Question 1

MATCHING
Select the appropriate classification for each of the following costs.
a.
Period
b.
Product
-Cost accountant's salary

Accepted Answer

The cost accountant's salary is a period cost since it is a cost that is incurred over a specific period of time (in this case, likely monthly or annually) regardless of the level of production or sales. It is not directly tied to the production of a specific product.

Question 2

MATCHING
Select the appropriate classification for each of the following costs.
a.
Period
b.
Product
-Advertising costs

Accepted Answer

Advertising costs are typically considered period costs, as they are incurred to promote a business's products or services over a certain period of time, rather than being directly tied to the production of a specific product.

Question 3

Select the appropriate classification for each of the costs incurred by a manufacturer of automobiles.
a.
direct materials
b.
direct labor
c.
overhead
d.
selling expense
e.
administrative expense
-factory supplies

Accepted Answer

Factory supplies costs vary with the level of production, making them variable costs.

Question 4

Select the appropriate classification for each of the costs incurred by a manufacturer of automobiles.
a.
direct materials
b.
direct labor
c.
overhead
d.
selling expense
e.
administrative expense
-general accounting costs

Accepted Answer

The answer of Select the appropriate classification for each of...

Question 5

Select the appropriate classification for each of the costs incurred by a manufacturer of automobiles.
a.
direct materials
b.
direct labor
c.
overhead
d.
selling expense
e.
administrative expense
-salary of chief executive officer

Accepted Answer

The salary of the chief executive officer is typically a fixed cost, as it does not vary with changes in the level of output or activity within the company.

Question 6

MATCHING
Select the appropriate classification for each of the following costs.
a.
Period
b.
Product
-Supplies for factory washroom

Accepted Answer

The answer of MATCHING
Select the appropriate classification for each of...

Question 7

Select the appropriate classification for each of the costs incurred by a manufacturer of automobiles.
a.
direct materials
b.
direct labor
c.
overhead
d.
selling expense
e.
administrative expense
-depreciation of vehicles used by sales personnel

Accepted Answer

Depreciation of vehicles used by sales personnel would fall under selling expenses as it is a cost associated with the sales department's operations.

Question 8

MATCHING
Select the appropriate classification for each of the following costs.
a.
Period
b.
Product
-Cost of shipping products to customers

Accepted Answer

The cost of shipping products to customers is a period cost because it is not directly tied to the production or sale of a specific product but is rather an expense incurred to support the overall business operations.

Question 9

Select the appropriate classification for each of the items listed below.
a.
Product cost
b.
Period cost
-Sugar used in soft drink production

Accepted Answer

Sugar used in soft drink production is considered a direct material cost and is included in the cost of goods sold for the finished product, making it a product cost.

Question 10

MATCHING
Select the appropriate classification for each of the following costs.
a.
Period
b.
Product
-Factory supervisor's salary

Accepted Answer

The factory supervisor's salary is an indirect cost that falls under the category of factory overhead.

Question 11

Select the appropriate classification for each of the items listed below.
a.
Product cost
b.
Period cost
-Fees paid to an advertising firm

Accepted Answer

Fees paid to an advertising firm would be considered a period cost, as it is an expense that is incurred over a fixed period of time for the purpose of promoting the company's products or services. It is not directly related to the production of a specific product.

Question 12

MATCHING
Select the appropriate classification for each of the following costs.
a.
Period
b.
Product
-Research and development costs

Accepted Answer

Research and development costs would be reported on the Income Statement in the Operating Section.

Question 13

MATCHING
Select the appropriate classification for each of the following costs.
a.
Period
b.
Product
-Assembly line worker's wages

Accepted Answer

Assembly line worker's wages are directly related to the production of a specific product, making it a product cost.

Question 14

Select the appropriate classification for each of the items listed below.
a.
Product cost
b.
Period cost
-Cost of nails used by a home builder

Accepted Answer

The cost of nails used by a home builder is a direct cost of producing the homes and is therefore a product cost.

Question 15

Select the appropriate classification for each of the costs incurred by a manufacturer of automobiles.
a.
direct materials
b.
direct labor
c.
overhead
d.
selling expense
e.
administrative expense
-cost of windshields used in the production process

Accepted Answer

The cost of windshields is a prime cost that is directly used in the production process of automobiles. Therefore, it is classified as direct materials.

