2.3 MA ABM3

Product costs are expensed on the income statement in the period incurred.

• True

• False

Direct labor is a manufacturing cost and a product cost.

• True

• False

Conversion costs include direct materials and direct labor.

• True

• False

Nonmanufacturing costs are treated as period costs.

• True

• False

Indirect materials and indirect labor are included in manufacturing overhead.

• True

• False

sales commissions, advertising, shipping, and the costs of operating finished goods warehouses are

• Selling cost

• Admin cost

• both

For financial accounting purposes, product costs include direct materials, direct labor, and manufacturing overhead.

• True

• False

Raw materials inventory, Work in process inventory and Finished goods are reported in

• Balance sheet/SOFP

• Income statement/SPL

Finished goods were sold is cost of goods sold which was reported in SPL.

• True

• False