Cost I - True/False

A debit balance in the Manufacturing Overhead account at the end of the year means that manufacturing overhead is overapplied. T/F

False

Manufacturing overhead combined with direct materials is known as conversion cost. T/F

False

Selling and administrative expenses are product costs under G.A.A.P. T/F

False

Product costs that have become expenses can be found in cost of goods sold.

False.

A decrease in production will ordinarily result in an increase in fixed production costs per unit. T/F

True

Direct material costs are generally variable costs. T/F

True

Property taxes and insurance premiums paid on a factory building are examples of manufacturing overhead. T/F

True

The use of predetermined overhead rates in a job-order cost system makes it possible to estimate the total cost of a given job as soon as production is completed. T/F

True

Underapplied or overapplied manufacturing overhead represents the difference between actual overhead costs and applied overhead costs.

True

When the level of activity increases, total variable cost will increase. T/F

True