ACCTG 2300 CH 1

Which of the following are most likely fixed costs?

Factory insurance Factory rent Administrative salaries

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

The relative proportion of each type of cost in an organization is known as the company's _____ ______

cost structure

Cost objects include ______.

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

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

direct

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

direct

Labor costs that can be easily and conveniently traced to specific products are ______ costs.

direct labor

A laptop computer manufacturer would consider the computer's processor chip to be a(n) ______ cost.

direct material

Manufacturing costs include ______.

direct materials, direct labor, manufacturing overhead

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

fixed

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

indirect

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

indirect cost

Cost structure:

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

Indirect materials and indirect labor are classified as:

manufacturing overhead

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

mixed

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

mixed

Cost behavior:

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

The assumption that cost behavior is strictly linear is reasonably valid within the ____ _____ of activity.

relevant range

Variable costs ______.

remain constant per unit and vary in total

Selling costs include ______.

sales salaries, sales commissions, and advertising

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

variable

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

variable

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

variable

Contribution margin is ______.

sales revenue minus variable costs

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

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

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

cost object

Touch labor is another name for ____ labor.

direct

Manufacturing costs include _____ & _____ costs.

direct & indirect

Selling and administrative costs are ______ costs.

direct or indirect

Factory costs such as cleaning supplies, taxes, insurance, and janitor wages are classified as ______.

manufacturing overhead

Within the relevant range of activity ______.

the assumption that cost behavior is strictly linear is reasonably valid; fixed costs remain constant in total and vary per unit