensesL inL theL periodL inL whichL theL relatedL productsL areL sold.
True False
10. DepreciationLonLmanufacturingLequipmentLisLaL productL cost.
True False
11. ManufacturingLsalariesL andL wagesL incurredL inL theL factoryL areL periodLcosts.
True False
12. DepreciationLonLofficeL equipmentL wouldLbeL includedL inL productL costs.
True False
13. RentL onL aL factoryL buildingL usedL inL theL productionL processL wouldL beL classifiedL asL aL productL
costL andL asL aL fixedL cost.
True False
14. ALfixedL costL remainsL constantL ifL expressedL onL aL unitL basis.
True False
15. TotalL variableL costL isL expectedL toL remainL unchangedL asL activityL changesL withinL theL
relevantL range.
True False
1-3
, 16. CountryL CharmL RestaurantL isL openL 24L hoursL aL dayL andL alwaysL hasL aL fireL goingL inL theL
fireplaceL inL theL middleL of L itsL diningL area.L TheL costL of L theL firewoodL forL thisL fireL isL fixedL withL
respectL toL theL numberL ofL mealsL servedL atL theL restaurant.
True False
17. CommittedLfixedL costsL representL organizationalL investmentsL withL aL multi-yearL planningL
horizonL thatL can'tL beL significantlyL reducedL evenL forL shortL periods.
True False
18. CommissionsL paidLtoL salespersonsLareL aLvariableLsellingLexpense.
True False
19. VariableL costsL areL costsL thatL vary,L inL total,L inL directL proportionL toL changesL inL theL volumeL orL
levelL ofL activity.
True False
20. TheLplanningL horizonLforL aL committedL fixedL costL usuallyL encompassesL manyL years.
True False
21. CostL behaviorL isL consideredL linearL wheneverL aL straightL lineL isL aL reasonableL approximationL forL
theL relationL betweenL costL andL activity.
True False
22. TheL high-lowL methodL usesL costL andL activityL dataL fromL justL twoL periodsL toL establishL theL
formulaL forL aL mixedL cost.
True False
23. TheL engineeringL approachL toL theL analysisL of L mixedL costsL involvesL aL detailedL analysisL of L whatL
costL behaviorL shouldL be,L basedL onL anL industrialL engineer'sL evaluationL ofL theL productionL
methodsL toL beL used,L theL materialsL specifications,L laborL requirements,L equipmentL usage,L
productionL efficiency,L powerL consumption,L andL soL on.
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