The cost of land includes its purchase price and other related costs, including the cost of removing an old unusable building that is on the land. a. True b. False | Homework.Study.com (2024)

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• When land is purchased to construct a new building, the cost of removing any structures on the land should be charged to the building account. True or False?
• The cost to demolish an unwanted structure on newly acquired land should be debited to the land account. (a) True (b) False.
• True or False: When land is purchased to construct a new building, the cost of removing any structures on the land should be charged to the building account.
• True or False. The cost to demolish an unwanted structure on a newly acquired land should be debited to the Land account.
• Answer true or false: The cost to demolish an unwanted structure on newly acquired land should be debited to the Land account.
• Qualified rehabilitation expenditures include the cost of acquiring the building, but not the cost of acquiring the land. a. True b. False
• 1. Land differs from other property because it is not subject to depreciation. True or False 2. When a building is purchased simultaneously with land, the purchase price must be allocated between t
• True or False: The cost of land would include survey and title fees.
• True or False: All costs associated with land, such as driveways, fences, and landscaping, are properly capitalized as part of the cost of the land.
• Property taxes on a building would be included as part of the cost of productions manufactured under the absorption costing concept. True or False?
• When a company purchases a 10-acre parcel of land and a building located on the land, the company will depreciate the entire cost over the useful life of the building. True False
• Land improvements are generally not eligible for cost recovery. a. True b. False
• The depreciable cost of a building is the same as its acquisition cost. True or False.
• A purchase of land or equipment for cash would cause total assets to increase by the cost of the land or the equipment. True or false?
• Under variable costing, fixed overhead costs are excluded from product costs. a. True b. False
• In calculating depletion, the residual value of acquired land containing an ore deposit is included in total costs subject to depletion. a. True b. False
• Answer true or false: The depreciable cost of a building is the same as its acquisition cost.
• Cost of buildings could include professional fees and building permits. True False
• If land declines in value, it may be depreciated for tax purposes. (a) True (b) False
• Answer true or false: The costs of land and land improvements should be recorded in the same account.
• True or False: Cost of buildings could include professional fees and building permits.
• The total cost of a cost object can only include the direct costs that are directly traced to that cost object. a. True. b. False.
• Under variable costing, product cost does not contain any fixed manufacturing overhead cost. A. True. B. False.
• Cash received from the sale of salvaged materials increases the total recorded cost of the land. (a) True (b) False.
• True or false? The land cost initially reported on the balance sheet should include legal fees and title insurance.
• True or False. The cost of land and land improvements should be recorded in the same account.
• Actual overhead costs appear to be used to calculate the Cost of Goods Manufactured. a. True b. False
• If product costs are misclassified as selling costs, the average cost per unit will be understated. a. True b. False
• True or false? Cost of goods sold includes the expenses of buying and preparing an item for sale.
• Total cost equals fixed cost plus variable cost per unit times the activity level in units. True False
• When the costs of spoiled goods are absorbed into the costs of a specific job, the unit cost of the remaining finished units will be less than it would have been had there been no spoiled units. a. True. b. False.
• The basis of cost recovery property must be reduced by at least the cost recovery allowable. a. True b. False
• The term "full cost" refers to the cost of manufacturing and selling a unit of product and includes both fixed and variable costs. a. True. b. False.
• The costs of reprocessing defective goods are known as rework costs. a. True. b. False.
• Cost of equipment does not include costs of conducting trial runs. True False
• A direct cost is a cost that cannot be easily traced to the particular cost object under consideration. a. True b. False
• The cost of goods manufactured includes selling expenses, administrative expenses, and manufacturing overhead. a. True b. False
• Product Costs include materials, labor, and selling and administrative costs. a. True b. False
• All costs incurred in the manufacture of completed products are product costs. a. True b. False
• Direct costs are those costs that cannot be easily and accurately traced to a cost object. a. True. b. False.
• Another term for Product cost is the Cost of goods sold. a. True. b. False.
• The cost recovery basis for property converted from personal use to business use may be the fair market value of the property at the time of the conversion. a. True b. False
• Costs of testing machinery or equipment before they are used would be included in the price of the machinery or the equipment. (a) True (b) False.
• True or False: Cost of equipment does not include costs of conducting trial runs.
• Fixed costs are constant on both the total cost and per-unit cost basis. (a) True (b) False.
• A cost that is part selling cost and part manufacturing cost is referred to as a mixed cost. a. True b. False
• Under variable costing, only costs that change in total with changes in production levels are included in product costs. a. True b. False
• A manufacturing company's cost of goods sold includes only product costs. a. True. b. False.
