Administrative costs are nonmanufacturing costs that include the costs of top administrative functions and various staff departments such as accounting, data processing, and personnel.

True

False

2 points

Question 2

The cost of direct materials to make automobiles would include the cost of the windshields.

True

False

2 points

Question 3

The sum of direct materials, direct labor, and manufacturing overhead are included in product cost.

True

False

2 points

Question 4

Coronado Company's total costs amounted to $40,000 for direct materials, direct labor, and manufacturing overhead in producing 10,000 headphones during the year. Selling costs were $6,000 and administrative costs were $5,000, and 7,000 headsets were sold. The amount expensed on the income statement for the year would include product and period costs of:

	A.	$35,000 product and $6,000 period.
	B.	$40,000 product and $5,000 period.
	C.	$28,000 product and $11,000 period.
	D.	$40,000 product and $11,000 period.

2 points

Question 5

Period costs would include which of the following?

	A.	Advertising costs per year
	B.	Overtime premium paid to production workers
	C.	Annual depreciation on factory equipment
	D.	Insurance premium on plant

2 points

Question 6

Management accounting seeks to provide useful information primarily to those outside an organization.

True

False

2 points

Question 7

The cost of manufacturing a product includes all of the following except:

	A.	direct labor.
	B.	direct materials.
	C.	manufacturing overhead.
	D.	selling expenses.

2 points

Question 8

Fixed costs vary directly in total amount with changes in the volume of production activity or output.

True

False

2 points

Question 9

Direct labor cost includes wages paid to:

	A.	sales managers.
	B.	production machine operators.
	C.	the company president.
	D.	factory supervisors.