Reference no: EM132593716

Question 1. Total fixed costs will be the same regardless of activity (True/False)

Question 2. All costs incurred in a merchandising firm are period costs (True/False)

Question 3. In a manufacturing firm, depreciation is always considered product cost for external financial reporting purposes (True/False)

Question 4. 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)

Question 5. Advertising costs are considered product costs for external financial reports since they are incurred in order to promote specific products (True/False)

Question 6. Property taxes and insurance premiums paid on a factory building are examples of manufacturing overhead (True/False)

Question 7. Manufacturing overhead combined with direct materials is known as conversion cost (True/False)

Question 8. If the ending inventory of finished goods is understated, net income will be overstated (True/False)

Question 9. In a manufacturing company, goods available for sale equals the sum of the cost of goods manufactured and the beginning finished goods inventory (True/False)

Question 10. Variable costs are costs whose per unit costs vary as the activity level rises and falls (True/False)

Question 11. On a per unit basis, a fixed cost varies inversely with the level of activity (True/False)

Question 12. When raw materials are used in production, their costs are transferred to the work in process inventory account as direct materials (True/False)

Question 13. As goods are completed their cost is transferred from the Work in Process account to the Finished Goods account where they await sales to customer (True/False)

Question 14. Some companies classify labour fringe benefits for direct labour workers as part of the direct labour cost and some classify these costs as manufacturing overhead (True/False)

Question 15. Budgets provide information to help manage resources and are supported by the financial accounting function (True/False)

Question 16. Consider the following data, Direct labour is N$4 per unit, direct material is N$8 per unit, variable overhead is N$2 per unit, total fixed overheads is N$20 000, number of units produced is 5000. Under variable costing, the variable cost per unit is

a) N$18, b) N$12, c) N$ 14, d) N$