Ch 15. Classifying Costs + Concepts and Terminology
Classification of these cost for an automobile manufacturer: Wages of assembly line workers
Direct labor costs
Classification of these cost for an automobile manufacturer: Automobile engine Brake pads Glass for front and rear windshields Steering wheel Tires
Direct materials costs
Classification of these cost for an automobile manufacturer: Depreciation of robotic assembly line equipment Safety helmets and masks for assembly line workers Salary of quality control inspector
Factory overhead costs
-Generally Accepted Accounting Principles (GAAP) must be used -Prepared statements usually pertain to the company as a whole rather than individual departments or products
Financial Accounting
The phase of the management process that uses process information to eliminate the source of problems in a process so that the process delivers the correct product in the correct quantities is called (directing, improving)
Improving
-Primarily used for internal decision making -Information provided will often be subjective, such as estimated future results -Often prepared on an as-needed basis rather than at fixed intervals
Managerial Accounting
For apparel manufacturer the following are classified as ______ cost: Advertising expenses Chief financial officer's salary Depreciation on office equipment Research and development costs Sales commissions Salaries of distribution center personnel Travel costs of media relations employees Utility costs for office building
Period cost.
For apparel manufacturer the following are classified as ______ cost: Depreciation on sewing machines Fabric used during production Factory janitorial supplies Factory supervisors' salaries Property taxes on factory building and equipment Oil used to lubricate sewing machines Repairs and maintenance costs for sewing machines Salaries of production quality control supervisors Wages of sewing machine operators
Product cost.
Factory overhead costs combined with direct labor costs are called (prime, conversion) costs.
conversion costs
A sacrifice made to obtain some benefit is a (cost, expense).
cost
A product, sales territory, department, or activity to which costs are traced is called a (direct cost, cost object).
cost object
The implementation of automatic, robotic factory equipment normally (increases, decreases) the direct labor component of product costs.
decreases
Classification of costs for a maker of consumer products: Wages of production line employees at the Pineville, Louisiana, soap and detergent plant
direct labor cost
Classification of costs for a maker of consumer products: -Packaging materials -Paper used in bath tissue -Resins for body wash products -Scents and fragrances used in making soaps and detergents
direct materials cost
An example of factory overhead is (electricity used to run assembly line, CEO salary).
electricity used to run assembly line
Classification of costs for a maker of consumer products: -Depreciation on assembly line equipment in the Mehoopany, Pennsylvania, paper products plant -Licensing payments for use of Disney characters on children products -Maintenance supplies -Plant manager salary for the Iowa City, Iowa, plant -Salary of process engineers
factory overhead cost
Feedback is often used to (improve, direct) operations
improve
The plant manager's salary would be considered (direct, indirect) to the product.
indirect
Materials for use in production are called (supplies, materials inventory).
materials inventory
Advertising costs are usually viewed as (period, product) costs.
period costs
The salaries of salespeople are normally considered a (period, product) cost.
period costs
Direct labor is both a
prime cost and a conversion cost.
Direct materials costs combined with direct labor costs are called (prime, conversion) costs.
prime costs
Long-term plans are called (strategic, operational) plans.
strategic plans
The balance sheet of a manufacturer would include an account for (cost of goods sold, work in process inventory).
work in process inventory