Period costs include direct materials and direct labor.

If the cost of materials is not a significant portion of the total product cost, the materials may be classified as part of factory overhead cost.

A cost can be a payment of cash for the purpose of generating revenues.

Conversion costs are the combination of direct labor, direct material, and factory overhead costs.

Product costs include direct labor and advertising expense.

Manufacturers use machinery and labor to convert direct materials into finished products.

Labor costs that are directly traceable to the product are part of factory overhead.

A cost object indicates how costs are related or identified.

A report analyzing how many products need to be sold to cover operating costs is not typically a managerial accounting report.

A report analyzing the dollar savings of purchasing new equipment to speed up the production process is a managerial accounting report.

The costs of materials and labor that do not enter directly into the finished product are classified as factory overhead.

Direct labor costs are included in the conversion costs of a product.

Controlling is the process of monitoring operating results and comparing actual results with the expected results.

Factory overhead cost is sometimes referred to as factory burden.

The statement of cost of goods manufactured is an extension of the income statement for a manufacturing company.

Indirect costs can be specifically traced to a cost object.

Managerial information is for external as well as internal stakeholders.

Managers use managerial information to evaluate performance of a company's operation.

Prime costs consist of factory overhead and direct labor.