question

Expired costs are called:

answer

expenses

question

Cost is:

answer

the amount of cash or cash equivalent sacrificed for goods and/or services that are expected to bring a current or future benefit to the organization.

question

As costs are used up in the production of revenues, they are said to expire. Expired costs are called expenses.

answer

True

question

Assigning costs tells the accountant who spent the money.

answer

False

question

A cost object is any item such as products, customers, departments, regions, and so on, for which costs are measured and assigned.

answer

True

question

Accumulating costs is the way that costs are measured and recorded.

answer

True

question

An indirect cost

answer

is hard to trace.

question

Indirect costs are costs that are not easily and accurately traced to a cost object.

answer

True

question

Allocation means that an indirect cost is assigned to a cost object using a reasonable and convenient method.

answer

True

question

The Amarillo manufacturing plant of Compact Cars assembles two types of cars: Honda Civics and GM Chevys. The plant has two separate assembly lines: one for Civics and another for Chevys. The company must identify whether costs are Direct or Indirect with respect to its two product lines (Civics versus Chevys). And, whether costs are Variable or Fixed depending on the the number of cars assembled. Is the cost of tires for Honda Civics a direct or indirect cost?

answer

Direct cost

question

The Amarillo manufacturing plant of Compact Cars assembles two types of cars: Honda Civics and GM Chevys. The plant has two separate assembly lines: one for Civics and another for Chevys. The company must identify whether costs are Direct or Indirect with respect to its two product lines (Civics versus Chevys). And, whether costs are Variable or Fixed depending on the the number of cars assembled. Is the salary of the public relations manager at the Amarillo plant a direct or indirect cost (for Civics versus Chevys)?

answer

Indirect cost

question

Marketing to Consumers (MTC) is a marketing research firm that organizes focus groups to evaluate consumer products. Each focus group has exactly 10 participants who are each paid $100 to evaluate a new product. MTC rents a conference room for each focus group session. MTC also hires a marketing consultant to lead discussions; consultants are paid $500 per focus group session. MTC is evaluating the cost of running focus groups. MTC must identify whether costs are Direct or Indirect with respect to individual focus groups. And, whether costs are Variable or Fixed depending on the number of focus groups conducted during the fiscal year. Would the salary of MTC's Director of Research be considered a direct or indirect cost?

answer

Indirect cost

question

The Amarillo manufacturing plant of Compact Cars assembles two types of cars: Honda Civics and GM Chevys. The plant has two separate assembly lines: one for Civics and another for Chevys. The company must identify whether costs are Direct or Indirect with respect to its two product lines (Civics versus Chevys). And, whether costs are Variable or Fixed depending on the the number of cars assembled. Is the salary of the engineer who monitors production quality for Honda Civics (but NOT GM Chevys) a direct or indirect cost?

answer

Direct Cost

question

Property taxes on a factory building would normally be classified as a fixed cost.

answer

True

question

A fixed cost is a cost that does not increase in total as output increases and does not decrease in total as output decreases.

answer

True

question

The Amarillo manufacturing plant of Compact Cars assembles two types of cars: Honda Civics and GM Chevys. The plant has two separate assembly lines: one for Civics and another for Chevys. The company must identify whether costs are Direct or Indirect with respect to its two product lines (Civics versus Chevys). And, whether costs are Variable or Fixed depending on the the number of cars assembled. Is the salary of the public relations manager at the Amarillo plant a variable or fixed cost?

answer

Fixed cost

question

Marketing to Consumers (MTC) is a marketing research firm that organizes focus groups to evaluate consumer products. Each focus group has exactly 10 participants who are each paid $100 to evaluate a new product. MTC rents a conference room for each focus group session. MTC also hires a marketing consultant to lead discussions; consultants are paid $500 per focus group session. MTC is evaluating the cost of running focus groups. MTC must identify whether costs are Direct or Indirect with respect to individual focus groups. And, whether costs are Variable or Fixed depending on the number of focus groups conducted during the fiscal year. MTC provides meals at each focus group session. Is the cost of meals variable or fixed?

answer

Variable cost

question

Marketing to Consumers (MTC) is a marketing research firm that organizes focus groups to evaluate consumer products. Each focus group has exactly 10 participants who are each paid $100 to evaluate a new product. MTC rents a conference room for each focus group session. MTC also hires a marketing consultant to lead discussions; consultants are paid $500 per focus group session. MTC is evaluating the cost of running focus groups. MTC must identify whether costs are Direct or Indirect with respect to individual focus groups. And, whether costs are Variable or Fixed depending on the number of focus groups conducted during the fiscal year. Would the salary of MTC's Director of Research be considered a variable or fixed cost?

