Managerial Accounting Chapter 1
The salary of the assembly shop's supervisor
manufacturing overhead cost (2)
Items such as indirect materials, indirect labor, maintenance and repairs on production equipment, depreciation, and insurance on manufacturing facilities are included in ________. (1)
manufacturing overhead costs (1)
The ________ requires that the costs incurred to generate a particular revenue should be recognized as expenses in the same period that the revenue is recognized.
matching principle
materials used for boxing products for shipment overseas, (units are not normally boxed) (3)
Period cost (3)
In a small manufacturing facility, one welder is needed for every 200 hours of machine-hours or fewer in a month. The welder is paid a monthly salary of $2,500. If the total monthly requirement is 1,300 machine-hours, the total salaried employee expense is ________
$17,500
Davidson Company has sales of $100,000, variable cost of goods sold of $55,000, variable selling expenses of $15,000, variable administrative expenses of $6,000, fixed selling expenses of $7,000, and fixed administrative expenses of $9,000. What is Davidson's contribution margin?
$24,000
Audio Corporation purchased $20,000 of DVDs during the current year. The company had DVD inventory of $15,000 at the beginning of the year. An end of the year audit revealed that the company had DVD inventory of $10,000. The amount that would be reported as cost of goods sold in the income statement for the current year is _______
$25,000
Which observation is true of period costs?
They are expensed in the period in which they are incurred
Cyber Devices manufactures PCTV products that enable people to watch television content on their computers. It sells its product to retailers for $50. A tuner component that goes into each of these devices costs $5 to acquire. The total variable cost at an activity level of 1,000 units equals ________.
$5,000
Which of the following statements about opportunity cost is not correct?
An opportunity cost cannot be changed by any decision made now or in the future
The traditional income statement uses which of the following cost categories?
Cost of goods sold and selling and administrative expenses
Which of the following is common to both prime costs and conversion cost? (2)
Direct Labor (2)
_________ is sometimes called touch labor (1)
Direct labor (1)
Which of the following is true of the contribution approach?
It separates costs into fixed and variable categories
Depreciation on equipment used to test assembles computers before release to customers (2)
Manufacturing overhead cost (3)
How should the wages of a sheet metal worker in a fabrication plant be classified? (1)
Product cost (1)
Depreciation on chairs and tables in the factory lunchroom (8)
Product cost (8)
workers compensation insurance for factory employees (7)
Product costs (7)
The salary of the companies accountant
administrative cost
Manufacturing costs include all of the following categories except administrative costs direct labor direct materials manufacturing overhead
administrative costs
A ___________ is a cost that is incurred to support a number of cost objects but cannot be traced to them individually.
common cost
Adventure Holiday sells thousands of tour packages each month through its various branches. A branch manager's salary would be a(n) _________ of the branch.
direct cost
The wages of employees who assemble computers from components
direct labor cost
Materials that become an integral part of the finished product and whose costs can be conveniently traced to the finished product are called
direct materials
The cost of a hard drive installed in a computer
direct materials cost
Adventure Holiday sells thousands of tour packages each month through its various branches. A branch manager's salary would be a(n) _________ of selling a tour package.
indirect cost
Property taxes associated with a company's administrative facility are considered
nonmanufacturing costs
Depreciation on salespersons' cars (1)
period cost (1)
The wages of the receptionist in the administrative offices (5)
period cost (5)
Cost of leasing the corporate jet used by company executives (6)
period cost (6)
The cost of renting rooms at a Florida resort for the annual sales conference (7)
period cost (7)
Salaries of personnel who work in the finished goods warehouse (2)
period costs (2)
advertising costs (4)
period costs (4)
Rent on equipment used in the factory (2)
product cost (2)
Soap and paper towels used by factory workers at the end of a shift (4)
product cost (4)
Heat, water, and power consumed in the factory (6)
product cost (6)
The cost of packaging the company's product (9)
product cost (9)
Lubricants used for machine maintenance (3)
product costs (3)
factory supervisors salaries (5)
product costs (5)
Differential costs are always
relevant in making business decisions
A fixed cost is a cost which
remains constant in total with changes in the level of activity
Sales commissions paid to the salespeople
selling cost (2)
The cost of advertising in the Puget Sound Computer User newspaper. (1)
selling. cost (1)
If a firm increases its activity level
some costs will change, others will remain the same
This of the following is always an irrelevant cost, Differential cost sunk cost opportunity cost
sunk cost
in the equation y=a+bX, X represents
the level of activity
In the equation y=a+bX, a represents
the total fixed cost
In the equation y=a+bx, y represents
the total mixed cost
In the equation y=a+bX. b represents
the variable cost per unit of activity