Acc 202: CH 2
Common costs
Costs that are shared by multiple cost objects in a company
T/F Indirect materials can be easily and inexpensively traced to a specific product
F
What is a cost object?
any item for which cost data is desired
A cost that can be easily and conveniently traced to a specific_______ is a _______of that ________.
cost object direct cost cost object
Products cost flow through the inventory accounts until the goods are sold, at which time they become an expense in the __________
cost of goods sold section in the IS
Selling costs
costs incurred to obtain customer's orders
Cost objects include
customers, organizational subunits anything for which cost data is desired
Materials that become an important component of the finished product whose cost can be easily and conveniently traced to the finished product are _____ materials
direct
Costs that can be easily and conveniently traced to a specific product are called?
direct costs
Labor costs that can be easily and conveniently traced to specific products are ___ cost
direct labor
Labor cost that can be physically and conveniently traced to individual units of productions are
direct labor cost
The components of prime costs are
direct labor cost and direct materials costs
Labor costs that can be specifically traced to a product are ____
direct labor costs
Manufacturing costs can be divided into 3 categories
direct materials direct labor manufacturing overhead
Manufacturing costs include
direct materials, direct labor, manufacturing overhead
Administrative costs are
executive compensations nd public relations costs
Salaries of factory supervisors and factory maintenance personal are examples of ________
indirect
Costs that cannot be easily and conveniently traced to that specific cost object are ______
indirect costs
The two broad classifications of cost
manufacturing cost non-manufacturing cost
Direct materials and direct labor are
manufacturing costs
Factory costs such as cleaning supplies, taxes, insurance, janitorial wages
manufacturing overhead
advertising and sales commissions are
period costs
Inventoriable cost is another term for
product cost
What type of cost? Direct labor and indirect labor
product costs, indirect labor is also pat of manufacturing overhead
Materials that go into the final product
raw materials
Period costs are always expensed on the income statement in the period in which
they are incurred
Manufacturing overhead includes
workers and supervisors' salaries