Test Bank for Managerial
Accounting, 13th Canadian
Edition
The cost of beginning work in process plus the total manufacturing costs for the current
period is the cost of goods manufactured - ANSWERSFalse
Fixed costs are costs that remain the same per unit regardless of changes in the activity level
- ANSWERSFalse
Both direct and indirect materials may physically become part of the finished product True -
ANSWERSTrue
Product costs are costs that are a necessary and integral part of producing the finished
product - ANSWERSTrue
Raw materials inventory is not an asset until it is used to make a product False -
ANSWERSFalse
The high-low method is a quick means of separating fixed and variable costs - ANSWERSTrue
Raw materials are equal to direct materials - ANSWERSFalse
Manufacturing costs that cannot be classified as direct material or direct labour are
classified as operating expenses - ANSWERSFalse
What the high-low method may lack in precision, it makes up for in efficiency and ease of
use - ANSWERSTrue
If the ending work in process inventory is less than the beginning work in process inventory,
then the cost of goods manufactured will be less than total manufacturing costs for the
period - ANSWERSFalse
, In which of the following categories do indirect materials belong - ANSWERSProduct Cost
and Manufacturing Overhead
Which one of the following represents a period cost - ANSWERSCompany advertisement
Which of the following would most likely be viewed as indirect materials - ANSWERSAxle
grease associated with the suspension of a new car
Which of the following is considered manufacturing overhead - ANSWERSDepreciation on
the press that moulds the plastic into work in process
Which of the following are period costs - ANSWERSWorkers wages in the shipping
department
Which of the following is true - ANSWERSWithin the relevant range a valid argument can be
made for the assumption of linearity of variable cost
Examples of fixed costs include all but one of the following - ANSWERSCost of a car rental
which includes a fee per km driven
Which of the following would most likely be considered direct labour - ANSWERSA worker
installing components in a computer
Fees for office telephones are - ANSWERSMixed period costs
A curvilinear relationship between variable costs and changes in activity levels suggests
what? - ANSWERSSince the relationship between activity levels and variable costs is linear
within the relevant range and less linear at lower and higher levels outside the relevant
range, the straight-line (linear) relationship takes on a curvature in the real world
The high-low method - ANSWERSis a useful means of separating fixed and variable elements
from a mixed cost
Accounting, 13th Canadian
Edition
The cost of beginning work in process plus the total manufacturing costs for the current
period is the cost of goods manufactured - ANSWERSFalse
Fixed costs are costs that remain the same per unit regardless of changes in the activity level
- ANSWERSFalse
Both direct and indirect materials may physically become part of the finished product True -
ANSWERSTrue
Product costs are costs that are a necessary and integral part of producing the finished
product - ANSWERSTrue
Raw materials inventory is not an asset until it is used to make a product False -
ANSWERSFalse
The high-low method is a quick means of separating fixed and variable costs - ANSWERSTrue
Raw materials are equal to direct materials - ANSWERSFalse
Manufacturing costs that cannot be classified as direct material or direct labour are
classified as operating expenses - ANSWERSFalse
What the high-low method may lack in precision, it makes up for in efficiency and ease of
use - ANSWERSTrue
If the ending work in process inventory is less than the beginning work in process inventory,
then the cost of goods manufactured will be less than total manufacturing costs for the
period - ANSWERSFalse
, In which of the following categories do indirect materials belong - ANSWERSProduct Cost
and Manufacturing Overhead
Which one of the following represents a period cost - ANSWERSCompany advertisement
Which of the following would most likely be viewed as indirect materials - ANSWERSAxle
grease associated with the suspension of a new car
Which of the following is considered manufacturing overhead - ANSWERSDepreciation on
the press that moulds the plastic into work in process
Which of the following are period costs - ANSWERSWorkers wages in the shipping
department
Which of the following is true - ANSWERSWithin the relevant range a valid argument can be
made for the assumption of linearity of variable cost
Examples of fixed costs include all but one of the following - ANSWERSCost of a car rental
which includes a fee per km driven
Which of the following would most likely be considered direct labour - ANSWERSA worker
installing components in a computer
Fees for office telephones are - ANSWERSMixed period costs
A curvilinear relationship between variable costs and changes in activity levels suggests
what? - ANSWERSSince the relationship between activity levels and variable costs is linear
within the relevant range and less linear at lower and higher levels outside the relevant
range, the straight-line (linear) relationship takes on a curvature in the real world
The high-low method - ANSWERSis a useful means of separating fixed and variable elements
from a mixed cost
