chapter 1 material
false
T/F all of a company's depreciation, property taxes and insurance premiums are considered manufacturing overhead
True
T/F the finished product of of one company can become raw materials for another company
False
T/F/ all of a company's depreciation, property taxes and insurance premiums are considered manufacturing overhead
differential revenue
a change in revenues between two alternatives
manufacturing overhead indirect materials
a dress manufacturer would consider the cost of relatively inexpensive items like thread to be apart of
direct material cost
a laptop computer manufacturer would consider the computer's processor chip to be a(n)
indirect
a manufacturing cost that cannot be easily traced to a specific cost
opportunity cost
a potential beenfit that is forfeited or lost when one decision is chosen over another
cost object
any item for which costa data is desired is
period costs
are expensed in the same period in which they are incurred
fixed costs
as the level of activity moves outside of the relevant range _______ increase or decrease in discrete steps rather than a linear fashion
increase or decrease in discrete steps
as the level of activity moves outside of the relevant range, fixed costs
variable costs
cost of goods sold for a merchandising company, dire
direct cost
costs that can be easily and conveniently traced to a specific proudctr
manufacturing overhead
factory costs such as cleaning supplies, taxes, insurance, and janitor wages are classified as
committed fixed cost
fixed costs that cannot easily be changed and often lock a company into a multiyear decision are
net income
gross margin - total selling & administrative expenses
cost behavior
how individual costs react to changes in activity level is referred to as
direct labor cost
in an automobile manufacturing plant, the assembly line workers are classified as
assembly line supervisor salary factory security guard wages
indirect labor costs include
diret labor costs
labor costs that can be easily and conveniently traced to a specific products are
manufacturing overhead direct materials direct labor
manufacturing cost include
direct materials and direct labor are both
manufacturing costs
direct materials
materials that become an important component of the finished product whose cost can be easily and conveniently traced to the finished product are
direct labor direct materials
prime cost include
cost behavior
refers to how a cost will change as activity level changes categorizes costs as fixed, mixed, and variable
indirect
salaries of factory supervisors and factory maintenance personnel are examples of
period costs
sales commissions are
contribution margin
sales revenue minus variable expenses equal
sales salaries sales commissions
selling cost include
matching principle
the accrual concept that cost incurred to generate a review are expensed in the same period the revenue is recognized is known as
relevant range
the assumption that cost behavior is strictly linear is reasonably valid within the
direct materials cost and direct labor costs
the components of prime cost are
raw materials
the materials that go into the final product are
marginal revenue
the revenue from selling one additional unit
in total
variable costs vary ____ within the relevant range of activity
administrative salaries factory insurance factory rent
which of the following are most likely fixed cost?
variable cost
within the relevant range, which type of cost changes in total, in direct proportion to changes in activity level?
