ACNT 2402Chapter 01 - Study Guide Questions and Answers(2022/2023)

Page 1 of 11 Chapter 01 Managerial Accounting and Cost Concepts 1. Selling costs can be either direct or indirect costs. TRUE 2. A direct cost is a cost that cannot be easily traced to the particular cost object under consideration. FALSE 3. Property taxes and insurance premiums paid on a factory building are examples of period costs. FALSE 4. Conversion cost equals product cost less direct labor cost. FALSE 5. Thread that is used in the production of mattresses is an indirect material that is therefore classified as manufacturing overhead. TRUE 6. Direct labor is a part of prime cost, but not conversion cost. TRUE 7. Conversion cost is the sum of direct labor cost and direct materials cost. FALSE 8. Direct material costs are generally fixed costs. FALSE 9. Product costs are recorded as expenses in the period in which the related products are sold. TRUE 10. Depreciation on manufacturing equipment is a product cost. TRUE