Ch1pt2

Question 1

Common business sectors

Answer 1

1. Service companies
2. Merchandising companies
3. Manufacturing companies

Question 2

Cost classifications

Answer 2

Behavior
traceability
controllability
relevance
function

Question 3

How a cost changes with activity

Answer 3

Behavior

Question 4

Can it be easily and economically trace to a single cost object

Answer 4

Traceability

Question 5

Responsibility level

Answer 5

Controllability

Question 6

Sunk cost or out of pocket

Answer 6

Relevance

Question 7

Capitalization as inventory or expensed as incurred

Answer 7

Function

Question 8

All activities associated with making a product/providing a service

Answer 8

Value chain

Question 9

Value chain

Answer 9

Research and development
design
production
marketing and sales
distribution
customer support

Question 10

Beginning WIP + Direct materials + direct labor + manufacturing overhead -ending WIP = finished goods

Answer 10

Cost of goods manufactured

Question 11

Beginning to finish goods + completed goods - and then finished goods =COGS

Answer 11

Cost of goods sold

Question 12

Direct materials

Answer 12

Product

Question 13

Direct labor

Answer 13

Product

Question 14

Manufacturing overhead

Answer 14

Product

Question 15

Direct materials and direct labor

Answer 15

Prime cost

Question 16

Direct labor and manufacturing overhead

Answer 16

Conversion costs

Question 17

Selling costs

Answer 17

Period

Question 18

General & administrative costs

Answer 18

Period

Question 19

Raw materials inventory
work in process inventory
finished goods inventory

Answer 19

Manufacturing companies