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ch 1 Indicate whether the statement is true or false. 1. For a construction contractor, the wages of carpenters would be classified as factory overhead cost. a. True b. False 2. 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 3. Only the value of the inventory that is sold will appear on the income statement. a. True b. False 4. A diagram of the operating structure of an organization is called an organization chart. a. True b. False 5. Period costs are operating costs that are expensed in the period in which the goods are sold. a. True b. False 6. Goods that are partway through the manufacturing process, but not yet complete, are referred to as materials inventory. a. True b. False 7. The costs of materials and labor that do not enter directly into the finished product are classified as factory overhead. a. True b. False 8. Prime costs are the combination of direct labor costs and factory overhead costs. a. True
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