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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
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
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: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
3
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
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
4
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
11) Conversion cost is the sum of direct labor cost and manufacturing overhead cost.
Answer: TRUE
Difficulty: 1 Easy
Topic: Cost Classifications for Preparing Financial Statements
Learning Objective: 01-03 Understand cost classifications used to prepare financial statements:
product costs and period costs.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
Answer: FALSE
Difficulty: 1 Easy
Topic: Cost Classifications for Preparing Financial Statements
Learning Objective: 01-03 Understand cost classifications used to prepare financial statements:
product costs and period costs.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
13) Advertising is not considered a product cost even if it promotes a specific product.
Answer: TRUE
Difficulty: 2 Medium
Topic: Cost Classifications for Preparing Financial Statements
Learning Objective: 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
14) Selling and administrative expenses are period costs under generally accepted accounting
principles.
Answer: TRUE
Difficulty: 1 Easy
Topic: Cost Classifications for Preparing Financial Statements
Learning Objective: 01-03 Understand cost classifications used to prepare financial statements:
product costs and period costs.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
5
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
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the job that would bungle it. I've got an idea as to where the Greuze
is hidden, but I know very well that at the first hint of anything going
wrong it would disappear, or be destroyed."
"Then you think that the same people who brought off the
Flurscheim burglary are responsible for the despatch leakage?"
asked the Permanent Secretary.
"Certain of it," declared Inspector Kenly.
"But if you continue to work on my business, isn't what you fear
likely to come to pass? Will not another man be put on to the picture
robbery? Flurscheim will hardly keep silence."
"I'll see after that," answered Kenly. "From what I know of Mr.
Flurscheim he won't let the grass grow under his feet. He is probably
on the way to town now."
"Then what becomes of your plans?" asked the Permanent
Secretary. He could see that the detective had not revealed all that
was in his mind.
"Mr. Flurscheim wants to get his Greuze back undamaged," said
the detective slowly, "and he also wants to punish the man who stole
it. I shall see him directly he arrives in town, and I think I can make it
clear to him that he had better say nothing until I consider the time
ripe for action."
"There's only one thing more," remarked the Permanent
Secretary. "Suppose I think it necessary to ask Captain Marven for
an explanation?"
The detective jumped to his feet with a look of horror on his
face. "Good heavens! Sir Everard," he exclaimed, "you would spoil
everything. You won't do it?"
The Permanent Secretary laughed.
"You may make your mind easy, Kenly," he observed. "I'm too
much of a sportsman for that, I hope."
CHAPTER XX
GUY'S LAST THEFT