Chapter 1, LO 1-4

activity base

Measures whatever causes costs to vary and is sometimes called a cost driver

variable cost

___ changes in direct proportion to changes in the activity level.

fixed costs

___: should not be expressed on a per unit basis when making decisions, remain constant in total regardless of changes in activity, generally include rent and supervisor salaries.

manufacturing overhead costs

_________includes indirect materials, factory supervisors salaries, and factory taxes and insurance.

in total

a fixed cost remains fixed _ within the relevant range of activity

direct material cost

a laptop computer manufacturer would consider the computer's processor chip to be an ?

Indirect cost

a manufacturing cost that cannot be easily traced to a specific cost object

fixed costs

administrative salaries, factory rent, factory insurance

cost object

any item for which cost data is desired is called

direct materials

are those materials that become an integral part of the finished product and whose costs can be conveniently traced to the finished product

relevant range

cost assumptions are reasonably valid within the __ of activity.

Period and inventoriable

cost expensed on the income statement the incurred are __ costs and ___ costs become part of inventory on the balance sheet

common costs

costs that are shared by multiple cost objects in a company are know as

Touch labor

direct labor is also called what?

manufacturing costs

direct materials and direct labor are both:

product costs

direct materials, direct labor, and manufacturing overhead are all __

total mixed cost

equation Y= A+ BX, Y is for what?

discretionary fixed costs

examples of __: management training programs and advertising

committed fixed costs

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

Product costs

inventorial costs is another term for __

cost behavior

managers use ___ to predict how costs will change as the level of activity changes.

semi-variable

mixed costs are also commonly known as __ costs

direct materials and direct labor

the components of prime costs are :

false

true or false: an assembly workers wage is a period cost

false

true or false: assembly line workers wages are period costs

false

true or false: labor costs that can be specifically traced to a product are indirect labor costs.

true

true or false: presenting fixed costs on an average per unit basis can be misleading

constant per unit and vary in total

variable costs remain:

in total

variable costs vary ___ with the relevant range of activity