Managerial Accounting

_____ fixed costs cannot easily be changed and often lock a company into a multi-year decision

Committed

Direct labor hours, Number of purchase orders, and Machine hours are example of what?

Common activity bases

_____ objects may be assigned costs to help control spending and can be products, customers, or jobs

Cost

_____ fixed costs usually arise from annual decisions by management to spend on certain fixed cost items

Disrectionary

Factory insurance, factory rent, and administrative salaries are most likely _____ costs

Fixed

_____ costs remain constant in total within the relevant range of activity

Fixed

A manufacturing cost that cannot be easily traced to a specific cost object is an _____ cost

Indirect

Assembly-line supervisor salary and factory security guard wages are an example of

Indirect labor costs

Nails and glue are considered to be

Indirect materials

Nonmanufacturing costs are _____ costs

Period

What cost is never relevant and should be disregarded when making decisions?

Sunk

A direct cost can be easily and conveniently traced to a specific cost object

True

A mixed cost has a minimum cost of having a service available and ready to use

True

A regional sales manager's salary would be a direct cost of the regional office in which the sales manager works

True

Compared to traditional statements, contribution approach statements provide management with a tool to make decision making easier

True

Differential cost is the difference in cost between two alternatives and also known as incremental cost

True

Period costs are expensed when incurred

True

Plotting data on a scattergraph is an important diagnostic step

True

Product costs are also called inventoriable costs

True

Scattergraphs are a way to diagnose cost behavior

True

The relevant range of activity is approximated by a straight line

True

Traditional income statements focus on cost function. Contribution approach statements focus on cost behavior.

True

When mixed costs are represented by a straight-line, the steeper the slope the higher the variable cost per unit

True

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

True

_____ costs remain constant per unit and vary in total

Variable

_____ costs vary in total, in direct proportion to changes in activity level

Variable

An _____ base is sometimes called a cost driver and measures whatever causes costs to vary

activity

Top management salaries and real estate taxes are example of ____ fixed costs

committed

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

common

The method that uses all the available data points to divide a mixed cost into its fixed and variable components is called the _____ approach

contribution

The financial statement that organizes costs by their behavior instead of by their function is the

contribution format income statement

Sales revenue minus variable expenses is _____ _____

contribution margin

_____ behavior refers to how a cost will change as activity level changes

cost

The change in revenues between two alternatives is known as ______ revenue or incremental revenue

differential

Raw materials include

direct and indirect materials

A laptop manufacturer would consider the computer's processor chip to be a _____ _____cost

direct material

Management training program, and advertising are _____ fixed costs

discretionary

The _____ cost approach includes an analysis of what behavior should be and is based on an engineer's evaluation of the production methods

engineering

A fixed cost remains fixed _____ within the relevant range of activity

in total

Differential costs are also known as ______ costs

incremetnal

A manufacturing cost that cannot be easily traced to a specific cost object is an ____ cost

indirect

Direct materials and direct labor are both

manufacturing costs

Indirect materials and indirect labor are classified as

manufacturing overhead

Company's president's salary and sales commissions are _____ costs

nonmanufacturing

The difference in costs between two alternatives is a called a _____ cost

opportunity

Within the ____ ____ of activity, cost assumptions are reasonably vaild

relevant range

Fixed and variable costs should only be computed if a ______ shows the relationship to be approximately linear

scattergraph

Costs incurred to obtain customers' orders are known as _____ costs

selling

Mixed costs are also commonly known as _______ costs

semi-variable

Y=a+bX, b is the _____ and _____ cost per unit

slope, variable

Y=a+bX, Y is the ____

total mixed cost

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

variable