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