Acc 202: CH 2

Common costs

Costs that are shared by multiple cost objects in a company

T/F Indirect materials can be easily and inexpensively traced to a specific product

F

What is a cost object?

any item for which cost data is desired

A cost that can be easily and conveniently traced to a specific_______ is a _______of that ________.

cost object direct cost cost object

Products cost flow through the inventory accounts until the goods are sold, at which time they become an expense in the __________

cost of goods sold section in the IS

Selling costs

costs incurred to obtain customer's orders

Cost objects include

customers, organizational subunits anything for which cost data is desired

Materials that become an important component of the finished product whose cost can be easily and conveniently traced to the finished product are _____ materials

direct

Costs that can be easily and conveniently traced to a specific product are called?

direct costs

Labor costs that can be easily and conveniently traced to specific products are ___ cost

direct labor

Labor cost that can be physically and conveniently traced to individual units of productions are

direct labor cost

The components of prime costs are

direct labor cost and direct materials costs

Labor costs that can be specifically traced to a product are ____

direct labor costs

Manufacturing costs can be divided into 3 categories

direct materials direct labor manufacturing overhead

Manufacturing costs include

direct materials, direct labor, manufacturing overhead

Administrative costs are

executive compensations nd public relations costs

Salaries of factory supervisors and factory maintenance personal are examples of ________

indirect

Costs that cannot be easily and conveniently traced to that specific cost object are ______

indirect costs

The two broad classifications of cost

manufacturing cost non-manufacturing cost

Direct materials and direct labor are

manufacturing costs

Factory costs such as cleaning supplies, taxes, insurance, janitorial wages

manufacturing overhead

advertising and sales commissions are

period costs

Inventoriable cost is another term for

product cost

What type of cost? Direct labor and indirect labor

product costs, indirect labor is also pat of manufacturing overhead

Materials that go into the final product

raw materials

Period costs are always expensed on the income statement in the period in which

they are incurred

Manufacturing overhead includes

workers and supervisors' salaries