Chapter 1

Question 1

What is a cost object?

Answer 1

any item we want to know the cost of

Question 2

direct cost?

Answer 2

any cost that can be directly and reasonably traced to the cost object

Question 3

indirect cost?

Answer 3

costs that cannot be traced to the cost object or that are not worth the effort of tracing

Question 4

direct labor?

Answer 4

someone who is involved in actually making th eproduct

Question 5

indirect labor?

Answer 5

someone who is not actively involved in making the product but may oversee things

Question 6

Manufacturing costs?

Answer 6

represent all of the costs associated with producing or manufacturing a physical product

Question 7

manufacturing costs is made up of wht 3 categories?

Answer 7

direct materials, direct labor, and manufacturing overhead

Question 8

what is direct materials?

Answer 8

materials that are major componets of the product and can be conviently traced to each unit to find the cost

Question 9

direct labor?

Answer 9

same as above but can be direclty and conviently traced to the product

Question 10

manufacturing overhead?

Answer 10

includes all manufacturing costs other that direct materials and direct labor incurred to produce a physical product

Question 11

what does manufacturing overhead include?

Answer 11

all costs associated with making the product that cannot be traced to a specfific unidt such as indirect materials, indirect labor, factory rent, factory insurance, and fctory utilities

Question 12

what is prime cost equation?

Answer 12

direct materials + direct labor

Question 13

what is conversion cost equation?

Answer 13

direct labor + manufacturing overhead

Question 14

PRoduct costs? aka inventoriable costs

Answer 14

costs that are assigned to the product as it is being manufactured

Question 15

period costs?

Answer 15

period expenses because they are expensed during the period incurred

Question 16

relevant cost?

Answer 16

cost that has potential to influence adecision

Question 17

irrelevenat cost?

Answer 17

cost that does not have potential to influence adecision

Question 18

sunk costs?

Answer 18

costs that have already been incurred

Question 19

cost center controls what?

Answer 19

controlling cost

Question 20

revenue center controls what?

Answer 20

generating revenue

Question 21

profit center controls what?

Answer 21

generating profit

Question 22

investment center control what?

Answer 22

responsible for profit and investment of assets