TEST BANK FOR MANAGERIAL
ACCOUNTING 18TH EDITION
GARRISON ALL CHAPTER
INCLUDED|| LATEST AND
COMPLETE UPDATE 2025 WITH
VERIFIED SOLUTIONS|| ASSURED
PASS
,1|Page
TEST BANK FOR MANAGERIAL ACCOUNTING 18TH
EDITION GARRISON ALL CHAPTER INCLUDED|| LATEST
AND COMPLETE UPDATE 2025 WITH VERIFIED
SOLUTIONS|| ASSURED PASS
Chapter 1
Answers key at the end of every chapter
MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
answers the question.
1) Which of the following statements are true?
1. A factory supervisor's salary would be classified as an indirect cost with respect to a unit
of product.
2. A direct cost is a cost that can be easily traced to the particular cost object under
consideration.
3. A cost can be direct or indirect. The classification can change if the cost object changes.
A) Only statement I is true.
B) Statements I and II are true.
C) All of the statements are true.
D) None of the statements are true.
2) Which of the following statements are true?
1. Wages paid to production supervisors would be classified as manufacturing overhead.
2. Indirect costs, such as manufacturing overhead, are variable costs.
3. Selling costs are indirect costs.
4. Administrative costs are indirect costs.
A) Only statement I is true.
B) Statements I and III are true.
C) All statements are true.
D) None of the statements are true.
,2|Page
3) Which of the following statements are true?
1. The sum of all manufacturing costs except for direct materials and direct labor is called
manufacturing overhead.
2. The three cost elements ordinarily included in product costs are direct materials, direct
labor, and manufacturing overhead.
A) Only statement I is true.
B) Only statement II is true.
C) Both of the statements are true.
D) Neither of the statements are true.
4) Which of the following statements are true?
1. Depreciation is always considered a period cost for external financial reporting purposes
in a manufacturing company.
2. Depreciation on equipment a company uses in its selling and administrative activities
would be classified as a period cost.
A) Only statement I is true.
B) Only statement II is true.
C) Both of the statements are true.
D) Neither of the statements are true.
5) Which of the following statements are true?
1. Conversion cost is the sum of direct labor cost and manufacturing overhead cost.
2. Conversion cost is the same thing as manufacturing overhead.
3. Conversion cost equals product cost less direct materials cost.
A) Only statement I is true.
B) Statements I and III are true.
C) All statements are true.
D) None of the statements are true.
, 3|Page
6) Which of the following statements are true?
1. In a manufacturing company, all costs are period costs.
2. Selling and administrative expenses are period costs under generally accepted accounting
principles.
3. The cost of shipping parts from a supplier is considered a period cost.
A) Only statement I is true.
B) Only statement II is true.
C) Statements I and II are true.
D) Statements I and III are true.
7) Which of the following statements are true?
1. Advertising is not a considered a product cost even if it promotes a specific product.
2. Product costs are also known as inventoriable costs.
3. Prime cost is the sum of direct materials cost and direct labor cost.
4. Prime cost equals manufacturing overhead cost.
A) Only statement I is true.
B) Both statements I and IV are true.
C) Statements I, II, and III are true.
D) None of the statements are true.
8) Which of the following statements are true?
1. If the activity level increases, then one would expect the fixed cost per unit to increase as
well.
2. A fixed cost is a cost whose cost per unit varies as the activity level rises and falls.
3. A decrease in production will ordinarily result in a decrease in fixed production costs per
unit.
A) Only statement II is true.
B) Only statement III is true.
ACCOUNTING 18TH EDITION
GARRISON ALL CHAPTER
INCLUDED|| LATEST AND
COMPLETE UPDATE 2025 WITH
VERIFIED SOLUTIONS|| ASSURED
PASS
,1|Page
TEST BANK FOR MANAGERIAL ACCOUNTING 18TH
EDITION GARRISON ALL CHAPTER INCLUDED|| LATEST
AND COMPLETE UPDATE 2025 WITH VERIFIED
SOLUTIONS|| ASSURED PASS
Chapter 1
Answers key at the end of every chapter
MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
answers the question.
1) Which of the following statements are true?
1. A factory supervisor's salary would be classified as an indirect cost with respect to a unit
of product.
2. A direct cost is a cost that can be easily traced to the particular cost object under
consideration.
3. A cost can be direct or indirect. The classification can change if the cost object changes.
A) Only statement I is true.
B) Statements I and II are true.
C) All of the statements are true.
D) None of the statements are true.
2) Which of the following statements are true?
1. Wages paid to production supervisors would be classified as manufacturing overhead.
2. Indirect costs, such as manufacturing overhead, are variable costs.
3. Selling costs are indirect costs.
4. Administrative costs are indirect costs.
A) Only statement I is true.
B) Statements I and III are true.
C) All statements are true.
D) None of the statements are true.
,2|Page
3) Which of the following statements are true?
1. The sum of all manufacturing costs except for direct materials and direct labor is called
manufacturing overhead.
2. The three cost elements ordinarily included in product costs are direct materials, direct
labor, and manufacturing overhead.
A) Only statement I is true.
B) Only statement II is true.
C) Both of the statements are true.
D) Neither of the statements are true.
4) Which of the following statements are true?
1. Depreciation is always considered a period cost for external financial reporting purposes
in a manufacturing company.
2. Depreciation on equipment a company uses in its selling and administrative activities
would be classified as a period cost.
A) Only statement I is true.
B) Only statement II is true.
C) Both of the statements are true.
D) Neither of the statements are true.
5) Which of the following statements are true?
1. Conversion cost is the sum of direct labor cost and manufacturing overhead cost.
2. Conversion cost is the same thing as manufacturing overhead.
3. Conversion cost equals product cost less direct materials cost.
A) Only statement I is true.
B) Statements I and III are true.
C) All statements are true.
D) None of the statements are true.
, 3|Page
6) Which of the following statements are true?
1. In a manufacturing company, all costs are period costs.
2. Selling and administrative expenses are period costs under generally accepted accounting
principles.
3. The cost of shipping parts from a supplier is considered a period cost.
A) Only statement I is true.
B) Only statement II is true.
C) Statements I and II are true.
D) Statements I and III are true.
7) Which of the following statements are true?
1. Advertising is not a considered a product cost even if it promotes a specific product.
2. Product costs are also known as inventoriable costs.
3. Prime cost is the sum of direct materials cost and direct labor cost.
4. Prime cost equals manufacturing overhead cost.
A) Only statement I is true.
B) Both statements I and IV are true.
C) Statements I, II, and III are true.
D) None of the statements are true.
8) Which of the following statements are true?
1. If the activity level increases, then one would expect the fixed cost per unit to increase as
well.
2. A fixed cost is a cost whose cost per unit varies as the activity level rises and falls.
3. A decrease in production will ordinarily result in a decrease in fixed production costs per
unit.
A) Only statement II is true.
B) Only statement III is true.
