Multiple choice:

1. Managerial accounting uses only past data in reports to aid management in the decision making process. True False 2. Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as factory overhead cost. True False 3. Direct labor costs are included in the conversion costs of a product. True False 4. Product costs include direct labor and advertising expense. True False 5. Managers use managerial information to evaluate performance of a company's operation. True False 6. A manufacturer may employ a job order cost system for some of its products and a process cost system for others. True False 7. The current year's advertising costs are normally considered period costs. True False 8. A manufacturing business reports just two types of inventory on its balance sheet: work in process inventory and finished goods inventory. True False 9. A law firm would use a job order cost system to accumulate all of the costs associated with a particular client engagement, such as lawyer time, copying charges, filing fees, and overhead. True False 10. A service organization will not use the job order costing method because it has no direct materials. True False