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Managerial Accounting for Managers, 6e (Noreen) 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.
Answer: TRUE
Difficulty: 2 Medium
Topic: Cost Classifications for Assigning Costs to Cost Objects
Learning Objective: 01-01 Understand cost classifications used for assigning costs to cost
objects: direct costs and indirect costs.
Bloom's: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
2) A direct cost is a cost that can be easily traced to the particular cost object under consideration.
Answer: TRUE
Difficulty: 1 Easy
Topic: Cost Classifications for Assigning Costs to Cost Objects
Learning Objective: 01-01 Understand cost classifications used for assigning costs to cost
objects: direct costs and indirect costs.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
3) A cost can be direct or indirect. The classification can change if the cost object changes.
Answer: TRUE
Difficulty: 2 Medium
Topic: Cost Classifications for Assigning Costs to Cost Objects
Learning Objective: 01-01 Understand cost classifications used for assigning costs to cost
objects: direct costs and indirect costs.
Bloom's: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
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4) Wages paid to production supervisors would be classified as manufacturing overhead.
Answer: TRUE
Difficulty: 1 Easy
Topic: Cost Classifications for Manufacturing Companies
Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing cost categories.
Bloom's: Understand
AACSB: Reflective
Thinking
AICPA: BB Critical Thinking; FN Measurement
5) Selling costs are indirect costs.
Answer: FALSE
Difficulty: 2 Medium
Topic: Cost Classifications for Manufacturing Companies
Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing cost categories.
Bloom's: RememberAACSB
: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
6) The sum of all manufacturing costs except for direct materials and direct labor is called
manufacturing overhead.
Answer: TRUE
Difficulty: 2 Medium
Topic: Cost Classifications for Manufacturing Companies
Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing cost categories.
Bloom's: Understand
AACSB: Reflective
Thinking
AICPA: BB Critical Thinking; FN Measurement
7) The three cost elements ordinarily included in product costs are direct materials, direct labor , and manufacturing overhead.
Answer: TRUE
Difficulty: 1 Easy
Topic: Cost Classifications for Manufacturing Companies
Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing cost categories.
Bloom's: RememberAACSB
: Reflective Thinking
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AICPA: BB Critical Thinking; FN Measurement
8) Administrative costs are indirect costs.
Answer: FALSE
Difficulty: 2 Medium
Topic: Cost Classifications for Manufacturing Companies
Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing cost categories.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
9) Depreciation is always considered a period cost for external financial reporting purposes in a manufacturing company.
Answer: FALSE
Difficulty: 2 Medium
Topic: Cost Classifications for Manufacturing Companies; Cost Classifications for Preparing Financial Statements Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing cost categories.; 01-03 Understand cost classifications used to prepare financial statements: product costs and period costs.
Bloom's: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
10) Opportunity costs at a manufacturing company are not part of manufacturing overhead.
Answer: TRUE
Difficulty: 3 Hard
Topic: Cost Classifications for Manufacturing Companies; Cost Classifications for Decision Making Learning Objective: 01-02 Identify and give examples of each of the three basic manufacturing cost categories.; 01-05 Understand cost classifications used in making decisions: differential costs, sunk costs, and opportunity costs.
Bloom's: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
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