COST ACCOUNTING AND CONTROL
1. Determining the unit cost of manufacturing
a product is an output of financial
accounting.
FALSE
2. All cost incurred in a merchandising firm
are considered to be period costs.
FALSE
3. Depreciation is always considered a
product cost for external financial reporting
purposes in a manufacturing firm.
FALSE
4. Manufacturing overhead combined with
direct materials is known as conversion
cost.
FALSE
5. In manufacturing company, goods
available for sale equals the sum of the
cost of goods manufactured and the
beginning finished goods inventory.
TRUE
6. When goods are sold, the Cost of Goods
Sold account is debited and the Work in
Process Inventory account is credited.
FALSE
7. Variable cost are costs whose per unit cost
may vary as the activity levels rises and
falls.
FALSE
8. On a per unit basis, a fixed cost varies
inversely with the level of activity.
TRUE
9. Manufacturing overhead includes all
manufacturing cost except direct material
and direct labor.
TRUE
10. A cost that differs from one month to
another is known as differential cost.
TRUE
11. The corporate controller’s salary would be
considered a(n):
Administrative Cost
12. The cost of fire insurance for a
manufacturing plant is generally
considered to be:
Product Cost
13. Each of the following would be a period
cost except:
Depreciation of a machine used in
manufacturing
14. Which of the following would NOT be
treated as a product cost for external
financial reporting purposes?
Advertising Expense
15. Manufacturing overhead consists of:
All manufacturing cost, except direct materials
and direct labor
16. If the cost of good sold is greater than the
cost of manufactured, then:
Finished goods inventory has decreased
during the period
17. Last month, when, 10,000 units of a
product where manufactured, the cost per
unit was P60. At this level of activity,
variable cost are 50% of total unit costs, if
10,500 units are manufactured next month
and cost behavior patterns remain
unchanged the:
Total cost per unit will decrease
18. All of the following costs would be found in
a company’s accounting records except
Opportunity Cost
19. Within the relevant range, the difference
between variable costs and fixed cost is:
Variable cost per unit are constant and fixed
cost per unit is fluctuate
20. An opportunity cost is:
The benefit forgone by selecting one
alternative instead of another.
21. Conversion Cost consists of which of the
following?
Direct labor and manufacturing overhead
22. Prime cost consists of direct materials
combined with:
Direct labor
23. Inventoriable costs are also known as
Product Cost
24. Salaries of Factory supervisors
FOH
25. Wood used in manufacturing beds
DM
26. Glue nails, paint and other small parts
used in production
FOH
27. Factory rent
FOH
28. Factory managers salary
FOH
29. Property taxes on the factory
Conversion Cost
30. Direct materials used in the production
process
Prime cost
31. Transportation cost
Prime cost
32. Lubricating oil for plant machinery
Conversion cost
 COST ACCOUNTING AND CONTROL

33. Assembly line workers wages

Both prime and conversion
34. Depreciation on the building for
administrative staff offices
Fixed cost
35. Sales commission for sales staff
Variable
36. Controller’s office rental
Fixed cost
37. Metal castings used to manufacture
furniture
Variable
38. Wages paid to production workers
Variable
39. The cost of heating the plant
Product
40. The cost of heating the executive offices
Period
41. The cost of printed circuit boards used in
the radios
Product
42. Salaries and commissions of company
salespersons
Period
43. Depreciation on office equipment used in
the executive offices.
Period
44. Depreciation on production equipment
used in the plant
Product
45. Wages of janitorial personnel who clean
the plant
Product
46. The cost of insurance on the plant building
Product
47. The cost of maintaining and repairing
equipment in the plant
Product
48. The cost of printing promotional materials
for trade shows
Period
49. The cost of solder used in assembling the
radios
Product
50. The cost of telephone service for the
executive offices
Period