A202 Module 1

In the equation Y = a + bX, b denotes the 1. variable cost per unit of activity 2. fixed cost per unit of activity 3. slope of the line 4. level of activity

1 & 3

True of false: variable costs remain fixed in total within the relevant range of activity

False

a type of indirect cost incurred to benefit more than one cost object is a _______ cost

common

any item for which cost data is desired is called ___________

cost object

in an automobile manufacturing plant, the assembly-line workers are classified as _______ labor cost

direct

a _________ can be easily and conveniently traced to a specific cost object

direct cost

true or false: labor costs that can be specifically traced to a product are indirect labor costs

false

direct materials and direct labor are both __________ costs

manufacturing

factory costs such as cleaning supplies, taxes, insurance, and janitor wages are classified as ___________

manufacturing overhead

the materials that go into the final product are ________ materials

raw

In the equation Y = a + bX, Y denotes ...

total mixed cost

within the relevant range, _________ costs remain constant on a per unit basis

variable

Which of the following statements are true? 1. Management cannot use account analysis when trying to estimate the components of a mixed cost 2. Mixed costs contain both fixed and variable costs 3. The equation for a straight line can be used to express the relationship between mixed costs and the level of activity

1 & 2

within the relevant range of activity, variable costs 1. vary in total 2. vary per unit 3. remain constant per unit 4. remain constant in total

1 & 3

Which of the following statements are true? 1. when mixed costs are represented by a straight-line, the steeper the slope, the higher the variable cost per unit 2. the fixed portion of a mixed cost represents the cost incurred for the actual consumption of a service 3. a mixed cost has a minimum cost of having a service available and ready for use 4. the equation for a straight line makes it easy to calculate the total mixed cost for any activity level within the revenant range

1, 3 & 4

administrative costs include... 1. shippings costs and sales commissions 2. executive compensation and public relations costs 3. sales commissions and factory supervisors salaries 4. factory maintenance workers' wages

2

manufacturing costs include 1. administrative costs 2. manufacturing overhead 3. direct materials 4. selling costs 5. direct labor

2, 3 & 5