Indicate whether the following statements are true or false. If false, indicate how to correct the statement.

1. The board of directors has primary responsibility for daily management functions.

2. Financial accounting reports pertain to subunits of the business and are very detailed.

3. Managerial accounting reports must follow GAAP and are audited by CPAs.

4. Managers’ activities and responsibilities can be classified into three broad functions: planning, directing, and controlling.

Identify managerial cost classifications.