Chapter 2 Flashcards
Cost objects include
all of the above.
The general term used to identify both the tracing and the allocation of accumulated
costs to a cost object is:
cost assignment.
Cost accumulation is:
the collection of cost information in some organized way by means of an accounting system
Cost assignment has 2 components they are:
–Tracing accumulated costs to a cost object
–Allocating accumulated costs to a cost object
The determination of a cost as being either direct or indirect depends upon:
the cost object chosen.
The MOST likely cost driver of direct material costs is:
the number of products manufactured.
Costs expensed on the income statement in the accounting period incurred are referred to as
period costs.
Prime costs include
direct materials and direct manufacturing labor costs.
Conversion costs include
direct manufacturing labor and manufacturing overhead costs.
In the cost classification system used by manufacturing firms, total manufacturing costs would include all of the following EXCEPT:
indirect materials costs, indirect manufacturing labor costs, and manufacturing overhead costs
Which of the following formulas determine cost of goods sold in a merchandising entity?
Beginning inventory + Purchases + Ending inventory = Cost of goods sold
Which of the following formulas determine cost of goods sold in a manufacturing entity?
Cost of goods manufactured + Beginning finished goods inventory = Cost of goods sold
Merchandising companies normally report:
only merchandise inventory
For a computer manufacturer, period costs include the cost of:
distribution
Period costs:
are treated as expenses in the period they are incurred
