Chapter 2 Flashcards
____________ are related to the particular cost object and can be traced to that cost object in a cost-effective way
Direct cost
___________ are related to the particular cost object but cannot be traced to that cost object in a cost-effective way.
Indirect cost
What are three different types of inventory that manufacturing companies hold?
Direct materials, work-in-process, and finished goods
_________ are incurred during the process of transforming direct materials into finished goods ready for sale.
Conversion cost
__________ remains unchanged for a given time period, despite wide changes in the related level of total activity or volume of output.
fixed cost
_________ are all costs of a product that are considered as assets on the statement of financial position when they are incurred.
inventoriable cost
________ are all direct manufacturing costs.
Prime cost
___________ are all costs in the statement of profit and loss other than cost of goods sold.
Period cost
________ changes in proportion to changes in the related level of total activity or volume.
Variable cost
__________ of a cost object are related to the particular cost object but cannot be traced to it in an economically feasible (cost-effective) way.
Indirect cost
_________ information is cost information that will change a decision. It is needed to identify and remedy different cost-management problems.
Relevant cost
Classify the following cost item as: Direct or Indirect and Variable or Fixed.
Annual retainer paid to a gaming distributor.
D, F
Classify the following cost item as: Direct or Indirect and Variable or Fixed.
Electricity costs of HEC store (single bill covers entire store).
I, F
Classify the following cost item as: Direct or Indirect and Variable or Fixed.
Costs of games purchased for sale to customers.
D, V
Classify the following cost item as: Direct or Indirect and Variable or Fixed.
Subscription to Gaming Trends magazine.
I, F
