Managerial Accounting and Cost Concepts Chapter 1 Exam

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Chapter 01 Managerial Accounting and Cost Concepts Answer Key  

 

True / False Questions
 

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

 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Reporting
Bloom's: Knowledge
Learning Objective: 1
Level: Easy
 

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

 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Reporting
Bloom's: Comprehension
Learning Objective: 1
Level: Medium
 

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

 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's: Comprehension
Learning Objective: 2
Level: Medium
 

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

 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's: Knowledge
Learning Objective: 2
Level: Easy
 

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

 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's: Knowledge
Learning Objective: 2
Level: Easy
 

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

 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's: Comprehension
Learning Objective: 3
Level: Medium
 

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

 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's: Comprehension
Learning Objective: 3
Level: Medium
 

8. In a manufacturing firm, all costs are product costs. 
FALSE

 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's: Knowledge
Learning Objective: 3
Level: Easy
 

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

 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's: Knowledge
Learning Objective: 3
Level: Easy
 

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

 

AACSB: Analytic
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's: Comprehension
Learning Objective: 4
Learning Objective: 5
Level: Hard
 

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.  FALSE

 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Reporting
Bloom's: Comprehension
Learning Objective: 5
Level: Medium
 

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

 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's: Comprehension
Learning Objective: 5
Level: Medium
 

13. Differential costs can be either fixed or variable. 
TRUE

 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's: Comprehension
Learning Objective: 6
Learning Objective: 8
Level: Medium
 

14. A fixed cost is constant per unit of product. 
FALSE

 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's: Knowledge
Learning Objective: 6
Level: Easy
 

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

 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's:...
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