acc108 - chap 2

Question 1

The monetary measure of the amount of resources given up or used for some purpose

Answer 1

Cost

Question 2

The monetary value of goods and services expended to obtain current or future benefits.

Answer 2

Cost

Question 3

costs incurred to manufacture the product. These are recognized as expense when sold (COGS) and treated as asset when still unsold.

Answer 3

Product Costs

Question 4

non-manufacturing costs that include selling, administrative, and research and development costs. These are recognized as expense in the period of incurrence.

Answer 4

Period Costs

Question 5

includes all the costs incurred in the factory to convert raw materials into finished goods.

Answer 5

Manufacturing Costs

Question 6

refers to all costs which are not incurred in transforming materials to finished goods.

Answer 6

Non-Manufacturing Costs

Question 7

Materials and Labor

Answer 7

Direct Manufacturing Costs

Question 8

Factory Overhead Costs.

Answer 8

Indirect Manufacturing Costs

Question 9

costs related to the design and creation of new products.

Answer 9

Research and Development

Question 10

refer to advertising and promotion costs

Answer 10

Marketing Costs

Question 11

refer to delivery costs.

Answer 11

Distribution Costs

Question 12

refer to the salaries, commissions, and other sales-related costs.

Answer 12

Selling Costs

Question 13

refer to warranties and repair costs.

Answer 13

After-Sales Costs

Question 14

refers to all other non-manufacturing costs not included above.

Answer 14

General and Administrative Costs

Question 15

these are costs that will differ under alternative courses of action.

Answer 15

Relevant Costs

Question 16

these are the differences in costs between any two alternative courses of actions.

Answer 16

Differential Costs

Question 17

refer to increase in the costs from one alternative to another.

Answer 17

Incremental Costs

Question 18

refer to decrease in the costs from one alternative to another.

Answer 18

Decremental Costs

Question 19

refer to income or benefit given up when one alternative is selected over another.

Answer 19

Opportunity Costs

Question 20

these are costs that were already incurred and cannot be changed by any decision made in the present or to be made in the future.

Answer 20

Sunk Costs

Question 21

these are costs, that within the relevant range and time period under consideration, that the total amount varies directly to the change in activity level or cost driver, and per unit amount is constant.

Answer 21

Variable Costs

Question 22

these are costs, that within the relevant range and time period under consideration, that the total amount remains unchanged, and the per unit amount varies inversely with the change in the cost driver.

Answer 22

Fixed Costs

Question 23

are those costs that contain both fixed and variable costs elements.

Answer 23

Mixed Costs

Question 24

refers to the method of analyzing mixed costs based on costs observed at both the high and low levels of activity within the relevant range.

Answer 24

High-Low Method

Question 25

refers to the rough guide for cost estimation which plot the cost against past activity levels.

Answer 25

Scatter Graph or Visual Fit

Question 26

A statistical technique which is often used in separating mixed costs into their fixed and variable components.

Answer 26

LEAST-SQUARE REGRESSION METHOD