ACCT 1020 - connect 2

which of the following statements are true?

- Period costs do not flow through the inventory accounts. - Period costs are expensed when incurred.

Which of the following statements is true?

- a direct cost can be easily and conveniently traced to a specific cot object - a regional sales manager's salary would be a direct cost of the regional office in which the sales manager works

indirect labor costs include:

- assembly-line supervisor salary - factory security guard wages

which of the following statements is true?

- sales commissions are period costs - period costs are expensed in the same period in which they are incurred.

a company purchased a 12 month insurance policy in October 1 at a cost of 1,200. on December 31 annual financial statements:

300 is reported as an expense and 900 is reported as an asset

selling costs include:

advertising sales salaries sales commissions

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

common

costs that are shared by multiple cost objects in a company are known as _ costs

common

any item for which cost data is desired is called a(n)

cost object

cost objects include _

customers anything for which cost data is desired organizational subunits

Fantastic Furniture makes custom order couches. The material used to make a couch is a(n) _ cost of the customer placing the order.

direct

costs that can be easily and conveniently traced to a specific product are called _ costs

direct

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

a cost that can be easily and conveniently traced to a specific cost object is a(n) _ cost of that cost object, whereas costs that cannot be easily and conveniently traced to that specific cost object are _ costs.

direct 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 a(n) _ cost

direct material

other names for manufacturing overhead include:

factory overhead factory burden indirect manufacturing costs

true or false: all of a company's depreciation, property taxes and insurance premiums are considered manufacturing overhead.

false

product costs flow through the inventory accounts until the goods are sold, at which time they are matched against sales on the:

income statement

Salaries of factory supervisors and factory maintenance personnel are examples of _ labor costs

indirect

a dress manufacturer would consider the cost of relatively inexpensive items like thread to be part of _.

indirect materials manufacturing overhead

manufacturing overhead costs include_

indirect materials, factory supervisors' salaries, and factory depreciation

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

Factory materials, such as cleaning supplies, that are not components of finished products are classified as:

manufacturing overhead

manufacturing costs include _

manufacturing overhead direct materials direct labor

The accrual concept that costs incurred to generate a revenue are expensed in the same period the revenue is known as the _ principle.

matching

there are two broad classifications of cost: manufacturing costs and _ costs

non manufacturing

nonmanufacturing costs include

sales commissions company president's salary

period costs are always expensed on the income statement in the period in which:

they are incurred

direct labor is also called _ labor

touch

true or false: a cost may be direct or indirect, depending on the cost object.

true

true or false: the finished product of one company can become raw materials for another company.

true