, TESTBANKFOR Managerial Accounting for Business Leaders 1st Edition
Warren
Important Notes
The file includes the complete test bank, organized chapter by chapter.
A sample of selected pages has been provided for preview.
All available appendices and Excel files (if included in the original resources) are
provided.
We continuously update our files to ensure you receive the latest and most accurate
editions.
New editions are added regularly – stay connected for updates!
✅ Why Buy From Us?
📚 Complete & organized chapter-by-chapter – no missing content, no guessing.
⚡ Instant digital delivery – get your file the moment you pay, no waiting.
📅 Always up to date – we track new editions so you always get the latest version.
💬 Friendly support – real humans ready to help, anytime you need us.
🔒 Safe & secure – thousands of satisfied students trust us every semester.
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correct version, free of charge.
⏰ 24/7 Support: We are always here – reach out anytime and expect a fast response.
Contact Email:
,Name: Class: Date:
Chapter 1 Introduction to Managerial Accounting
True / False
1. Managerial accounting reports must be prepared according to generally accepted accounting principles.
a. True
b. False
ANSWER: False
2. Managerial accounting uses only past data in reports to aid management in the decision-making process.
a. True
b. False
ANSWER: False
3. Managerial accounting information includes both historical and estimated data.
a. True
b. False
ANSWER: True
4. Finance and accounting professionals often work within vertical business units and other horizontal departments, but
they do not normally report directly to the heads of those business units or departments.
a. True
b. False
ANSWER: True
5. The philosophy of focusing on “unexpected” good or bad performance is called management by exception.
a. True
b. False
ANSWER: True
6. The functions reporting to the CFO sometimes are grouped together and referred to as corporate finance.
a. True
b. False
ANSWER: True
7. In smaller companies, the term controller may be used to refer to the chief financial officer.
a. True
b. False
ANSWER: True
Copyright Cengage Learning. Powered by Cognero. Page 1
,Name: Class: Date:
Chapter 1 Introduction to Managerial Accounting
8. The role of horizontals is to provide services, assistance, and advice to the various verticals and other horizontal
departments.
a. True
b. False
ANSWER: True
9. Horizontals are departments within a company that are responsible for developing products.
a. True
b. False
ANSWER: False
10. While no two company structures are identical, most large companies are organized in terms of verticals and
diagonals.
a. True
b. False
ANSWER: False
11. Verticals prepare their own income statements.
a. True
b. False
ANSWER: True
12. Managerial accounting reports are designed to meet the specific needs of a company’s management.
a. True
b. False
ANSWER: True
13. Strategic planning is the process of monitoring operating results and comparing actual results with the expected
results.
a. True
b. False
ANSWER: False
14. Operational planning is the process of developing the company’s short-term objectives and actions needed to achieve
the company’s long-term, strategic objectives.
a. True
b. False
ANSWER: True
Copyright Cengage Learning. Powered by Cognero. Page 2
,Name: Class: Date:
Chapter 1 Introduction to Managerial Accounting
15. Control is the process of choosing goals and deciding how to achieve them.
a. True
b. False
ANSWER: False
16. Evaluation is the process by which management monitors operations by comparing actual and expected results.
a. True
b. False
ANSWER: True
17. A major focus of managerial accounting is the development of costing information.
a. True
b. False
ANSWER: True
18. Managerial accounting information is for external users as well as company managers.
a. True
b. False
ANSWER: False
19. A report analyzing how many products need to be sold to cover operating costs is not typically a managerial
accounting report.
a. True
b. False
ANSWER: False
20. A report analyzing the dollar savings of purchasing new equipment to speed up the production process is a
managerial accounting report.
a. True
b. False
ANSWER: True
21. A performance report that identifies the amount of employee downtime is a financial accounting report.
a. True
b. False
ANSWER: False
Copyright Cengage Learning. Powered by Cognero. Page 3
,Name: Class: Date:
Chapter 1 Introduction to Managerial Accounting
22. Managerial accounting provides useful information to managers on product costs.
a. True
b. False
ANSWER: True
23. In a service company, the cost of services is accumulated and reported as inventory.
a. True
b. False
ANSWER: False
24. A cost is a sacrifice made to obtain some benefit.
a. True
b. False
ANSWER: True
25. The cost of a manufactured product generally consists of direct materials cost, direct labor cost, and manufacturing
overhead cost.
a. True
b. False
ANSWER: True
26. The cost of materials entering directly into the manufacturing process is classified as manufacturing overhead cost.
a. True
b. False
ANSWER: False
27. The cost of wages paid to employees directly involved in converting materials to finished product is classified as
direct labor cost.
