ACCT 202 - Connect Exam 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

Selling cost include what?

- advertising - sales salaries - sales commissions

Cost objects include?

-organizational subunits -customers -anything for which cost data is desired

What does period cost include? A. include all costs that are not product costs B. are included as part of the cost of goods C. are expensed in the period incurred D. flow through the inventory accounts

A/C

Which of the following apples to product cost? A. are always expensed in the same period in which the related products are produced B. are also called inventoriable costs C. include all costs involved in making and selling a product D. "attach" to units of product as they are produced or purchased for resale

B/D

Which of the following statements are true? A. An individual cost is either direct or indirect, regardless of the cost object. B. A sales manager's salary is a direct cost of the sales office in which they work. C. A direct cost is sometimes referred to as a common cost. D. Direct cost can be easily and conveniently traced to specific cost objects.

B/D

Indirect labor costs include: Which two? A. assembly-line worker wages B. administrative assistant salary C. assembly-line supervisor salary D. factory security guard wages

C/D

Which of the following apply to cost behavior? A. is the relative proportion of each type of cost in an organization B. is a detailed analysis technique used to determine whether costs are fixed or variable C. refers to how a cost will change as activity level changes D. categorizes costs as fixed, mixed and variable

C/D

Prime cost includes what?

Direct labor and direct materials

Which of the following are most likely fixed costs?

Factory rent Factory insurance Administrative salaries

All of a company's depreciation, property taxes, and insurance premiums are considered manufacturing overhead. True or False?

False

Presenting fixed costs on an average per unit basis makes them look like they are variable costs. True or False?

True

How individual costs react to changes in activity level is referred to as cost as what?

behavior

A type of indirect cost incurred to benefit more than one cost object is a(n) ______ cost.

common

A(n) __________ is anything for which cost data are desired—including products, customers, plants, office locations, and departments.

cost object

A(n) ___________ is anything for which cost data are desired - including products, customers, plants, offices, locations, and departments.

cost object

The relative proportion of each type of cost in an organization is known as the company's _________ ___________.

cost structure

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

direct

Raw materials whose cost can be easily and conveniently traced to the finished product are _______ materials.

direct

Manufacturing costs include _______ costs.

direct and indirect

In an automobile manufacturing plant, the assembly-line workers are classified as __________ cost

direct labor

A laptop computer manufacturer would consider the computer's processor chip to be what?

direct material

Administrative costs include what?

executive compensation and public relations costs

Other names for manufacturing overhead include what>

factory burden factory overhead indirect manufacturing costs

Costs that remain constant in total and vary per unit are what?

fixed cost

In the equation Y = a + bX, a = total what cost?

fixed cost

Product costs flow through the inventory accounts until the goods are sold, at which time they are matched against sales on the what?

income statement

A manufacturing cost that cannot be easily traced to a specific cost object is a(n) _______ cost.

indirect

Salaries of factory supervisors and factory maintenance personnel are examples of ________ labor costs.

indirect

Discretionary fixed costs include what?

management training programs advertising

Direct materials and direct labor are both _______ costs.

manufacturing

Factory burden is another name for what?

manufacturing overhead

Factory costs such as cleaning supplies, taxes, insurance, and janitor wages are classified as what?

manufacturing overhead

The accrual concept that costs incurred to generate a revenue are expensed in the same period the revenue is recognized is known as what?

matching principle

Inventoriable costs is another term for _______ costs.

product

What materials refer to any materials used in the final product?

raw materials

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

they are incurred

Committed fixed costs include what?

top management salaries real estate taxes

Direct labor is also called what?

touch labor

Common activity bases include what?

units sold direct labor hours machine hours

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

variable

Cost of goods sold for a merchandising company, direct materials and commissions are all examples of what?

variable cost

A factory produces a variety of tools. The factory manager's salary is a(n) _______ cost of a particular type of tool.

Indirect

Indirect materials and indirect labor are classified as _________

Manufacturing overhead

As a general rule fixed costs should _____________ be expressed on an average per-unit basis in internal reports.

NOT

The finished product of one company can become raw materials for another company. True or False?

True

Costs that are incurred to support a number of cost objects but cannot be traced to them individually are known as ________ costs.

common

Manufacturing overhead costs include what?

indirect materials, factory supervisors' salaries, and factory depreciation

An activity base is what?

is sometimes called a cost driver measures whatever causes costs to vary

Cost structure is what?

is the relative proportion of each type of cost in an organization

A cost that contains both variable and fixed costs elements is called what?

mixed

The sum of direct materials and direct labor is called __________ cost.

prime

Variable cost are what?

vary in total remain constant per unit