Question 1 Which of the following statements are true? The sum of all manufacturing costs except for direct materials and direct labor is called manufacturing overhead. The three cost elements ordinarily included in product costs are direct materials, direct labor, and manufacturing overhead.

Only statement II is true.

Both of the statements are true.

Only statement I is true.

Neither of the statements are true. Question 2 Which of the following statements are true? Variable costs per unit are not affected by changes in activity. The relevant range concept is applicable to mixed costs. A variable cost remains constant if expressed on a unit basis. A fixed cost is not constant per unit of product.

Both statement I and II are true.

Both statement II and IV are true.

Only statement III is true.

All statements are true. Question 3 Which of the following statements are true? Depreciation is always considered a period cost for external financial reporting purposes in a manufacturing company. Depreciation on equipment a company uses in its selling and administrative activities would be classified as a period cost.

Only statement II is true.

Both of the statements are true.

Only statement I is true.

Neither of the statements are true.

Question 4 Which of the following statements are true? In a manufacturing company, all costs are period costs. Selling and administrative expenses are period costs under generally accepted accounting principles. The cost of shipping parts from a supplier is considered a period cost.

Statements I and III are true.

Only statement I is true.

Statements I and II are true.

Only statement II is true.