a. True
b. False
ANSWER: True
28. If the cost of employee wages is not a significant portion of the total product cost, the wages are classified as direct
materials cost.
a. True
b. False
ANSWER: False
Copyright Cengage Learning. Powered by Cognero. Page 4
,Name: Class: Date:
Chapter 1 Introduction to Managerial Accounting
29. For a construction contractor, the wages of carpenters utilized in constructing a building would be classified as
overhead cost.
a. True
b. False
ANSWER: False
30. For an automotive repair shop, the wages of mechanics working on the vehicles would be classified as direct labor
cost.
a. True
b. False
ANSWER: True
31. Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as
manufacturing overhead cost.
a. True
b. False
ANSWER: True
32. Depreciation on factory plant and equipment is an example of manufacturing overhead cost.
a. True
b. False
ANSWER: True
33. The cost of oil used to lubricate factory machinery and equipment is an example of a direct materials cost.
a. True
b. False
ANSWER: False
34. If the cost of materials is not a significant portion of the total product cost, the materials may be classified as part of
manufacturing overhead cost.
a. True
b. False
ANSWER: True
35. Manufacturing overhead cost is sometimes referred to as factory burden.
a. True
b. False
ANSWER: True
Copyright Cengage Learning. Powered by Cognero. Page 5
,Name: Class: Date:
Chapter 1 Introduction to Managerial Accounting
36. Conversion cost is the combination of direct labor cost and manufacturing overhead cost.
a. True
b. False
ANSWER: True
37. Conversion cost is the combination of direct materials cost and manufacturing overhead cost.
a. True
b. False
ANSWER: False
38. Manufacturing overhead is an example of a product cost.
a. True
b. False
ANSWER: True
39. Direct labor costs are included in the conversion costs of a product.
a. True
b. False
ANSWER: True
40. The costs of materials and labor that cannot be traced directly to the finished product are classified as manufacturing
overhead.
a. True
b. False
ANSWER: True
41. The costs of materials and labor that cannot be traced directly to the finished product are classified as cost of goods
sold.
a. True
b. False
ANSWER: False
42. Indirect labor would be included in manufacturing overhead.
a. True
b. False
ANSWER: True
Copyright Cengage Learning. Powered by Cognero. Page 6
,Name: Class: Date:
Chapter 1 Introduction to Managerial Accounting
43. A cost object can be anything to which costs are assigned and will vary depending upon the decision-making needs
of management.
a. True
b. False
ANSWER: True
44. Direct costs are identified with and can be traced to a cost object.
a. True
b. False
ANSWER: True
45. Indirect costs are identified with and can be traced to a cost object.
a. True
b. False
ANSWER: False
46. Period (nonmanufacturing) costs are classified into two categories: selling and administrative.
a. True
b. False
ANSWER: True
47. Prime costs are the combination of direct labor costs and manufacturing overhead costs.
a. True
b. False
ANSWER: False
48. Prime costs are the combination of direct materials and direct labor costs.
a. True
b. False
ANSWER: True
49. Conversion costs are the combination of direct labor, direct materials, and manufacturing overhead costs.
a. True
b. False
ANSWER: False
50. Manufacturers use machinery and labor to convert direct materials into finished products.
a. True
b. False
ANSWER: True
Copyright Cengage Learning. Powered by Cognero. Page 7
, Name: Class: Date:
Chapter 1 Introduction to Managerial Accounting
51. Period costs include direct materials and direct labor.
a. True
b. False
ANSWER: False
52. Period costs can be found on both the balance sheet and the income statement.
a. True
b. False
ANSWER: False
53. Product costs are not expensed until the product is sold.
a. True
b. False
ANSWER: True
54. The plant manager’s salary in a manufacturing business would be considered an indirect cost.
a. True
b. False
ANSWER: True
55. Operating expenses are product costs and are expensed when the product is sold.
a. True
b. False
ANSWER: False
56. Period costs are operating costs that are expensed in the period in which the goods are sold.
a. True
b. False
ANSWER: False
57. Manufacturing overhead includes all manufacturing costs other than direct materials and direct labor.
a. True
b. False
ANSWER: True
58. Labor costs that are directly traceable to the product are part of manufacturing overhead.
a. True
b. False
ANSWER: False
Copyright Cengage Learning. Powered by Cognero. Page 8
Warren
Important Notes
The file includes the complete test bank, organized chapter by chapter.
