ACCT202 CH 1

Which of the following statements are true?

A direct cost can be easily and conveniently traced to a specific cost object. A factory manager's salary is a direct cost of the manufacturing department.

Which of the following statements are true?

A factory manager's salary is a direct cost of the manufacturing department. A direct cost can be easily and conveniently traced to a specific cost object.

Which of the following statements are true?

A sales manager's salary is a direct cost of the sales office in which they work. Direct cost can be easily and conveniently traced to specific cost objects.

Which of the following are most likely fixed costs?

Factory rent Administrative salaries Factory insurance

The contribution approach to constructing income statements Blank______

aids in decision making distinguishes between fixed and variable costs

Period costs:

are expensed in the period incurred include all costs that are not product costs

How a cost react to changes in activity level is referred to as cost___

behavior

Sales revenue minus variable expenses equals ____ ____ .

contribution margin

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

cost object

Differential costs, opportunity costs and incremental costs are all cost classifications used in Blank_____

decision making

Differential costs, opportunity costs and incremental costs are all cost classifications used in Blank______.

decision making

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

direct

Within the relevant range of activity, Blank______ costs remain constant in total.

fixed

The contribution approach to constructing income statements distinguishes between Blank______ costs.

fixed and variable

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

income statement

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

indirect

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

indirect

Which of the following is not a COST CLASSIFICATION associated with decision making?

indirect costs

A cost that contains both variable and fixed cost elements is a(n) Blank______ cost.

mixed

A cost that contains both variable and fixed costs elements is called a(n) ____cost.

mixed

Cost objects include Blank______.

organizational subunits / departments anything for which cost data is desired customers

Inventoriable costs is another term for ____costs.

product

Cost behavior:

refers to how a cost will change as activity level changes categorizes costs as fixed, mixed and variable

Variable costs Blank______.

remain constant per unit and vary in total

Contribution margin is Blank______.

sales revenue minus variable costs

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

they are incurred

A cost may be direct or indirect, depending on the cost object.

true

Cost of goods sold for a merchandising company, direct materials and commissions are all examples of Blank______ costs.

variable

Within the relevant range, ____costs remain constant on a per unit basis.

variable

Which type of cost changes in total, in direct proportion to changes in activity level?

variable costs