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Chapter 2 - Basic Cost Management Concepts and Accounting for Mass Customization Operations 2-1 Chapter 2 Basic Cost Management Concepts Answer Key True / False Questions
- An important first step in studying managerial accounting is to create a framework for
thinking about the various types of costs incurred by organizations and how those costs are actively managed.
TRUE
AACSB: Analytic
AICPA BB: Critical Thinking
AICPA FN: Measurement
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 02-01
Feedback True: Correct! Thinking about various types of costs and how they are actively managed is an important first step.
Feedback False: This is an important first step.
- Different cost concepts and classifications are used for different purposes.
TRUE
AACSB: Analytic
AICPA BB: Critical Thinking
AICPA FN: Measurement
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 02-01
Feedback True: Correct! Different cost concepts and classifications are used for different purposes.
Feedback False: This is a true statement.
- Inventoriable costs are expensed when incurred.
FALSE
AACSB: Analytic
AICPA BB: Critical Thinking
AICPA FN: Measurement
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 02-02
Feedback True: This statement is incorrect.
Feedback False: Correct! Inventoriable costs are not expensed when incurred.
Managerial Accounting Creating Value in a Dynamic Business Environment 11th Edition Hilton Test Bank Visit TestBankDeal.com to get complete for all chapters
Chapter 2 - Basic Cost Management Concepts and Accounting for Mass Customization Operations 2-2
- Another term for product cost is cost of goods sold.
FALSE
AACSB: Analytic
AICPA BB: Critical Thinking
AICPA FN: Measurement
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 02-02
Feedback True: Product cost is not known as cost of goods sold.
Feedback False: Correct! Product cost is not known as cost of goods sold.
- Finished goods inventory is ordinarily held for sale by a manufacturing company.
TRUE
AACSB: Reflective Thinking
AICPA BB: Industry
AICPA FN: Reporting
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 02-03
Feedback True: Correct! It is true that finished goods inventory is held for sale by a manufacturing company.Feedback False: It is true that finished goods inventory is held for sale by a manufacturing company.
- Selling and administrative costs are always period costs on any type of company’s income
statement.
TRUE
AACSB: Reflective Thinking
AICPA BB: Industry
AICPA FN: Reporting
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 02-03
Feedback True: Correct! It is true that selling and administrative costs are period costs on any type of company’s income statement.Feedback False: It is true that selling and administrative costs are period costs on any type of company’s income statement.
Chapter 2 - Basic Cost Management Concepts and Accounting for Mass Customization Operations 2-3
- There are three standard categories of manufacturing processes.
FALSE
AACSB: Reflective Thinking
AICPA BB: Industry
AICPA FN: Reporting
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 02-04
Feedback True: There are not three standard categories of manufacturing processes.Feedback False: Correct! There are not three standard categories of manufacturing processes.
- A job shop is generally associated with high production volume.
FALSE
AACSB: Reflective Thinking
AICPA BB: Industry
AICPA FN: Reporting
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 02-04
Feedback True: Job shops are not associated with high production volume.
Feedback False: Correct! Job shops are not associated with high production volume.
- Manufacturing costs are classified into four categories.
FALSE
AACSB: Reflective Thinking
AICPA BB: Industry
AICPA FN: Reporting
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 02-05
Feedback True: Manufacturing costs are not classified into four categories.
Feedback False: Correct! Manufacturing costs are not classified into four categories.
Chapter 2 - Basic Cost Management Concepts and Accounting for Mass Customization Operations 2-4
- Indirect labor is not a component of manufacturing overhead.
FALSE
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Measurement
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 02-05
Feedback True: Indirect labor is a component of manufacturing overhead.
Feedback False: Correct! Indirect labor is a component of manufacturing overhead.
- The following equation -- Beginning finished goods + cost of goods manufactured -
ending finished goods -- is used to calculate cost of goods sold during the period.
TRUE
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Measurement
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 02-06
Feedback True: Correct! This is the equation used to calculate cost of goods sold during the period.Feedback False: This is the equation used to calculate cost of goods sold during the period.
- The total cost of direct material, direct labor, and manufacturing overhead transferred
from work-in-process inventory to finished-goods inventory is called the cost of goods manufactured.
TRUE
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Measurement
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 02-06
Feedback True: Correct! Total cost of direct material, direct labor, and manufacturing overhead that is transferred from WIP to finished goods is called cost of goods manufactured.
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