Chapter 1 Hmwk Flashcards
three major types of product costs
direct
materials, direct labor, and manufacturing
overhead.
Depreciation on salespersons’ cars
Period or product cost?
period
Rent on equipment used in the factory
Product or period cost?
Product
Lubricants used for machine maintenance
Product or period cost?
Product
Salaries of personnel who work in the finished
goods warehouse .
Product or period cost?
period
Materials used for boxing products for shipment
overseas (units are not normally boxed)
Product or period cost?
period
Advertising costs
period
Depreciation on chairs and tables in the factory
lunchroom
product
A ____________ is a cost that differs
between alternatives in a decision.
differential cost
A ___________ is a cost that has already
been incurred and cannot be altered by any
decision taken now or in the future
sunk cost
The variable manufacturing cost per unit will remain the same
within the relevant range.
True
The total fixed manufacturing cost will remain the same within
the relevant range.
False.
The total variable manufacturing cost will increase, so the total
manufacturing cost will increase too.
True
The average fixed manufacturing cost per unit will decrease as
the level of activity increases.
True.
