TRUE OR FALSE

1. Conversion costs involve accounting for costs related to converting the raw materials into finished goods

2. Prime costs include the cost of direct materials, direct labor and factory overhead.

3. Cost accounting has a more specific scope than managerial and financial accounting,

4. Manufacturing overhead costs are costs related to completing the products but whose quantity may not be specifically identified on a per item basis thus shared by all the products manufactured based on a specified percentage or ratio

5. Cost accounting involves accounting for product costs while managerial accounting involves accounting for period costs.

7. A service business does not use cost accounting.

9. The salary of a janitor who is responsible for cleaning the entire company is both a product and a period cost

11.Creating budgets are not related to cost accounting work.

13. The cost of scrap materials is considered as an additional expense of the company

14. The order point is the optimal quantity of inventory to be held at a time

15. First in, first out or FIFO is an ideal method for following the flow of cost of inventories

16. The main purpose of materials costing is to help determine the actual costs associated with producing products/services, so as to help managers make better decisions about pricing and allocating resources for the company's future.

18. Scrap materials are waste materials from raw materials inventory that do not provide any value to the company.

19. Manufacturing overhead is a product cost, while factory overhead is not

20. The economic order quantity is the optimal quantity that should be placed per order

21. Cost accounting activities do not help in determining whether costs of products may still be reduced

22. Having accurate accounting records is a form of physical control on the materials inventory

23. The standard costing method is applicable to use if there are predetermined cost that the company has studied to approximate the actual costs of materials.

24. Cost accounting examines the cost structure, costs and cost objects associated with the company's activities

25. Process costing is normally applicable to interchangeable items and liquid items, among others.