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Managerial Accounting 14th Edition Test Bank

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    Chapter 1 - Introduction to Managerial Accounting. Copyright Cengage Learning. Powered by Cognero. Page 1 1. Managerial accounting reports must be prepared according to generally accepted accounting principles. a. True b. False ANSWER: False DIFFICULTY: Bloom's: Remembering Easy LEARNING OBJECTIVES: MANG.WARD.18.01 - 01 - 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.25 - Managerial Characteristics/Terminology ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 2. Managerial accounting uses only past data in reports to aid management in the decision making process. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 01 - 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.25 - Managerial Characteristics/Terminology ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 3. Managerial accounting information includes both historical and estimated data. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 01 - 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.25 - Managerial Characteristics/Terminology ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 4. Since there are few rules to restrict how an organization chooses to arrange its own internal data for decision making, managerial accounting provides ample opportunity for developing business strategies. a. True b. False ANSWER: True DIFFICULTY: Bloom's: Remembering Easy LEARNING OBJECTIVES: MANG.WARD.18.01 - 01 - 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.25 - Managerial Characteristics/Terminology ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management

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    Chapter 1 - Introduction to Managerial Accounting. Copyright Cengage Learning. Powered by Cognero. Page 2 BUSPROG: Analytic 5. A diagram of the operating structure of an organization is called an organization chart. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 01 - 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.25 - Managerial Characteristics/Terminology ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 6. In most business organizations, the chief accountant is called the treasurer. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 01 - 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.25 - Managerial Characteristics/Terminology ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 7. In most business organizations, the chief management accountant is called the controller. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 01 - 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.25 - Managerial Characteristics/Terminology ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 8. A staff department or unit is one that provides services, assistance, and advice to the departments with line or other staff responsibilities. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 01 - 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.25 - Managerial Characteristics/Terminology

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    Chapter 1 - Introduction to Managerial Accounting. Copyright Cengage Learning. Powered by Cognero. Page 3 ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 9. The vice presidents of human resources and the controller hold line positions in most large organizations. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 01 - 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.25 - Managerial Characteristics/Terminology ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 10. A staff department has no direct authority over a line department. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 01 - 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.25 - Managerial Characteristics/Terminology ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 11. The controller's staff consists of management accountants responsible for systems and procedures, general accounting, budgets, taxes, and cost accounting. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 01 - 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.25 - Managerial Characteristics/Terminology ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 12. Managerial accounting reports are designed to meet the specific needs of a company’s management. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering

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    Chapter 1 - Introduction to Managerial Accounting. Copyright Cengage Learning. Powered by Cognero. Page 4 LEARNING OBJECTIVES: MANG.WARD.18.01 - 01 - 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.25 - Managerial Characteristics/Terminology ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 13. Planning is the process of monitoring operating results and comparing actual results with the expected results. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 01 - 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.25 - Managerial Characteristics/Terminology ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 14. Planning is the process of developing the company’s objectives or goals and translating these objectives into courses of action. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 01 - 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.25 - Managerial Characteristics/Terminology ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 15. Controlling deals with choosing goals and deciding how to achieve them. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 01 - 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 16. Controlling is the process of monitoring operating results and comparing actual results with the expected results. a. True b. False ANSWER: True DIFFICULTY: Easy

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    Chapter 1 - Introduction to Managerial Accounting. Copyright Cengage Learning. Powered by Cognero. Page 5 Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 01 - 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.25 - Managerial Characteristics/Terminology ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 17. Managerial accounting provides useful information to managers on product costs. a. True b. False ANSWER: True DIFFICULTY: Bloom's: Remembering Easy LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 18. The payment of dividends is an example of a cost. a. True b. False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 19. A cost can be a payment of cash for the purpose of generating revenues. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 20. Goods that are part way through the manufacturing process, but not yet complete, are referred to as materials inventory. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering

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    Chapter 1 - Introduction to Managerial Accounting. Copyright Cengage Learning. Powered by Cognero. Page 6 LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 21. The cost of a manufactured product generally consists of direct materials cost, direct labor cost, and factory overhead cost. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 22. The cost of materials entering directly into the manufacturing process is classified as factory overhead cost. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 23. The cost of wages paid to employees directly involved in converting materials to finished product is classified as direct labor cost. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 24. If the cost of employee wages is not a significant portion of the total product cost, the wages are classified as direct materials cost. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering

