College Acct 2- Chapter 1

Front

Which of the following costs is considered both a direct cost and a conversion cost?
Variable overhead, Fixed overhead, Direct materials, Direct labor

Back

Direct labor

Front

Which of the following is considered a period cost?
Depreciation of factory machinery,
Advertising expenses for a new product,
Raw materials used in production,
Wages of factory workers

Back

Advertising expenses for a new product

Front

What does the contribution margin represent?

Back

Sales less variable costs

Front

What amounts should be considered product and period costs respectively for the first year of coverage? Options: Product - $525, Period - $225; Product - $225, Period - $525; Product - $750, Period - $0; Product - $0, Period - $750

Back

Product - $525, Period - $225

Front

Which of the following statements is true when referring to fixed costs? Committed fixed costs arise from the annual decisions by management, As volume increases, unit fixed cost and total fixed cost will change, Fixed costs increase in total throughout the relevant range, Discretionary fixed costs can often be reduced to zero for short periods of time without seriously impairing the long-run goals of the company

Back

Discretionary fixed costs can often be reduced to zero for short periods of time without seriously impairing the long-run goals of the company.

Front

A cost that has already been incurred and cannot be recovered is known as a(n):

Back

Sunk cost

Front

Which of the following would most likely be considered a direct cost in a furniture factory?
The salary of the factory manager,
The cost of wood used in making a table,
The depreciation on factory equipment,
The factory's electricity bill

Back

The cost of wood used in making a table

Front

In the cost formula Y = a + bX, what does the "a" represent?

Back

Total fixed cost

Front

Indirect costs:

Back

cannot be easily traced to a particular cost object.

Front

As the level of activity increases, how will a mixed cost in total and per unit behave? Options: In Total - Decrease, Per Unit - Increase; In Total - Increase, Per Unit - No Effect; In Total - Increase, Per Unit - Decrease; In Total - Increase, Per Unit - Increase; In Total - Decrease, Per Unit - No Effect

Back

In Total - Increase
Per Unit - Decrease