MGT 2642 Readiness Quiz 1
Which of the following statements about opportunity costs is not correct?
An opportunity cost cannot be changed by any decision made now or in the future.
A ___________ is a cost that is incurred to support a number of cost objects but cannot be traced to them individually.
Common Cost
The traditional income statement uses which of the following cost categories?
Cost of goods sold and selling and administrative expenses
Adventure Holiday sells thousands of tour packages each month through its various branches. A branch manager's salary would be a(n) _________ of the branch.
Direct Cost
Which of the following is common to both prime cost and conversion cost?
Direct Labor
________ is sometimes called "touch labor."
Direct Labor
Manufacturing Costs Include
Direct Labor Direct Material Manufacturing Overhead
Materials that become an integral part of the finished product and whose costs can be conveniently traced to the finished product are called ________.
Direct Materials
Because of automation, which component of product cost is declining?
Direct labor
Which of the following statements is true?
Fixed costs are constant in total dollars
Adventure Holiday sells thousands of tour packages each month through its various branches. A branch manager's salary would be a(n) _________ of selling a tour package.
Indirect Cost
Which of the following is true of the contribution approach?
It separates costs into fixed and variable categories.
Items such as indirect materials, indirect labor, maintenance and repairs on production equipment, depreciation, and insurance on manufacturing facilities are included in ________.
Manufacturing Overhead Costs
Property taxes associated with a company's administrative facility are considered
Nonmanufacturing Costs
How should the wages of a sheet metal worker in a fabrication plant be classified?
Product cost
Which of the following is always an irrelevant cost?
Sunk cost
Conversion costs consist of:
direct labor and manufacturing overhead
Costs that are not worth the effort to trace to a specific cost object are:
indirect costs
Manufacturing costs that cannot be classified as either direct materials or direct labor are known as
manufacturing overhead
Differential costs are always ________.
relevant in making business decisions
A fixed cost is a cost which ________.
remains constant in total with changes in the level of activity
If a firm increases its activity level, ____
some costs will change, other costs will remain the same
In the equation, Y = a + bX, X represents ________.
the level of activity