Exam I

Question 1

Direct cost

Answer 1

Traceable to a cost object

Question 2

Opportunity cost

Answer 2

Potential benefit lost

Question 3

Direct labor

Answer 3

Labor costs associated with specific units used to convert into raw materials

Question 4

Difference between managerial and financial accounting

Answer 4

Managerial includes many projections and estimates

Question 5

Labor costs can be

Answer 5

Direct or indirect

Question 6

Cost accounting

Answer 6

A system of accounting that produces timely information.

Question 7

Document used in a job order used to record costs of producing a job

Answer 7

Job cost sheet

Question 8

Rate estimates prior to the beginning of period that relates estimated overhead to an allocation factor such as estimated direct labor

Answer 8

Predetermined overhead allocation rate.

Question 9

Cannot be traced to units of products in the same way direct labor can.

Answer 9

Overhead costs

Question 10

From an ABC prospective what causes costs to be incurred?

Answer 10

Activities

Question 11

Overhead costs are often affected by many issues. True or false?

Answer 11

True

Question 12

Allocated overhead costs vary depending upon the allocation method used

Answer 12

True

Question 13

Contribution margin per unit expressed as a percentage of the product selling price

Answer 13

Contribution margin ratio

Question 14

Sales level at which a company neither earns a profit nor incurs a loss

Answer 14

Break even point

Question 15

Excess of expected sales over the sales level at the break even point

Answer 15

Margin of safety

Question 16

Cost that remains the same

Answer 16

Fixed