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T1& 2 (Q)-Introduction

True/False Questions

1. The three cost elements ordinarily included in the inventoriable cost of a manufactured product are direct materials, direct labor, and marketing costs.

2. Depreciation on manufacturing equipment is a period cost.

3. Salaries and wages incurred in the factory would be product costs

4. Commissions paid to salespersons are a variable selling expense.

5. Variable costs are costs that vary, in total, in direct proportion to changes in the volume or level of activity.

Multiple Choice Questions

6. The variable portion of the cost of electricity for a manufacturing plant is a:

| |Conversion cost |Period cost |
|A) |Yes |No |
|B) |Yes |Yes |
|C) |No |Yes |
|D) |No |No |

7. An example of a direct labor cost is wages paid to a:

| |Factory machine operator |Supervisor in a factory |
|A) |No |No |
|B) |No |Yes |
|C) |Yes |Yes |
|D) |Yes |No |

8. Which of the following would most likely be included as part of manufacturing overhead in the production of a wooden table? A) The amount paid to the individual who stains the table. B) The commission paid to the salesperson who sold the table. C) The cost of glue used in the table. D) The cost of the wood used in the table.

9. Which of the following statements is correct in describing manufacturing overhead