answer

Fixed cost

question

The Amarillo manufacturing plant of Compact Cars assembles two types of cars: Honda Civics and GM Chevys. The plant has two separate assembly lines: one for Civics and another for Chevys. The company must identify whether costs are Direct or Indirect with respect to its two product lines (Civics versus Chevys). And, whether costs are Variable or Fixed depending on the the number of cars assembled. Is the salary of the engineer who monitors production quality for Honda Civics a fixed or variable cost?

answer

Fixed cost

question

Product costs include direct materials, direct labor, and selling costs.

answer

False

question

Product costs are carried in inventory until the goods are finished, then they are expensed.

answer

False

question

Non-manufacturing costs include

answer

marketing and administration.

question

Product costs consist of

answer

direct materials, direct labor, and overhead.

question

Product costs are expensed

answer

when the product is sold.

question

Direct materials can be directly traced to the goods or services being produced.

answer

True

question

A factory building needs to hire janitorial services. This is classified as indirect labor.

answer

True

question

Indirect labor would include

answer

salary of factory supervisor.

question

Which of the following is not an example of a direct materials cost?

answer

nails used to manufacture a desk

question

Overhead includes

answer

indirect labor, indirect materials, and factory supplies

question

Ashland Company, maker of kitchen cabinets, incurred the following costs during the current year. Which of the following is a period cost?

answer

Salary of Ashland's chief executive officer

question

Ashland Company, maker of kitchen cabinets, incurred the following costs during the current year. Which of the following is a period cost?

answer

Depreciation on automobiles used by the sales staff

question

Which of the following is an example of a period cost?

answer

research and development, selling and marketing, and general accounting

question

Period costs

answer

are selling costs and administrative costs.

question

Cost is a dollar measure of the resources used to achieve a given benefit.

answer

True

question

Costs are incurred to produce future benefits.

answer

True

question

Assigning costs involves the way that a cost is linked to some cost object.

answer

True

question

Price is not:

answer

the same as cost.

question

Assigning costs

answer

involves the way that a cost is linked to some cost object, occurs in both manufacturing and service businesses, and to a cost object using a reasonable and convenient method is allocation.

question

Marketing to Consumers (MTC) is a marketing research firm that organizes focus groups to evaluate consumer products. Each focus group has exactly 10 participants who are each paid $100 to evaluate a new product. MTC rents a conference room for each focus group session. MTC also hires a marketing consultant to lead discussions; consultants are paid $500 per focus group session. MTC is evaluating the cost of running focus groups. MTC must identify whether costs are Direct or Indirect with respect to individual focus groups. And, whether costs are Variable or Fixed depending on the number of focus groups conducted during the fiscal year. Is the payment to individual participants considered a direct or indirect cost?

answer

Direct cost

question

Marketing to Consumers (MTC) is a marketing research firm that organizes focus groups to evaluate consumer products. Each focus group has exactly 10 participants who are each paid $100 to evaluate a new product. MTC rents a conference room for each focus group session. MTC also hires a marketing consultant to lead discussions; consultants are paid $500 per focus group session. MTC is evaluating the cost of running focus groups. MTC must identify whether costs are Direct or Indirect with respect to individual focus groups. And, whether costs are Variable or Fixed depending on the number of focus groups conducted during the fiscal year. MTC leases a fancy office for its corporate headquarters. Would the cost of the lease be considered a direct or indirect cost?

answer

Indirect cost

question

Marketing to Consumers (MTC) is a marketing research firm that organizes focus groups to evaluate consumer products. Each focus group has exactly 10 participants who are each paid $100 to evaluate a new product. MTC rents a conference room for each focus group session. MTC also hires a marketing consultant to lead discussions; consultants are paid $500 per focus group session. MTC is evaluating the cost of running focus groups. MTC must identify whether costs are Direct or Indirect with respect to individual focus groups. And, whether costs are Variable or Fixed depending on the number of focus groups conducted during the fiscal year. MTC leases a fancy office for its corporate headquarters. Would the cost of the lease be considered a variable or fixed cost?

answer

Fixed cost

question

What is an example of a service?

answer

eye exam

question

Direct labor is a(n)

answer

product cost.

question

What is an example of direct labor?