• A manufacturing company's cost of goods sold includes only product costs. (i) True (ii) False
• Under variable costing, fixed manufacturing overhead cost is not treated as a product cost. a. True. b. False.
• When fixed costs are included in the cost of goods sold, the gross margin percentage should increase and decrease with sales volume. True or False?
• The job cost sheet is used to accumulate the costs charged to a particular job. a. True b. False
• True or False: Land could include additional land improvements that have an indefinite life.
• 1.Overhead expense can be allocated to particular departments. True or False 2.Cost of goods sold equals cost of goods available for sale plus cost of ending inventory. True or False
• Direct costs for one cost object will always be direct costs for any cost object. a. True. b. False.
• Property taxes and insurance premiums paid on a factory building are examples of period costs. a. True b. False
• When using the Hi-Lo method, we usually assume that total costs can be decomposed into fixed costs and variable costs. a) True b) False
• Incremental costs are also known as differential costs. a. True b. False
• Both variable and fixed manufacturing overhead costs are included in the manufacturing overhead budget. A) True B) False
• The cost-volume-profit analysis assumes that selling price, variable cost per unit, and total fixed costs fluctuate through the relevant range. a. True b. False
• True or False: Under absorption costing, fixed manufacturing overhead cost is not included in product cost.
• When deciding to make or buy a product, the only relevant costs are differential costs. Is the statement true or false?
• The cost of plant assets less the accumulated depreciation is called the salvage value of the asset. a. True b. False
• True or False: A manufacturing company's cost of goods sold includes only product cost.
• Disposing of immaterial under or over-allocated Manufacturing Overhead is usually done by adjusting the Cost of Goods Sold account. a. True b. False
• Product costs are inventoriable costs. a. True b. False
• Answer true or false: Mixed costs are costs that have characteristics of both variable and fixed costs.
• True or False: The differential cost is the total of the relevant costs of each alternative.
• True or False: The acquisition costs of property, plant, and equipment should include all normal, reasonable, and necessary costs to get the asset in place and ready for use.
• True or false? The unit product cost under absorption costing does not include fixed manufacturing overhead cost.
• A retail merchandising company's cost of goods sold typically includes part of store utility costs. (i) True (ii) False
• Land is not subject to depreciation. True or false?
• Sunk costs are not relevant in incremental analysis. a. True. b. False.
• In activity-based costing, nonmanufacturing costs are not assigned to products. a. True. b. False.
• Product costs are also called inventoriable costs. a. True b. False
• The cost of raw materials used is usually a fixed cost. a. True. b. False.
• Depreciation is the an expense against the wear and tear of an asset. True or false?
• In evaluating product profitability, ignore marketing costs because they are not considered product costs. True or False?
• Incremental costs should be considered in a make or buy decision. a. True b. False
• Mixed costs exhibit some of the characteristics of both fixed costs and variable costs. a. True b. False
• Direct costs can be traced to more than one cost object. a. True b. False
• Selling expenses are found in the cost of goods sold. a. True b. False
• True or false? Cost of goods sold is also called cost of sales.
• True or false: Costs that can be traced to a cost object in a cost-effective way are called direct costs.
• The book value of old equipment is a relevant cost in a decision to replace that equipment. (Ignore taxes.) a. True b. False
• Average costs are used for internal decision-making, but actual costs are required for calculating cost of goods sold. a. True. b. False.
• Fixed manufacturing costs included in cost of goods available for sale + the production-volume variance will always = total fixed manufacturing costs under absorption costing. A. True B. False
• With respect to shipping terms, freight-in costs are treated as operating expenses whereas freight-out costs are included in the cost of goods sold. A. True B. False
• With respect to shipping terms, freight-in costs are treated as operating expenses whereas freight-out costs are included in cost of goods sold. True or False?
• Both Land and Land Improvements will generally be depreciated. True False
• When a cost base does not change regardless of the activity the cost is a fixed cost. a. True b. False
• Rent, salaries, insurance, and depreciation are examples of the cost of goods sold. (a) True (b) False.
• The cost of indirect materials is not included in the product cost. a. True b. False
• A mixed cost contains both selling and administrative cost elements. a. True. b. False.
• Is the statement true or false? Sunk costs are common costs.
• Conversion cost per equivalent unit equals total conversion costs for the period divided by total equivalent units of conversion costs. a. True b. False
• Variable costs are always relevant costs in decisions. a. True b. False
• A direct cost of one cost object can be an indirect cost of another cost object. True False
• The sale of finished goods requires entries to record both the selling price and the cost of the job. (a) True (b) False.
• State true or false and justify your answer: The cost that differs between alternatives in a particular decision is called relevant cost. It is synonymous with avoidable cost and differential cost.