true or false part 1

Question 1

finished goods inventory is an asset, but inventories of raw materials and work in process are not considered assets until production is completed.

Answer 1

false

Question 2

manufacturing costs are regarded as expenses of the current period and are expensed during the period.

Answer 2

false

Question 3

product costs are the costs of purchasing or manufacturing inventory and considered as assets until the goods are sold.

Answer 3

true

Question 4

all costs and expenses incurred by a manufacturing entity are considered product cost rather than period cost.

Answer 4

false

Question 5

a manufacturing entity usually has three separate inventories: raw material, work in process, finished goods.

Answer 5

true

Question 6

raw materials inventory refers to the direct materials on hand and available for use in the manufacturing process.

Answer 6

true

Question 7

manufacturing overhead includes all manufacturing costs except direct labor and direct materials

Answer 7

true

Question 8

the wages paid to supervisors are an example of indirect labor

Answer 8

true

Question 9

product costs are all deducted from revenue in the period in which they are incurred.

Answer 9

false

Question 10

prime costs consist of direct materials and direct labor. conversion cost is essentially direct labor.

Answer 10

false