Accounting Chapter 1 Homework
which of the following are differences between the traditional and contribution format to income statements?
1. compared to traditional statements, contribution format statements provide management with a tool to make decision making easier 2. traditional income statements focus on cost classifications. contribution format statements focus on cost behavior
which of the following statements are true
1. the relevant range of activity is approximated by a straight line 2. within the relevant range of activity, fixed costs remain constant in total
step-variable costs:
can be adjusted quickly as conditions change and may include total salaries employee expense
non-manufacturing costs include:
company president's salary, and sales commissions
a change in revenues between two alternatives is known as (...) revenue or incremental revenue
differential
fantastic furniture makes custom order couches. the material used to make a couch is a (...) cost of the customer placing the order
direct
materials that become an important component of the finished product whose cost can be easily and conveniently traced to the finished product are...
direct materials
manufacturing costs can be divided into three categories
direct materials, direct labor, and manufacturing overhead
selling and administrative costs . are...
direct or indirect costs
fixed costs that usually arise from annual sending decisions be management are...
discretionary fixed costs
administrative costs include:
executive compensation and public relations costs
within the relevant range of activity (...) costs remain constant in total
fixed
a serious limitation of using a traditional income statement for internal reporting purposes is that it does not distinguish between...
fixed and variable costs
product costs flow through the inventory accounts until the goods are sold, at which time they are matched against sales on the:
income statement
a manufacturing cost that cannot be easily traced to a specific cost object is an...
indirect cost
salaries of factory supervisors and factory maintenance personnel are examples of...
indirect labor costs
manufacturing overhead costs include...
indirect materials, factory supervisors' salaries, and factory depreciation
factory costs such as cleaning supplies, taxes, insurance, and janitor wages are classified as...
manufacturing overhead
a dress manufacturer would consider the cost of relatively inexpensive items like thread to be part of:
manufacturing overhead and indirect materials
the cost of producing one more unit is the...
marginal cost
a cost that contains both variable and fixed cost elements is a...
mixed cost
a potential benefit that is forfeited or lost when one decision in chosen over another is called...
opportunity cost
committed fixed costs include:
real estate taxes and top management salaries
variable costs...
remain constant per unit and vary in total
selling costs include:
sales commissions, sales salaries, and advertising
contribution margin is:
sales revenue minus variable costs
costs that have already been incurred and can not be changed by decisions made in the current period or in the future periods are called...
sunk costs
period costs are always expensed on the income statement in the period in which:
they are incurred
in the equation Y=a+bX, Y is the:
total mixed cost
direct labor is also called...
touch labor
true or false: a cost may be direct or indirect, depending on the cost object
true
common activity bases include:
units sold, machine hours, and direct labor hours
which type of cost changes in total, in direct proportion to changes in activity level?
variable
direct labor and manufacturing overhead costs are added to:
work in process
units that are partially complete are found in:
work in process
