5. Which of these statements is NOT true?

A) Direct materials is part of prime costs.

B) Manufacturing overhead is part of conversion costs.

C) Indirect labor is included in both prime and conversion costs.

D) The sum of prime costs and conversion costs does not equal manufacturing (product) costs.

6. What is not considered an administrative cost?

A) Depreciation cost of the CEOs Lamborghini

B) Salary paid to the receptionist at corporate headquarters

C) Cost of shooting a commercial for the companys new product

D) Cost of renting out a club to host a corporate party for the investor relations department

7. The nursing station on the fifth floor of General Hospital is responsible for the care and recovery of cardiovascular surgery patients. The costs of prescription drugs administered by the nursing station to patients should be classified as (remember, these apply to nonmanufacturing companies as well! Think conceptually about the classifications we discussed and you should be able to answer the question):

A) direct patient care costs.

B) direct nursing labor costs.

C) patient care overhead costs of the nursing station.

D) period costs of the hospital.