Test Bank For Managerial Accounting 16th edition By Garrison

ISBN: 978-1260153132, ISBN-10: 1260153134

Chapter 1  Managerial Accounting and Cost Concepts

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.

4) Wages paid to production supervisors would be classified as manufacturing overhead.

5) Selling costs are indirect costs.

6) The sum of all manufacturing costs except for direct materials and direct labor is called manufacturing overhead.

7) The three cost elements ordinarily included in product costs are direct materials, direct labor, and manufacturing overhead.

8) Administrative costs are indirect costs.

9) Depreciation is always considered a period cost for external financial reporting purposes in a manufacturing company.

10) Opportunity costs at a manufacturing company are not part of manufacturing overhead.

11) Conversion cost is the sum of direct labor cost and manufacturing overhead cost.

12) In a manufacturing company, all costs are period costs.

13) Advertising is not a considered a product cost even if it promotes a specific product.

14) Selling and administrative expenses are period costs under generally accepted accounting principles.

15) Conversion cost equals product cost less direct materials cost.

16) Prime cost is the sum of direct materials cost and direct labor cost.

17) Product costs are also known as inventoriable costs.

18) Prime cost equals manufacturing overhead cost.

19) Conversion cost is the same thing as manufacturing overhead.

20) The cost of shipping parts from a supplier is considered a period cost.