Chap 1 Cost concept

The salary of the vice president of finance would be considered a(n):

• manufacturing cost

• product cost

• administrative cost

• selling expense

The wages of materials handling personnel in a factory would usually be considered:

• Indirect labor: Yes, Manufacturing overhead: No

• Indirect labor: Yes, Manufacturing overhead: Yes

• Indirect labor: No, Manufacturing overhead: No

• Indirect labor: No, Manufacturing overhead: Yes

If the cost of goods manufactured is greater than the cost of goods sold, then:

• work in process inventory has decreased during the period

• finished goods inventory has increased during the period

• total manufacturing costs must be greater than cost of goods manufactured

• finished goods inventory has decreased during the period

Within the relevant range:

• variable costs per unit will remain constant and fixed costs per unit will fluctuate

• fixed costs per unit will remain constant and variable costs per unit will fluctuate

• both total variable costs and total fixed costs fluctuate

• both total variable costs and total fixed costs will remain constant

Which one of the following costs should not be considered an indirect cost of serving a particular customer at a Pizza Hut franchise?

• The cost of lighting and heating the restaurant

• The cost of the dough used to make the pizza that is ordered

• The cost of the tables and chairs used to furnish the restaurant

• The salary of the franchise's manager

An opportunity cost is:

• the difference between the total cost of one alternative and the total cost of another alternative

• a cost that continues to be incurred even when there is no activity

• the benefit forgone when one alternative is selected rather than another

• a cost that is saved by not adopting a given alternative