Builder's Guide to Accounting 09 Flashcards
1
Q
- Ch 9, p 97 deals with:
A
Checks and Checkbook systems.
2
Q
- Ch 10, p 155: ACCOUNTING FOR MATERIALS.
What are DIRECT COSTS?
A
COSTS RELATED TO THE WORK YOU DO, AND DON’T INCLUDE OVERHEAD AND OTHER EXPENSES.
3
Q
- DIRECT COSTS change as:
A
Sales INCREASE or DECREASE.
So do GROSS PROFITS.
4
Q
- The largest DIRECT COSTS to a builder are:
A
- Subcontracts
- Material
- Labor
5
Q
- What CATEGORY of costs are FREIGHT COSTS?
A
DIRECT COST, because they are a part of the cost of getting the material to the job.
6
Q
- What are INDIRECT COSTS?
A
They are the expenses of taking on a particular job THAT DOES NOT INVOLVE ANY WORK ON THE JOB ITSELF.
7
Q
- Examples of INDIRECT COSTS?
A
Freight
Administrative payroll
Small tools
Anything not billed to a specific CUSTOMER.
8
Q
- What is OVERHEAD?
A
The cost of items you need to conduct business that you CANNOT charge to a PARTICULAR JOB.
9
Q
- Examples of OVERHEAD?
A
Office space
Utilities
Clerical help
Office supplies
10
Q
- How does OVERHEAD change?
A
It remains fairly steady regardless of how busy you are. DIRECT and INDIRECT costs CHANGE as your volume changes.
