ACC212 Chapter 1
Which of the following are marketing or selling expenses?
Advertising, Sales Commissions, Sales Salaries
The difference between ________ costs and ________ costs determines how and when the cost will be matched up against revenue on the income statement.
Blank 1: period or nonmanufacturing Blank 2: product or inventoriable
Which of the following statements are true? Classifying a cost as product or period can impact reported profitability. Inventoriable costs are expensed in the period in which they are incurred. The distinction between product and period costs has more to do with financial accounting than managerial accounting. All costs in a merchandising company are considered to be period costs.
Classifying a cost as product or period can impact reported profitability. The distinction between product and period costs has more to do with financial accounting than managerial accounting.
Which of the following expenses are associated with running the overall business?
General & administrative
Which of the following statements are true? Period costs are expensed in the same period in which they are incurred. Period costs are also called inventoriable costs. Nonmanufacturing costs are period costs. The wages of assembly-line workers are period costs.
Period costs are expensed in the same period in which they are incurred. Nonmanufacturing costs are period costs.
Direct materials, direct labor, and manufacturing overhead are all ______ costs. (Enter only one word per blank.)
Product
Which of the following statements are true?
Product costs "attach" to units of product as they are purchased for resale or produced. GAAP requires all manufacturing costs be treated as product costs.
Which of the following are marketing or selling expenses?
Sales salaries, Advertising, Sales commissions
What type of cost is irrelevant and should be disregarded when making decisions?
Sunk cost
Opportunity costs ______.
are the costs of not doing something should be considered in decision making
Direct labor and manufacturing overhead costs are known as ______ costs.
conversion
Direct labor and manufacturing overhead are referred to as
conversion costs
A relevant cost ______.
differs between alternatives, pertains to the future
The components of prime costs are ______.
direct materials and direct labor
General and administrative expenses include ______.
general management salaries and legal department
Costs that differ between decision alternatives are called differential or _____ cost
incremental
Product costs are also called ______ costs.
inventoriable
An ________ cost will not influence a decision.
irrelevant
Factory materials, such as cleaning supplies, that are not components of finished products are classified as ______.
manufacturing overhead
Costs associated with running a business and selling the product as opposed to making it are called
nonmanufacturing
A foregone benefit from choosing one path over another is a(n)
opportunity cost
Direct materials and direct labor together are referred to as _______.
prime costs
Inventoriable costs is another term for
product costs
Nonmanufacturing costs include ______.
sales commissions company president's salary
A cost that has already been incurred is called a(n)
sunk cost
Differential cost is ______.
the difference in cost between two alternatives
Period costs are expensed in the period in which ____.
they occur
Costs incurred to get the final product to the customer are known as __________ , or selling expenses
marketing