Chap1 Solman

Chapter 01
Managerial Accounting and Cost Concepts

True / False Questions

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

3. 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

6. 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

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

13. 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

16. The cost of napkins