Chapter 002, Managerial Accounting and Cost Concepts

| October 3, 2018

1. Managerial accounting is primarily concerned with the organization
as a whole rather than with segments of the organization.
True False

2. Managerial accounting places less emphasis on nonmonetary data
than financial accounting.
True False

Direct labor is a part of
both prime cost and conversion cost.

True False

4. Wages paid to production supervisors would be considered direct
labor. True False

5. Direct material cost combined with manufacturing overhead cost is
known as conversion cost.
True False

Advertising is a product
cost as long as it promotes specific products.

True False

7. Although depreciation is always a period cost in a
merchandising firm, it can be a product cost in a manufacturing firm.

True False


Chapter 002, Managerial Accounting and Cost Concepts

8. In a manufacturing firm, all costs are product costs. True False

9. The cost of shipping parts from a supplier is considered a product
cost. True False

10. If the finished goods inventory increases between the beginning
and the end of a period, then the cost of goods manufactured for the period is
larger than the cost of goods sold. True False

11. The inventory of finished goods on hand at the end of a period is
considered an asset, but inventories of raw materials and work-in-process are
not considered assets until production is completed.
True False

12. The cost of goods manufactured for a period is the amount transferred
from work in process inventory to finished goods inventory during the period.
True False

Differential costs can be
either fixed or variable.

True False

14. A fixed cost is constant per unit of product. True False

15. The variable cost per unit is constant and does not depend on how
many units are produced.
True False


Chapter 002, Managerial Accounting and Cost Concepts

16. The cost of napkins put on each person’s tray at a fast food
restaurant is a fixed cost. True False

17. A factory supervisor’s salary would be classified as a direct cost
of a unit of product. True False

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