Question 16

Gross margin is the difference between sales revenue and cost of goods sold.

Accepted Answer

Gross margin is calculated as sales revenue minus cost of goods sold, so it is the difference between these two figures.

Question 17

Select the appropriate classification for each of the costs incurred by a manufacturer of automobiles.
a.
direct materials
b.
direct labor
c.
overhead
d.
selling expense
e.
administrative expense
-factory security costs

Accepted Answer

Factory security costs are considered part of overhead, which includes indirect labor, indirect materials, and other indirect costs associated with manufacturing.

Question 18

Select the appropriate classification for each of the costs incurred by a manufacturer of automobiles.
a.
direct materials
b.
direct labor
c.
overhead
d.
selling expense
e.
administrative expense
-cost of tires

Accepted Answer

Tires are considered to be a direct material used in the manufacture of automobiles.

Question 19

Select the appropriate classification for each of the costs incurred by a manufacturer of automobiles.
a.
direct materials
b.
direct labor
c.
overhead
d.
selling expense
e.
administrative expense
-factory janitorial costs

Accepted Answer

Factory janitorial costs are part of overhead costs as they cannot be traced directly to a specific product or unit of production. They are necessary for the overall operation of the manufacturing process.

Question 20

MATCHING
Select the appropriate classification for each of the following costs.
a.
Period
b.
Product
-Marketing costs

Accepted Answer

Marketing costs are typically incurred on a regular basis to promote a company's products or services. As such, they are generally classified as period costs that are expensed in the period in which they are incurred, rather than being added to the cost of a specific product.

Quiz 2: Basic Managerial Accounting Concepts

MATCHING Select the appropriate classification for each of the following costs. a. Period b. Product -Cost accountant's salary

MATCHING Select the appropriate classification for each of the following costs. a. Period b. Product -Advertising costs

Select the appropriate classification for each of the costs incurred by a manufacturer of automobiles. a. direct materials b. direct labor c. overhead d. selling expense e. administrative expense -factory supplies

Select the appropriate classification for each of the costs incurred by a manufacturer of automobiles. a. direct materials b. direct labor c. overhead d. selling expense e. administrative expense -general accounting costs

Select the appropriate classification for each of the costs incurred by a manufacturer of automobiles. a. direct materials b. direct labor c. overhead d. selling expense e. administrative expense -salary of chief executive officer

MATCHING Select the appropriate classification for each of the following costs. a. Period b. Product -Supplies for factory washroom

Select the appropriate classification for each of the costs incurred by a manufacturer of automobiles. a. direct materials b. direct labor c. overhead d. selling expense e. administrative expense -depreciation of vehicles used by sales personnel

MATCHING Select the appropriate classification for each of the following costs. a. Period b. Product -Cost of shipping products to customers

Select the appropriate classification for each of the items listed below. a. Product cost b. Period cost -Sugar used in soft drink production

MATCHING Select the appropriate classification for each of the following costs. a. Period b. Product -Factory supervisor's salary

Select the appropriate classification for each of the items listed below. a. Product cost b. Period cost -Fees paid to an advertising firm

MATCHING Select the appropriate classification for each of the following costs. a. Period b. Product -Research and development costs

MATCHING Select the appropriate classification for each of the following costs. a. Period b. Product -Assembly line worker's wages

Select the appropriate classification for each of the items listed below. a. Product cost b. Period cost -Cost of nails used by a home builder

Select the appropriate classification for each of the costs incurred by a manufacturer of automobiles. a. direct materials b. direct labor c. overhead d. selling expense e. administrative expense -cost of windshields used in the production process

Gross margin is the difference between sales revenue and cost of goods sold.

Select the appropriate classification for each of the costs incurred by a manufacturer of automobiles. a. direct materials b. direct labor c. overhead d. selling expense e. administrative expense -factory security costs

Select the appropriate classification for each of the costs incurred by a manufacturer of automobiles. a. direct materials b. direct labor c. overhead d. selling expense e. administrative expense -cost of tires

Select the appropriate classification for each of the costs incurred by a manufacturer of automobiles. a. direct materials b. direct labor c. overhead d. selling expense e. administrative expense -factory janitorial costs

MATCHING Select the appropriate classification for each of the following costs. a. Period b. Product -Marketing costs