answer

assembly line worker for televisions

question

Gross margin is the difference between sales revenue and cost of goods sold.

answer

True

question

Marketing costs would be classified as period costs.

answer

True

question

Ashland Company, maker of kitchen cabinets, incurred the following costs during the current year. Which of the following is NOT a period cost?

answer

Property taxes on factory building

question

Cost of goods manufactured equals

answer

the product cost of goods completed during the current period and transferred to finished goods.

question

Price must be greater than cost in order for the firm to generate revenue.

answer

False

question

Expired cost are called assets.

answer

False

question

The revenue per unit is called cost.

answer

False

question

Costs can be assigned to cost objects in only one way.

answer

False

question

Assigning costs to cost objects

answer

provides information for decision making, can be accomplished in a number of ways, and can be a simple or complex process.

question

A cost object is something for which a company wants to know the cost.

answer

True

question

The Amarillo manufacturing plant of Compact Cars assembles two types of cars: Honda Civics and GM Chevys. The plant has two separate assembly lines: one for Civics and another for Chevys. The company must identify whether costs are Direct or Indirect with respect to its two product lines (Civics versus Chevys). And, whether costs are Variable or Fixed depending on the the number of cars assembled. Is the cost of electricity for the entire plant a direct or indirect cost (for Civics versus Chevys)?

answer

Indirect cost

question

Marketing to Consumers (MTC) is a marketing research firm that organizes focus groups to evaluate consumer products. Each focus group has exactly 10 participants who are each paid $100 to evaluate a new product. MTC rents a conference room for each focus group session. MTC also hires a marketing consultant to lead discussions; consultants are paid $500 per focus group session. MTC is evaluating the cost of running focus groups. MTC must identify whether costs are Direct or Indirect with respect to individual focus groups. And, whether costs are Variable or Fixed depending on the number of focus groups conducted during the fiscal year. MTC provides meals at each focus group session. Is the cost of meals direct or indirect?

answer

Direct cost

question

Marketing to Consumers (MTC) is a marketing research firm that organizes focus groups to evaluate consumer products. Each focus group has exactly 10 participants who are each paid $100 to evaluate a new product. MTC rents a conference room for each focus group session. MTC also hires a marketing consultant to lead discussions; consultants are paid $500 per focus group session. MTC is evaluating the cost of running focus groups. MTC must identify whether costs are Direct or Indirect with respect to individual focus groups. And, whether costs are Variable or Fixed depending on the number of focus groups conducted during the fiscal year. Is the payment to individual participants considered a variable or fixed cost?

answer

Variable cost

question

A variable cost in total

answer

increases as output increases and decreases as output decreases.

question

The Amarillo manufacturing plant of Compact Cars assembles two types of cars: Honda Civics and GM Chevys. The plant has two separate assembly lines: one for Civics and another for Chevys. The company must identify whether costs are Direct or Indirect with respect to its two product lines (Civics versus Chevys). And, whether costs are Variable or Fixed depending on the the number of cars assembled. Is the cost of tires for Honda Civics fixed or variable costs?

answer

Variable cost

question

Glue used in the manufacture of cabinets would be an example of a fixed cost.

answer

False

question

The Amarillo manufacturing plant of Compact Cars assembles two types of cars: Honda Civics and GM Chevys. The plant has two separate assembly lines: one for Civics and another for Chevys. The company must identify whether costs are Direct or Indirect with respect to its two product lines (Civics versus Chevys). And, whether costs are Variable or Fixed depending on the the number of cars assembled. Is the cost of electricity for the entire plant a fixed or variable cost?

answer

Variable cost

question

Product costs

answer

are costs that are included in the determining the value of the inventory, are manufacturing costs, and include direct materials, direct labor, and overhead.

question

Any costs associated with storing, selling, and delivering the product are classified as product costs.

answer

False

question

Research and development costs would be classified as product cost.

answer

False

question

What is an example of a direct materials cost?

answer

engine on an airplane

question

Cost of goods sold is the total product cost of the units sold during a period.

answer

True

question

Sales revenue equals the product cost per unit times the number of units sold.

answer

False

question

The unit cost

answer

is the total product costs divided by the number of units produced.

question

Cost of goods manufactured equals

answer

total product costs incurred during the current period + beginning work in process − ending work in process.

question

What would not be a period cost?

answer

direct materials

question

Ashland Company, maker of kitchen cabinets, incurred the following costs during the current year. Which of the following is a period cost?

answer

Salary of the Director of Marketing

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