Test Bank for Managerial Accounting Tools for Business Decision Making, 17th Edition by Jerry J.

Chapter 02 Managerial Accounting and Cost Concepts Answer Key
n n n n n n n n




Truen/nFalsenQuestions



1. Directnmaterialncostsnarengenerallynvariablencosts.
TRUE


AACSB:nReflectivenThinkingn AI
CPAnBB:nCriticalnThinkingn AICP
AnFN:nMeasurementn Bloom's:nK
nowledge
LearningnObjective:n02-
01nIdentifynandngivenexamplesnofneachnofnthenthreenbasicnmanufacturingncostncategoriesn LearningnObjective:n02-
03nUnderstandncostnbehaviornpatternsnincludingnvariablencosts;nfixedncosts;nandnmixedncostsn Level:nEasy



2. Propertyntaxesnandninsurancenpremiumsnpaidnonnanfactorynbuildingnarenexamplesnofn
manufacturingnoverhead.
TRUE


AACSB:nReflectivenThinkingn AI
CPAnBB:nCriticalnThinkingn AICP
AnFN:nMeasurementn Bloom's:nK
nowledge
LearningnObjective:n02-
01nIdentifynandngivenexamplesnofneachnofnthenthreenbasicnmanufacturingncostncategoriesn Level:nEasy



3. Manufacturingnoverheadncombinednwithndirectnmaterialsnisnknownnasnconversionncost.
FALSE


AACSB:nReflectivenThinkingn AI
CPAnBB:nCriticalnThinkingn AICP
AnFN:nMeasurementn Bloom's:nK
nowledge
LearningnObjective:n02-
01nIdentifynandngivenexamplesnofneachnofnthenthreenbasicnmanufacturingncostncategoriesn Level:nEasy

,4. Allncostsnincurredninnanmerchandisingnfirmnarenconsideredntonbenperiodncosts.
FALSE


AACSB:nReflectivenThinkingn AI
CPAnBB:nCriticalnThinkingn AICP
AnFN:nMeasurementn Bloom's:nK
nowledge
LearningnObjective:n02-
02nDistinguishnbetweennproductncostsnandnperiodncostsnandngivenexamplesnofneachn Level:nEasy



5. Depreciationnisnalwaysnconsiderednanproductncostnfornexternalnfinancialnreportingn
purposesninnanmanufacturingnfirm.
FALSE


AACSB:nReflectivenThinkingn AI
CPAnBB:nCriticalnThinkingn AICP
AnFN:nMeasurementn Bloom's:nC
omprehension
LearningnObjective:n02-
02nDistinguishnbetweennproductncostsnandnperiodncostsnandngivenexamplesnofneachn Level:nMedium



6. Innexternalnfinancialnreports,nfactorynutilitiesncostsnmaynbenincludedninnannassetnaccountno
nnthenbalancensheetnatnthenendnofnthenperiod.
TRUE


AACSB:nReflectivenThinkingn AI
CPAnBB:nCriticalnThinkingn AICP
AnFN:nMeasurementn Bloom's:nC
omprehension
LearningnObjective:n02-
02nDistinguishnbetweennproductncostsnandnperiodncostsnandngivenexamplesnofneachn Level:nHard



7. Advertisingncostsnarenconsiderednproductncostsnfornexternalnfinancialnreportsnbecausent
heynarenincurredninnorderntonpromotenspecificnproducts.
FALSE


AACSB:nReflectivenThinkingn AI
CPAnBB:nCriticalnThinkingn AICP
AnFN:nMeasurementn Bloom's:nC
omprehension
LearningnObjective:n02-
02nDistinguishnbetweennproductncostsnandnperiodncostsnandngivenexamplesnofneachn Level:nMedium

,8. Sellingnandnadministrativenexpensesnarenproductncostsnunderngenerallynacceptedn
accountingnprinciples.
FALSE


AACSB:nReflectivenThinkingn AI
CPAnBB:nCriticalnThinkingn AICP
AnFN:nMeasurementn Bloom's:nK
nowledge
LearningnObjective:n02-
02nDistinguishnbetweennproductncostsnandnperiodncostsnandngivenexamplesnofneachn Level:nEasy



9. Anvariablencostnisnancostnwhosencostnpernunitnvariesnasnthenactivitynlevelnrisesnandnfalls.
FALSE


AACSB:nReflectivenThinkingn AI
CPAnBB:nCriticalnThinkingn AICP
AnFN:nMeasurementn Bloom's:nK
nowledge
LearningnObjective:n02-
03nUnderstandncostnbehaviornpatternsnincludingnvariablencosts;nfixedncosts;nandnmixedncostsn Level:nEasy



10. Whennthenlevelnofnactivitynincreases,ntotalnvariablencostnwillnincrease.
TRUE


AACSB:nReflectivenThinkingn AI
CPAnBB:nCriticalnThinkingn AICP
AnFN:nMeasurementn Bloom's:nK
nowledge
LearningnObjective:n02-
03nUnderstandncostnbehaviornpatternsnincludingnvariablencosts;nfixedncosts;nandnmixedncostsn Level:nEasy



11. Andecreaseninnproductionnwillnordinarilynresultninnannincreaseninnfixednproductionncostsnp
ernunit.
TRUE


AACSB:nAnalytic
AICPAnBB:nCriticalnThinkingn AI
CPAnFN:nMeasurementn Bloom's
:nKnowledge
LearningnObjective:n02-
03nUnderstandncostnbehaviornpatternsnincludingnvariablencosts;nfixedncosts;nandnmixedncostsn Level:nEasy

, 12. Automationnresultsninnanshiftnawaynfromnvariablencostsntowardnmorenfixedncosts.
TRUE


AACSB:nReflectivenThinkingn AI
CPAnBB:nCriticalnThinkingn AICP
AnFN:nMeasurementn Bloom's:nK
nowledge
LearningnObjective:n02-
03nUnderstandncostnbehaviornpatternsnincludingnvariablencosts;nfixedncosts;nandnmixedncostsn Level:nEasy



13. Innordernfornancostntonbenvariablenitnmustnvarynwithneithernunitsnproducednornunitsnsold.
FALSE


AACSB:nReflectivenThinkingn AI
CPAnBB:nCriticalnThinkingn AICP
AnFN:nMeasurementn Bloom's:nC
omprehension
LearningnObjective:n02-
03nUnderstandncostnbehaviornpatternsnincludingnvariablencosts;nfixedncosts;nandnmixedncostsn Level:nMedium



14. Thenconceptnofnthenrelevantnrangendoesnnotnapplyntonfixedncosts.
FALSE


AACSB:nReflectivenThinkingn AI
CPAnBB:nCriticalnThinkingn AICP
AnFN:nMeasurementn Bloom's:nK
nowledge
LearningnObjective:n02-
03nUnderstandncostnbehaviornpatternsnincludingnvariablencosts;nfixedncosts;nandnmixedncostsn Level:nEasy



15. Indirectncosts,nsuchnasnmanufacturingnoverhead,narenalwaysnfixedncosts.
FALSE


AACSB:nReflectivenThinkingn AI
CPAnBB:nCriticalnThinkingn AICP
AnFN:nMeasurementn Bloom's:nC
omprehension
LearningnObjective:n02-
03nUnderstandncostnbehaviornpatternsnincludingnvariablencosts;nfixedncosts;nandnmixedncostsn Level:nMedium