Period vs. Product Costs Managerial Accounting (T/F)

Manufacturing overhead includes all manufacturing costs, such as direct labor and direct materials.

False

Repair and maintenance costs of vehicles used to deliver products to customers are product costs.

False

Sales commissions are included in manufacturing overhead.

False

The cost of direct materials cannot easily be traced to the manufactured product and therefore it is a component of manufacturing overhead.

False

Wages and benefits of assembly line workers are included in manufacturing overhead.

False

Wages and benefits of assembly line workers are period costs.

False

Wages of factory janitors is considered non-manufacturing overhead as these are not directly related to the manufacturing process.

False

All costs incurred in the manufacture of final products are product costs.

True

Direct materials and direct labor are prime costs.

True

Factory rent, taxes, and insurance are included in manufacturing overhead.

True

For a manufacturer, rent paid for an office building is an example of a period cost.

True

In a manufacturing company, administrative costs are included in period costs.

True

In a manufacturing company, advertising and marketing costs are examples of period costs.

True

In a manufacturing company, the salary of sales staff is an example of a period cost.

True

In manufacturing, the cost objects are often units of product.

True

Manufacturing overhead includes indirect manufacturing costs, such as insurance and depreciation on the factory building.

True

Product costs, such as factory overhead, should be treated as an asset until the product is sold.

True

Repair and maintenance costs for factory equipment are included in manufacturing overhead.

True

Repair and maintenance costs for factory equipment are product costs.

True

Wages and benefits of factory managers are considered as product costs.

True