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
