ACCT 2101 (Chenier) Chapter 1 Connect HW

Product costs (2)

-AKA Inventoriable costs -"attach" to units of product as they are purchased for resale or produced

Considered non manufacturing costs (2)

-Company president's salary -Sales commissions

Period Costs (2)

-Includes Non manufacturing costs -Expensed in the same period in which they are incurred

What is the primary difference between managerial and financial accounting?

-Managerial-provides information for INTERNAL use -Financial-provides information for EXTERNAL use

In an attempt to reduce the opportunities for error and fraud, SOX places additional responsibilities on: (3)

-all managers -external auditors -boards of directors

Fixed costs: (2)

-become progressively smaller per unit as the level of activity increases -remain constant in TOTAL

Companies with strong ethical cultures (2)

-have higher productivity than those without such cultures -have higher levels of customer satisfaction

Period costs are expensed..... Product costs......

-in the period in which they occur -become part of the inventory

Managerial Accounting (3)

-reports are prepared as needed -emphasizes the future -reports at the decision making level

Variable Costs: (2)

-vary in total -remain constant per UNIT

Three categories for Manufacturing costs (Also all PRODUCT costs)

1. Direct labor 2. Direct materials 3. Manufacturing overhead

Direct Cost

A cost that can be easily and conveniently traced to a specific cost object

Indirect Cost

Costs that cannot be easily and conveniently traced

In an automobile manufacturing plant, assembly-line workers' wages are _____ costs

Direct Labor

Direct Materials

Materials that become an important component of the finished product and their cost can be easily and conveniently traced to the finished product

Advertising and sales commissions are _____ costs

Period

Direct labor and indirect labor are _______ costs

Product

Manufacturing firms

convert materials into finished products

Manufacturing Overhead

includes factory costs such as cleaning supplies, taxes, insurance, and janitor's wages

Indirect materials and indirect labor are classified as

manufacturing overhead