Podcast
Questions and Answers
Which of the following statements are true? (Select all that apply)
Which of the following statements are true? (Select all that apply)
Which of the following statements are true? (Select all that apply)
Which of the following statements are true? (Select all that apply)
What are direct costs?
What are direct costs?
Costs that can be easily traced to a particular cost object.
Which of the following would most likely NOT be included as manufacturing overhead in a furniture factory?
Which of the following would most likely NOT be included as manufacturing overhead in a furniture factory?
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What does manufacturing overhead include?
What does manufacturing overhead include?
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How should materials used in a factory that are not an integral part of the final product, such as cleaning supplies, be classified?
How should materials used in a factory that are not an integral part of the final product, such as cleaning supplies, be classified?
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The salary paid to the president of a company would be classified on the income statement as a(n):
The salary paid to the president of a company would be classified on the income statement as a(n):
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Which of the following is NOT a period cost? (Select one)
Which of the following is NOT a period cost? (Select one)
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The cost of electricity for running production equipment is classified as:
The cost of electricity for running production equipment is classified as:
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The cost of lubricants used to grease a production machine in a manufacturing company is an example of a(n):
The cost of lubricants used to grease a production machine in a manufacturing company is an example of a(n):
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Wages paid to the supervisor of the warehouse where raw materials and parts are temporarily stored before being used in production is considered an example of:
Wages paid to the supervisor of the warehouse where raw materials and parts are temporarily stored before being used in production is considered an example of:
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Which of the following costs is classified as both a prime cost and a conversion cost?
Which of the following costs is classified as both a prime cost and a conversion cost?
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All of the following are examples of product costs except:
All of the following are examples of product costs except:
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Prime cost consists of:
Prime cost consists of:
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Within the relevant range, variable costs can be expected to:
Within the relevant range, variable costs can be expected to:
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Property taxes on a company's factory building would be classified as a(n):
Property taxes on a company's factory building would be classified as a(n):
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Fixed costs expressed on a per unit basis:
Fixed costs expressed on a per unit basis:
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Within the relevant range, a difference between variable costs and fixed costs is:
Within the relevant range, a difference between variable costs and fixed costs is:
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Study Notes
Cost Classification
- Factory supervisor's salary is an indirect cost related to product.
- Direct costs are easily traced to specific cost objects.
- Costs can change classification depending on the cost object they relate to.
Manufacturing Overhead
- Wages for production supervisors classify as manufacturing overhead.
- Statement regarding indirect costs as variable costs is false.
- Selling and administrative costs are categorized as indirect costs.
Direct and Indirect Costs
- Direct costs can be directly linked to cost objects.
- Manufacturing overhead excludes direct labor and materials.
- Lubricants for machinery are categorized as indirect material costs.
Period Costs
- Depreciation of factory maintenance equipment is NOT a period cost.
- Salary for customer billing clerk is a period cost.
- Insurance on showrooms counts as a period cost.
Cost Classifications for Equipment
- Electricity for production equipment is classified as a conversion cost but not a period cost.
- Warehouse supervisor wages are not considered direct labor or period costs.
Prime and Conversion Costs
- Direct labor is both a prime cost and a conversion cost.
- Prime costs encompass direct materials and direct labor.
Product Costs
- Depreciation on retail outlets does not count as a product cost.
- Product costs include salaries of plant managers and insurance on factory equipment.
Variable and Fixed Costs
- Variable costs change in total proportionally with activity levels.
- Property taxes on factory buildings are considered product costs.
- Fixed costs per unit decrease when activity levels increase and fluctuate in per unit cost as production changes.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge of accounting concepts with these flashcards focused on Chapter 1 of Besser's text. The quiz covers key ideas about direct and indirect costs and their classification in relation to cost objects. Perfect for preparing for ACCT Test 1!
