Ch. 2 acct

The general term used to identify both the tracing and the allocation of accumulated costs to a cost object is ____

Cost assignment

Cost behavior refers to:

How costs react to a change in the level of activity

Which of the following statements about the direct/indirect cost classification is true?

Indirect costs are always allocated

Indirect manufacturing costs_____

May include both variable and fixed costs

Cost tracing is ___

The assignment of direct costs to the chosen cost object

Cost allocation is ___

The assignment of indirect costs to the chosen cost object

True of false: A direct cost of one cost object can be an indirect cost of another cost object

True

True or false: All fixed costs are indirect costs

True

Classifying a cost as either direct or indirect depends upon ___.

Whether the cost can be economically traced to the cost object

The determination of a cost as either direct or indirect depends upon the __

cost object chosen

Within relevant rage, variable costs _____

increase in total when activity levels increase

For a manufacturing company, direct labor costs may be included in ___

only in work in process inventory, finished goods inventory, and cost of goods sold