A sample of selected pages has been provided for preview.
All available appendices and Excel files (if included in the original resources) are
provided.
We continuously update our files to ensure you receive the latest and most accurate
editions.
New editions are added regularly – stay connected for updates!
✅ Why Buy From Us?
📚 Complete & organized chapter-by-chapter – no missing content, no guessing.
⚡ Instant digital delivery – get your file the moment you pay, no waiting.
📅 Always up to date – we track new editions so you always get the latest version.
💬 Friendly support – real humans ready to help, anytime you need us.
🔒 Safe & secure – thousands of satisfied students trust us every semester.
🛡️Our Guarantees
💰 Money-Back Guarantee: Not satisfied? We offer a full refund – no questions asked.
🔄 Wrong File? No Problem: Contact us and we will replace it immediately with the
correct version, free of charge.
⏰ 24/7 Support: We are always here – reach out anytime and expect a fast response.
Contact Email:
,Name: Class: Date:
Chapter 1 Introduction to Managerial Accounting
True / False
1. Managerial accounting reports must be prepared according to generally accepted accounting principles.
a. True
b. False
ANSWER: False
2. Managerial accounting uses only past data in reports to aid management in the decision-making process.
a. True
b. False
ANSWER: False
3. Managerial accounting information includes both historical and estimated data.
a. True
b. False
ANSWER: True
4. Finance and accounting professionals often work within vertical business units and other horizontal departments, but
they do not normally report directly to the heads of those business units or departments.
a. True
b. False
ANSWER: True
5. The philosophy of focusing on “unexpected” good or bad performance is called management by exception.
a. True
b. False
ANSWER: True
6. The functions reporting to the CFO sometimes are grouped together and referred to as corporate finance.
a. True
b. False
ANSWER: True
7. In smaller companies, the term controller may be used to refer to the chief financial officer.
a. True
b. False
ANSWER: True
Copyright Cengage Learning. Powered by Cognero. Page 1
,Name: Class: Date:
Chapter 1 Introduction to Managerial Accounting
8. The role of horizontals is to provide services, assistance, and advice to the various verticals and other horizontal
departments.
a. True
b. False
ANSWER: True
9. Horizontals are departments within a company that are responsible for developing products.
a. True
b. False
ANSWER: False
10. While no two company structures are identical, most large companies are organized in terms of verticals and
diagonals.
a. True
b. False
ANSWER: False
11. Verticals prepare their own income statements.
a. True
b. False
ANSWER: True
12. Managerial accounting reports are designed to meet the specific needs of a company’s management.
a. True
b. False
ANSWER: True
13. Strategic planning is the process of monitoring operating results and comparing actual results with the expected
results.
a. True
b. False
ANSWER: False
14. Operational planning is the process of developing the company’s short-term objectives and actions needed to achieve
the company’s long-term, strategic objectives.
a. True
b. False
ANSWER: True
Copyright Cengage Learning. Powered by Cognero. Page 2
,Name: Class: Date:
Chapter 1 Introduction to Managerial Accounting
15. Control is the process of choosing goals and deciding how to achieve them.
a. True
b. False
ANSWER: False
16. Evaluation is the process by which management monitors operations by comparing actual and expected results.
a. True
b. False
ANSWER: True
17. A major focus of managerial accounting is the development of costing information.
a. True
b. False
ANSWER: True
18. Managerial accounting information is for external users as well as company managers.
a. True
b. False
ANSWER: False
19. A report analyzing how many products need to be sold to cover operating costs is not typically a managerial
accounting report.
a. True
b. False
ANSWER: False
20. A report analyzing the dollar savings of purchasing new equipment to speed up the production process is a
managerial accounting report.
a. True
b. False
ANSWER: True
21. A performance report that identifies the amount of employee downtime is a financial accounting report.
a. True
b. False
ANSWER: False
Copyright Cengage Learning. Powered by Cognero. Page 3
,Name: Class: Date:
Chapter 1 Introduction to Managerial Accounting
22. Managerial accounting provides useful information to managers on product costs.
a. True
b. False
ANSWER: True
23. In a service company, the cost of services is accumulated and reported as inventory.
a. True
b. False
ANSWER: False
24. A cost is a sacrifice made to obtain some benefit.
a. True
b. False
ANSWER: True
25. The cost of a manufactured product generally consists of direct materials cost, direct labor cost, and manufacturing
overhead cost.
