ACG 2071 Smartbook 1

A company purchased a 12 month insurance policy on October 1 for $1,200. On the December 31 annual financial statements, ______.

$300 is reported as a expense and $900 is reported as an asset

Which of the following are most likely fixed costs?

Factory rent,Factory insurance,Administrative salaries

Which of the following statements are true?

Sales commissions are period costs.,Period costs are expensed when they are incurred.

Which type of cost changes in total, in direct proportion to changes in activity level?

Variable

Product costs ______.

\attach\" to units of product as they are produced or purchased for resale are also called inventoriable costs"

Cost objects include:

anything for which cost data is desired.,organizational subunits / departments.,customers.

How individual costs react to changes in activity level is referred to as cost . (Enter only one word per blank.)

behaviour

Costs that can be easily and conveniently traced to a specific product are called ______ costs.

direct

Labor costs that can be easily and conveniently traced to specific products are ______ costs.

direct labor

A laptop computer manufacturer would consider the computer's processor chip to be a(n) ______ cost.

direct material

Selling and administrative costs are ______ costs.

direct or indirect

Within the relevant range of activity, ______ costs remain constant in total.

fixed

Direct materials and direct labor are both ______ costs.

manufacturing

Inventoriable costs is another term for costs. (Enter only one word per blank.)

manufacturing

The accrual concept that costs incurred to generate a revenue are expensed in the same period the revenue is recognized is known as the principle. (Enter only one word per blank.)

matching

A cost that can be easily and conveniently traced to a specific cost object is a(n) cost of that cost object, whereas costs that cannot be easily and conveniently traced to that specific cost object are costs. (Enter only one word per blank).

prime,overhead

Direct materials, direct labor, and manufacturing overhead are all ______ costs.

product

Materials that become an important component of the finished product whose cost can be easily and conveniently traced to the finished product are materials. (Enter only one word per blank).

raw

Cost behavior ______.

refers to how a cost will change as activity level changes,categorizes costs as fixed, mixed and variable

A cost that contains both variable and fixed costs elements is called a(n) cost. (Enter only one word per blank.)

semivariable

A manufacturing cost that cannot be easily traced to a specific cost object is a(n) cost. (Enter only one word per blank).

shared

Period costs are always expensed on the income statement in the period in which ______.

they are incurred

Direct labor is also called labor. (Enter only one word per blank.)

touch

Within the relevant range, a cost that changes in direct proportion to changes in the activity level is a ______ cost.

variable

Any item for which cost data is desired is called a(n) . (Enter only one word per blank.)

cost,object

The assumption that cost behavior is strictly linear is reasonably valid within the of activity. (Enter only one word per blank.)

relevant,range

Nonmanufacturing costs include ______.

sales commissions ,company president's salary

Selling costs include ______.

sales commissions,sales salaries,advertising

Within the relevant range of activity ______.

costs and activity can be approximated by a straight line,fixed costs remain constant in total

Fantastic Furniture makes custom order couches. The material used to make a couch is a(n) ______ cost of the customer placing the order.

direct

Manufacturing costs include ______.

direct materials,manufacturing overhead,direct labor

Cost of goods sold for a merchandising company, direct materials and commissions are all examples of costs. (Enter only one word per blank.)

variable

Manufacturing costs can be divided into three categories: direct , labor and manufacturing . (Enter only one word per blank).

material,touch,burden

A cost that contains both variable and fixed cost elements is a(n) ______ cost.

mixed