Managerial accounting

Items such as indirect materials, indirect labor, maintenance and repairs on production equipment, depreciation, and insurance on manufacturing facilities are included in ________.

manufacturing overhead costs

Property taxes associated with a company's administrative facility are considered ________.

non manufacturing costs

Differential costs are always ________.

relevant in making business decisions

A fixed cost is a cost which ________.

remains constant in total with changes in the level of activity

If a firm increases its activity level, ________.

some costs will change, other costs will remain the same.

Which of the following is always an irrelevant cost?

sunk cost

Cyber Devices manufactures PCTV products that enable people to watch television content on their computers. It sells its product to retailers for $50. A tuner component that goes into each of these devices costs $5 to acquire. The total variable cost at an activity level of 1,000 units equals ________.

$5,000

Audio Corporation purchased $20,000 of DVDs during the current year. The company had DVD inventory of $15,000 at the beginning of the year. An end of the year audit revealed that the company had DVD inventory of $10,000. The amount that would be reported as cost of goods sold in the income statement for the current year is ________.

25000

Which of the following statements about opportunity costs is not correct?

An opportunity cost cannot be changed by any decision made now or in the future.

The traditional income statement uses which of the following cost categories?

Cost of goods sold and selling and administrative expenses.

Which of the following is true of the contribution approach?

It separates costs into fixed and variable categories.

Manufacturing costs include all of the following categories:

direct labor, direct materials, manufacturing overhead

Materials that become an integral part of the finished product and whose costs can be conveniently traced to the finished product are called ________.

direct materials

________ is sometimes called "touch labor."

direct labor

In a small manufacturing facility, one welder is needed for every 200 hours of machine-hours or fewer in a month. The welder is paid a monthly salary of $2,500. If the total monthly requirement is 1,300 machine-hours, the total salaried employee expense is ________.

17,500

Davidson Company has sales of $100,000, variable cost of goods sold of $55,000, variable selling expenses of $15,000, variable administrative expenses of $6,000, fixed selling expenses of $7,000, and fixed administrative expenses of $9,000. What is Davidson's contribution margin?

$45,000

In the equation, Y = a + bX, X represents ________.

the level of activity