a. True
b. False
ANSWER: True
26. The cost of materials entering directly into the manufacturing process is classified as manufacturing overhead cost.
a. True
b. False
ANSWER: False
27. The cost of wages paid to employees directly involved in converting materials to finished product is classified as
direct labor cost.
a. True
b. False
ANSWER: True
28. If the cost of employee wages is not a significant portion of the total product cost, the wages are classified as direct
materials cost.
a. True
b. False
ANSWER: False
Copyright Cengage Learning. Powered by Cognero. Page 4
,Name: Class: Date:
Chapter 1 Introduction to Managerial Accounting
29. For a construction contractor, the wages of carpenters utilized in constructing a building would be classified as
overhead cost.
a. True
b. False
ANSWER: False
30. For an automotive repair shop, the wages of mechanics working on the vehicles would be classified as direct labor
cost.
a. True
b. False
ANSWER: True
31. Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as
manufacturing overhead cost.
a. True
b. False
ANSWER: True
32. Depreciation on factory plant and equipment is an example of manufacturing overhead cost.
a. True
b. False
ANSWER: True
33. The cost of oil used to lubricate factory machinery and equipment is an example of a direct materials cost.
a. True
b. False
ANSWER: False
34. If the cost of materials is not a significant portion of the total product cost, the materials may be classified as part of
manufacturing overhead cost.
a. True
b. False
ANSWER: True
35. Manufacturing overhead cost is sometimes referred to as factory burden.
a. True
b. False
ANSWER: True
Copyright Cengage Learning. Powered by Cognero. Page 5
,Name: Class: Date:
Chapter 1 Introduction to Managerial Accounting
36. Conversion cost is the combination of direct labor cost and manufacturing overhead cost.
a. True
b. False
ANSWER: True
37. Conversion cost is the combination of direct materials cost and manufacturing overhead cost.
a. True
b. False
ANSWER: False
38. Manufacturing overhead is an example of a product cost.
a. True
b. False
ANSWER: True
39. Direct labor costs are included in the conversion costs of a product.
a. True
b. False
ANSWER: True
40. The costs of materials and labor that cannot be traced directly to the finished product are classified as manufacturing
overhead.
a. True
b. False
ANSWER: True
41. The costs of materials and labor that cannot be traced directly to the finished product are classified as cost of goods
sold.
a. True
b. False
ANSWER: False
42. Indirect labor would be included in manufacturing overhead.
a. True
b. False
ANSWER: True
Copyright Cengage Learning. Powered by Cognero. Page 6
,Name: Class: Date:
Chapter 1 Introduction to Managerial Accounting
43. A cost object can be anything to which costs are assigned and will vary depending upon the decision-making needs
of management.
a. True
b. False
ANSWER: True
44. Direct costs are identified with and can be traced to a cost object.
a. True
b. False
ANSWER: True
45. Indirect costs are identified with and can be traced to a cost object.
a. True
b. False
ANSWER: False
46. Period (nonmanufacturing) costs are classified into two categories: selling and administrative.
a. True
b. False
ANSWER: True
47. Prime costs are the combination of direct labor costs and manufacturing overhead costs.
a. True
b. False
ANSWER: False
48. Prime costs are the combination of direct materials and direct labor costs.
a. True
b. False
ANSWER: True
49. Conversion costs are the combination of direct labor, direct materials, and manufacturing overhead costs.
a. True
b. False
ANSWER: False
50. Manufacturers use machinery and labor to convert direct materials into finished products.
a. True
b. False
ANSWER: True
Copyright Cengage Learning. Powered by Cognero. Page 7
, Name: Class: Date:
Chapter 1 Introduction to Managerial Accounting
51. Period costs include direct materials and direct labor.
a. True
b. False
ANSWER: False
52. Period costs can be found on both the balance sheet and the income statement.
a. True
b. False
ANSWER: False
53. Product costs are not expensed until the product is sold.
a. True
b. False
ANSWER: True
54. The plant manager’s salary in a manufacturing business would be considered an indirect cost.
a. True
b. False
ANSWER: True
55. Operating expenses are product costs and are expensed when the product is sold.
a. True
b. False
ANSWER: False
56. Period costs are operating costs that are expensed in the period in which the goods are sold.
a. True
b. False
ANSWER: False
57. Manufacturing overhead includes all manufacturing costs other than direct materials and direct labor.
a. True
b. False
ANSWER: True
58. Labor costs that are directly traceable to the product are part of manufacturing overhead.
a. True
b. False
ANSWER: False
Copyright Cengage Learning. Powered by Cognero. Page 8
