ACCT 2301 Introduction to Managerial Accounting Brewer 6th Edition 2022.

ACCT 2301 Introduction to Managerial Accounting Brewer 6th Edition 2022. Introduction to Managerial Accounting Brewer 6th Edition Test Bank Click here to download the solutions manual / test bank INSTANTLY!!! Name: Introduction to Managerial Accounting Author: Brewer Garrison Noreen Edition: 6th ISBN­10: 9 Type: Test Bank This is a sample chapter c h 0 1 Student: 1.Direct material costs are generally variable costs. True False 2.Property taxes and insurance premiums paid on a factory building are examples of manufacturing overhead. True False 3.Manufacturing overhead combined with direct materials is known as conversion cost. True False 4.All costs incurred in a merchandising firm are considered to be period costs. True False 5.Depreciation is always considered a product cost for external financial reporting purposes in a manufacturing firm. True False 6.In external financial reports, factory utilities costs may be included in an asset account on the balance sheet at the end of the period. True False 7.Advertising costs are considered product costs for external financial reports because they are incurred in order to promote specific products. True False 8.Selling and administrative expenses are product costs under generally accepted accounting principles. Introduction to Managerial Accounting Brewer 6th Edition Test Bank Introduction to Managerial Accounting Brewer 6th Edition Test Bank True False 9.A variable cost is a cost whose cost per unit varies as the activity level rises and falls. True False 10. When the level of activity increases, total variable cost will increase. True False 11. A decrease in production will ordinarily result in an increase in fixed production costs per unit. True False 12. Automation results in a shift away from variable costs toward more fixed costs. True False 13. In order for a cost to be variable it must vary with either units produced or units sold. True False 14. The concept of the relevant range does not apply to fixed costs. True False 15. Indirect costs, such as manufacturing overhead, are always fixed costs. True False 16. Discretionary fixed costs arise from annual decisions by management to spend in certain fixed cost areas. True False Introduction to Managerial Accounting Brewer 6th Edition Test Bank Introduction to Managerial Accounting Brewer 6th Edition Test Bank 17. Even if operations are interrupted or cut back, committed fixed costs remain largely unchanged in the short term because the costs of restoring them later are likely to be far greater than any short-run savings that might be realized. True False 18. Committed fixed costs are fixed costs that are not controllable. True False 19. A mixed cost is partially variable and partially fixed. True False 20. Traditional format income statements are prepared primarily for external reporting purposes. True False 21. In a contribution format income statement, sales minus cost of goods sold equals the gross margin. True False 22. In a traditional format income statement for a merchandising company, the cost of goods sold reports the product costs attached to the merchandise sold during the period. True False 23. Although the contribution format income statement is useful for external reporting purposes, it has serious limitations when used for internal purposes because it does not distinguish between fixed and variable costs. True False 24. In a contribution format income statement for a merchandising company, cost of goods sold is a variable cost that gets included in the "Variable expenses" portion of the income statement. True False 25. The traditional format income statement is used as an internal planning and decision-making tool. Its emphasis on cost behavior aids cost-volume-profit analysis, management performance appraisals, and budgeting. True False 26. The following would typically be considered indirect costs of manufacturing a particular Boeing 747 to be delivered to Singapore Airlines: electricity to run production equipment, the factory manager's salary, and the cost of the General Electric jet engines installed on the aircraft. True False 27. The following costs should be considered direct costs of providing delivery room services to a particular mother and her baby: the costs of drugs administered in the operating room, the attending physician's fees, and a portion of the liability insurance carried by the hospital to cover the delivery room. True False 28. The following costs should be considered by a law firm to be indirect costs of defending a particular client in court: rent on the law firm's offices, the law firm's receptionist's wages, the costs of heating the law firm's offices, and the depreciation on the personal computer in the office of the attorney who has been assigned the client. True False 29. In any decision making situation, sunk costs are irrelevant and should be ignored. True False 30. For a lamp manufacturing company, the cost of the insurance on its vehicles that deliver lamps to customers is best described as a: Introduction to Managerial Accounting Brewer 6th Edition Test Bank Introduction to Managerial Accounting Brewer 6th Edition Test Bank A. prime cost. B. manufacturing overhead cost. C. period cost. D. differential (incremental) cost of a lamp. Introduction to Managerial Accounting Brewer 6th Edition Test Bank Introduction to Managerial Accounting Brewer 6th Edition Test Bank 31. The cost of leasing production equipment is classified as: A. Option A B. Option B C. Option C D. Option D 32. The wages of factory maintenance personnel would usually be considered to be: A. Option A B. Option B C. Option C D. Option D 33. Manufacturing overhead consists of: A. all manufacturing costs. B. indirect materials but not indirect labor. C. all manufacturing costs, except direct materials and direct labor. D. indirect labor but not indirect materials. 34. Which of the following should NOT be included as part of manufacturing overhead at a company that makes office furniture? A. sheet steel in a file cabinet made by the company. B. manufacturing equipment depreciation. C. idle time for direct labor. D. taxes on a factory building. 35. Which of the following costs would not be included as part of manufacturing overhead? A. Insurance on sales vehicles. B. Depreciation of production equipment. C. Lubricants for production equipment. D. Direct labor overtime premium. 36. Conversion cost consists of which of the following? A. Manufacturing overhead cost. B. Direct materials and direct labor cost. C. Direct labor cost. D. Direct labor and manufacturing overhead cost. 37. The advertising costs that Pepsi incurred to air its commercials during the Super Bowl can best be described as a: A. variable cost. B. fixed cost. C. product cost. D. prime cost. Introduction to Managerial Accounting Brewer 6th Edition Test Bank Introduction to Managerial Accounting Brewer 6th Edition Test Bank 38. Each of the following would be a period cost except: A. the salary of the company president's secretary. B. the cost of a general accounting office. C. depreciation of a machine used in manufacturing. D. sales commissions. 39. Which of the following costs is an example of a period rather than a product cost? A. Depreciation on production equipment. B. Wages of salespersons. C. Wages of production machine operators. D. Insurance on production equipment. 40. Which of the following would be considered a product cost for external financial reporting purposes? A. Cost of a warehouse used to store finished goods. B. Cost of guided public tours through the company's facilities. C. Cost of travel necessary to sell the manufactured product. D. Cost of sand spread on the factory floor to absorb oil from manufacturing machines. 41. Which of the following would NOT be treated as a product cost for external financial reporting purposes? A. Depreciation on a factory building. B. Salaries of factory workers. C. Indirect labor in the factory. D. Advertising expenses. 42. The salary of the president of a manufacturing company would be classified as which of the following? A. Product cost B. Period cost C. Manufacturing overhead D. Direct labor 43. Conversion costs do NOT include: A. depreciation. B. direct materials. C. indirect labor. D. indirect materials. 44. Last month, when 10,000 units of a product were manufactured, the cost per unit was $60. At this level of activity, variable costs are 50% of total unit costs. If 10,500 units are manufactured next month and cost behavior patterns remain unchanged the: A. total variable cost will remain unchanged. B. fixed costs will increase in total. C. variable cost per unit will increase. D. total cost per unit will decrease.