Question

Manufacturing or production costs are classified into three basic elements: Direct Materials, Direct Labor, and Manufacturing Overhead.

Group of answer choices

True

False

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Question 22 pts

The wages of the factory’s janitorial staff are considered manufacturing overhead costs.

Group of answer choices

True

False

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Question 32 pts

The formula for break-even units is Fixed Expenses/Contribution Margin Ratio.

Group of answer choices

True

False

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Question 42 pts

Direct labor would be considered a fixed cost for a manufacturing company.

Group of answer choices

True

False

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Question 52 pts

A law firm that serves multiple clients on a variety of cases would use job-order costing.

Group of answer choices

True

False

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Question 62 pts

On the contribution margin income statement, sales less variable costs equals gross margin.

Group of answer choices

True

False

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Question 72 pts

Total variable costs do not change when production increases.

Group of answer choices

True

False

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Question 82 pts

The pre-determined overhead rate is always precise and will avoid having an under or over applied amount of manufacturing overhead.

Group of answer choices

True

False

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Question 92 pts

The selling price of an item less its unit variable cost equals the contribution margin ratio.

Group of answer choices

True

False

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Question 102 pts

The high-low method is a tool that can be used to separate a mixed cost into its fixed and variable components.

Group of answer choices

True

False

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Question 112 pts

An example of indirect labor is production supervisors’ salaries.

Group of answer choices

True

False

Answer 1

Answer Manufacturing = True

Explanation=Manufacturing or production costs is Sum of Direct material , Direct Labour and Manufacturing Overhead.

Answer 22= True

Explanation= Janitorial Staff does not play direct role in production that why there salaries come under manufacturing Overhead.

Answer 32= False

Explanation= Forumla for BEP(Units) would be Fixed Cost/Contribution per units.

Answer 42= False

Explanation=Direct Labour is Variable Expense it varies with the level of production.

Answer 52= True

Explanation=Law firm deals with Different type of cases each time that's why they use job Costing Method,

Answer 62=False

Explanation= In Contribution Margin Income Statement Sales-Variable cost will be equal to Contribution Margin.

Answer 72=False

Explanation= Variable Cost changes with the change in Production it is fixed cost which does not change with production.

Answer 82=False

Explanation=It is estimation and Therefore,at end there can be under or over applied amount of Manufacturing OH.

Answer 92=False

Explanation=Contribution Margin Ratio =Sales-Variable Cost/Sales

Answer 102=True

Explanation=Yes, it is True that we can Separate Fixed Cost and Variable Cost by using High-Low Method

Answer 112=True

Explanation= Supervisor salary is Indirect Labour because we cannot directly attribute to Production of Goods.