Ch. 2 Lecture

Question 1

a sacrificed or forgone resource to achieve a specific objective

Answer 1

cost

Question 2

a cost that has occurred

Answer 2

actual cost

Question 3

a predicted cost

Answer 3

budgeted cost

Question 4

anything for which a cost measurement is desired

Answer 4

cost object

Question 5

can be conveniently and economically traced (tracked) to a cost object

Answer 5

direct cost

Question 6

costs cannot be conveniently or econmically traced to a cost object.
these costs are allocated to a cost object in a rational and systematic manner

Answer 6

indirect costs
(overtime premium labor cost & idle time)

Question 7

the collection of cost data in an organized way by means of an accounting system

Answer 7

accumulation

Question 8

assigning accumulated costs with a direct relationship to the cost objects is done via this

Answer 8

tracing

Question 9

assigning accumulated costs with an indirect relationship to a cost object is done via this?

Answer 9

allocation

Question 10

(are these a prime cost or conversion costs)
1. direct materials
2. direct labor
3. indirect costs

Answer 10

1. direct materials - prime
2. direct labor - both
3. indirect costs - conversion

Question 11

____ costs change, in total in proportion to changes in the realted level of activity or volume of output produced

Answer 11

variable costs

Question 12

______ costs, per unit, does not change

Answer 12

variable costs

Question 13

____ costs remain unchangedm in total, for a given time period, despite changes int he related level of activity or volume of output produced

Answer 13

fixed costs

Question 14

______ costs, per unit, change inversely with the level of production

Answer 14

fixed cots

Question 15

___ costs have both variable and fixed components

Answer 15

mixed costs

Question 16

should managers think in terms of unit costs or total costs for many decisions

Answer 16

total cost

Question 17

the band of range of normal activity level (or volume) in which there is a specific relationship between the level of acctivity (or volume) and the cost in question

Answer 17

relevant range

Question 18

3 different types of firms

Answer 18

1. manufacturing
2. merchandising
3. service

Question 19

(which of the 3 different types of firms is this)
purhcase materials and components and convert them into various finished goods

Answer 19

manufacturing
ex:
- automotive companies (Toyota)
- cellular phone producers (Samsung)
- food processing companies (Heinz)
- computer companies (Lenovo)

Question 20

(which of the 3 different types of firms is this)
purchase and then sell tangible products without changing their basic form

Answer 20

merchandising
ex:
- retailing companies (electronics stores such as best buy and department stores such as target)
- distribution (a supplier of hospital products)
- wholesaling

Question 21

(which of the 3 different types of firms is this)
provide services (intangible products) to their customers

Answer 21

service
ex:
- law firms
- accounting firms
- banks
- mutual fund companies
- insurance companies

Question 22

3 differnet types of manufacturing costs

Answer 22

1. direct materials
2. direct labor
3. indirect manufacturing

Question 23

(which of 3 manufacturing costs is this)
acquisition costs of all material that will become part of the cost object

Answer 23

direct materials
- includes freight in costs

Question 24

(which of the 3 manufacturing costs is this)
compensation of all manufacturing labor that can be traced to the cost object

Answer 24

direct labor

Question 25

(which of the 3 manufacturing costs is this) all manufacturing costs that are related to the cost object but cannot be traced to thata cost object in an economically feasible way

Answer 25

indirect manufacturing

Question 26

what are the 3 manufacturing inventory categories

Answer 26

1. direct materials 2. work in process 3. finished goods

Question 27

(which of the 3 manufactuirng invetory categories is this) resources in stock and available for use

Answer 27

direct materials

Question 28

(which of the 3 manufactuirng invetory categories is this) goods partially worked on but not yet completed

Answer 28

work in process

Question 29

(which of the 3 manufactuirng invetory categories is this) goods completed but not yet sold

Answer 29

finished goods

Question 30

all costs of a product that are considered assets in a companys balane sheet when the costs are incurred and that are expensed as cost of goods sold only when the product is sold - for manufacturing companies, all manufacturing costs are this

Answer 30

inventoriable costs

Question 31

all costs in the income statement other than cost of goods sold. they are treated as expenses of the accounting period in which they are incurred

Answer 31

period costs

Question 32

there are no inventoriable costs for service sector companies