True$/$False and Multiple Choice

$1.$ While managerial accounting emphasizes relevance of accounting information over

reliability, financial accounting emphasizes reliability over relevance.

a$.$ True

b$.$ False

$2.$ All variable costs are always inventoriable or product costs?

a$.$ True

b$.$ False

$3.$ Manufacturing overhead can be found by subtracting Prime Costs from Total Manufacturing

Costs.

a$.$ True

b$.$ False

$4.$ The same cost may be direct for one cost object and indirect for another cost object.

a$.$ True

b$.$ False

$5.$ Cost of goods sold equals the cost of goods manufactured during the period plus beginning

finished goods inventory minus the finished goods inventory.

a$.$ True

b$.$ False

$6.$ Some fixed costs may be classified as direct manufacturing costs.

a$.$ True

b$.$ False

$7.$ If the balance of the ending finished goods inventory is greater than the beginning balance of

finished goods inventory, then the cost of goods sold will be less than total manufacturing

costs for the period.

a$.$ True

b$.$ False

$8.$ Average costs increase when the level of activity increases.

a$.$ True

b$.$ False

$9.$ Within the relevant range:

a$.$ variable cost per unit decreases as production decreases.

b$.$ fixed cost per unit increases as production decreases.

c$.$ fixed cost per unit decreases as production decreases.

d$.$ variable cost per unit increases as production decreases.

$10.$ Joseph Davis worked $44$ hours last week for Breakgood Manufacturing. Of the $44$ hours $4$

hours were considered overtime, and also Davis was idle for $5$ of the $44$ hours due to an

equipment malfunction. Davis makes $$20$ per hour and is paid $$30$ an hour $($time and a half$)$

for overtime. Davis' total compensation for that week would be reported as:

a$.$ $$800$ of direct labor and $$40$ of manufacturing overhead

b$.$ $$700$ of direct labor and $$140$ of manufacturing overhead

c$.$ $$880$ of direct labor and $$40$ of manufacturing overhead

d$.$ $$780$ of direct labor and $$140$ of manufacturing overhead