Managerial Accounting
_____ fixed costs cannot easily be changed and often lock a company into a multi-year decision
Committed
Direct labor hours, Number of purchase orders, and Machine hours are example of what?
Common activity bases
_____ objects may be assigned costs to help control spending and can be products, customers, or jobs
Cost
_____ fixed costs usually arise from annual decisions by management to spend on certain fixed cost items
Disrectionary
Factory insurance, factory rent, and administrative salaries are most likely _____ costs
Fixed
_____ costs remain constant in total within the relevant range of activity
Fixed
A manufacturing cost that cannot be easily traced to a specific cost object is an _____ cost
Indirect
Assembly-line supervisor salary and factory security guard wages are an example of
Indirect labor costs
Nails and glue are considered to be
Indirect materials
Nonmanufacturing costs are _____ costs
Period
What cost is never relevant and should be disregarded when making decisions?
Sunk
A direct cost can be easily and conveniently traced to a specific cost object
True
A mixed cost has a minimum cost of having a service available and ready to use
True
A regional sales manager's salary would be a direct cost of the regional office in which the sales manager works
True
Compared to traditional statements, contribution approach statements provide management with a tool to make decision making easier
True
Differential cost is the difference in cost between two alternatives and also known as incremental cost
True
Period costs are expensed when incurred
True
Plotting data on a scattergraph is an important diagnostic step
True
Product costs are also called inventoriable costs
True
Scattergraphs are a way to diagnose cost behavior
True
The relevant range of activity is approximated by a straight line
True
Traditional income statements focus on cost function. Contribution approach statements focus on cost behavior.
True
When mixed costs are represented by a straight-line, the steeper the slope the higher the variable cost per unit
True
Within the relevant range of activity, fixed costs remain constant in total
True
_____ costs remain constant per unit and vary in total
Variable
_____ costs vary in total, in direct proportion to changes in activity level
Variable
An _____ base is sometimes called a cost driver and measures whatever causes costs to vary
activity
Top management salaries and real estate taxes are example of ____ fixed costs
committed
Costs that are shared by multiple cost objects in a company are known as _____ costs
common
The method that uses all the available data points to divide a mixed cost into its fixed and variable components is called the _____ approach
contribution
The financial statement that organizes costs by their behavior instead of by their function is the
contribution format income statement
Sales revenue minus variable expenses is _____ _____
contribution margin
_____ behavior refers to how a cost will change as activity level changes
cost
The change in revenues between two alternatives is known as ______ revenue or incremental revenue
differential
Raw materials include
direct and indirect materials
A laptop manufacturer would consider the computer's processor chip to be a _____ _____cost
direct material
Management training program, and advertising are _____ fixed costs
discretionary
The _____ cost approach includes an analysis of what behavior should be and is based on an engineer's evaluation of the production methods
engineering
A fixed cost remains fixed _____ within the relevant range of activity
in total
Differential costs are also known as ______ costs
incremetnal
A manufacturing cost that cannot be easily traced to a specific cost object is an ____ cost
indirect
Direct materials and direct labor are both
manufacturing costs
Indirect materials and indirect labor are classified as
manufacturing overhead
Company's president's salary and sales commissions are _____ costs
nonmanufacturing
The difference in costs between two alternatives is a called a _____ cost
opportunity
Within the ____ ____ of activity, cost assumptions are reasonably vaild
relevant range
Fixed and variable costs should only be computed if a ______ shows the relationship to be approximately linear
scattergraph
Costs incurred to obtain customers' orders are known as _____ costs
selling
Mixed costs are also commonly known as _______ costs
semi-variable
Y=a+bX, b is the _____ and _____ cost per unit
slope, variable
Y=a+bX, Y is the ____
total mixed cost
Within the relevant range, ____ costs remain constant on a per unit baisis
variable