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    Chapter 1 - Introduction to Managerial Accounting. Copyright Cengage Learning. Powered by Cognero. Page 7 LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 25. For a construction contractor, the wages of carpenters would be classified as factory overhead cost. a. True b. False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 26. For an automotive repair shop, the wages of mechanics would be classified as direct labor cost. a. True b. False ANSWER: True DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 27. Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as factory overhead cost. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 28. Depreciation on factory plant and equipment is an example of factory overhead cost. a. True b. False ANSWER: True DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs

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    Chapter 1 - Introduction to Managerial Accounting. Copyright Cengage Learning. Powered by Cognero. Page 8 ACCT.IMA.07 - Cost Management BUSPROG: Analytic 29. Cost of oil used to lubricate factory machinery and equipment is an example of a direct materials cost. a. True b. False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 30. If the cost of materials is not a significant portion of the total product cost, the materials may be classified as part of factory overhead cost. a. True b. False ANSWER: True DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 31. Factory overhead cost is sometimes referred to as factory burden. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 32. Conversion cost is the combination of direct labor cost and factory overhead cost. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic

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    Chapter 1 - Introduction to Managerial Accounting. Copyright Cengage Learning. Powered by Cognero. Page 9 33. Conversion cost is the combination of direct materials cost and factory overhead cost. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 34. Factory overhead is an example of a product cost. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 35. Direct labor costs are included in the conversion costs of a product. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 36. The costs of materials and labor that do not enter directly into the finished product are classified as factory overhead. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 37. The costs of materials and labor that do not enter directly into the finished product are classified as cost of goods sold. a. True

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    Chapter 1 - Introduction to Managerial Accounting. Copyright Cengage Learning. Powered by Cognero. Page 10 b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 38. Indirect labor would be included in factory overhead. a. True b. False ANSWER: True DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 39. A cost object indicates how costs are related or identified. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 40. Direct costs can be specifically traced to a cost object. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 41. Indirect costs can be specifically traced to a cost object. a. True b. False ANSWER: False DIFFICULTY: Easy

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    Chapter 1 - Introduction to Managerial Accounting. Copyright Cengage Learning. Powered by Cognero. Page 11 Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 42. Period (nonmanufacturing) costs are classified into two categories: selling and administrative. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 43. Prime costs are the combination of direct labor costs and factory overhead costs. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 44. Prime costs are the combination of direct materials and direct labor costs. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 45. Conversion costs are the combination of direct labor, direct material, and factory overhead costs. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs

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    Chapter 1 - Introduction to Managerial Accounting. Copyright Cengage Learning. Powered by Cognero. Page 12 ACCT.IMA.07 - Cost Management BUSPROG: Analytic 46. Manufacturers use machinery and labor to convert direct materials into finished products. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 47. Period costs include direct materials and direct labor. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 48. Period costs can be found on both the balance sheet and the income statement. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 49. Product costs are not expensed until the product is sold. a. True b. False ANSWER: True DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic

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    Chapter 1 - Introduction to Managerial Accounting. Copyright Cengage Learning. Powered by Cognero. Page 13 50. The plant manager’s salary in a manufacturing business would be considered an indirect cost. a. True b. False ANSWER: True DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 51. Operating expenses are product costs and are expensed when the product is sold. a. True b. False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 52. Period costs are operating costs that are expensed in the period in which the goods are sold. a. True b. False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 53. Factory overhead includes all manufacturing costs except direct materials and direct labor. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 54. Labor costs that are directly traceable to the product are part of factory overhead. a. True b. False

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    Chapter 1 - Introduction to Managerial Accounting. Copyright Cengage Learning. Powered by Cognero. Page 14 ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 55. Product costs include direct labor and advertising expense. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 56. Indirect labor and indirect materials would be part of factory overhead. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 57. Prime costs consist of factory overhead and direct labor. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 58. Conversion costs consist of product costs and period costs. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering

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    Chapter 1 - Introduction to Managerial Accounting. Copyright Cengage Learning. Powered by Cognero. Page 15 LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 59. Prime costs consist of direct materials, indirect materials, and direct labor. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 02 - 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 60. Only the value of the inventory that is sold will appear on the income statement. a. True b. False ANSWER: True DIFFICULTY: Bloom's: Remembering Moderate LEARNING OBJECTIVES: MANG.WARD.18.01 - 03 - 01 - 04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 61. On the balance sheet for a manufacturing business, the cost of direct materials, direct labor, and factory overhead are categorized as either materials inventory, work in process inventory, or finished goods inventory. a. True b. False ANSWER: True DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 03 - 01 - 04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs ACCT.IMA.07 - Cost Management BUSPROG: Analytic 62. The statement of cost of goods manufactured is an extension of the income statement for a manufacturing company. a. True b. False ANSWER: True DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: MANG.WARD.18.01 - 03 - 01 - 04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs

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