Question 1

Select the appropriate definition for each of the items listed below.
a.
period cost
b.
direct cost
c.
opportunity cost
d.
variable cost
e.
indirect cost
f.
fixed cost
g.
product cost
-A cost that can be easily traced to a cost object

Accepted Answer

Direct costs can be easily traced to a cost object, such as a product, project, or department, because they are directly associated with producing a specific good or service. Examples include raw materials and labor directly involved in production.

Question 2

Select the appropriate classification of the items listed below.
a.
selling expense
b.
administrative expense
c.
direct materials
d.
direct labor
e.
overhead
-Cost of shipping goods to customers

Accepted Answer

The cost of shipping goods to customers is a selling expense because it relates to the process of selling and distributing goods to customers.

Question 3

Select the appropriate classification of the items listed below.
a.
selling expense
b.
administrative expense
c.
direct materials
d.
direct labor
e.
overhead
-Glue used in the manufacture of furniture

Accepted Answer

The answer of Select the appropriate classification of the items...

Question 4

Select the appropriate classification of the items listed below.
a.
selling expense
b.
administrative expense
c.
direct materials
d.
direct labor
e.
overhead
-Chief of surgery's salary at a hospital

Accepted Answer

The answer of Select the appropriate classification of the items...

Question 5

Select the appropriate classification of the items listed below.
a.
selling expense
b.
administrative expense
c.
direct materials
d.
direct labor
e.
overhead
-Wages of assembly line workers in an automobile plant

Accepted Answer

The wages of assembly line workers in an automobile plant are a type of direct labor cost, which is a cost directly related to the production of goods or services.

Question 6

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

Accepted Answer

Fees paid to outside auditing firm are considered as period cost as it is an expense that is incurred over a given period of time and is not directly associated with the production of a product.

Question 7

Select the appropriate classification for each of the items listed below.
a.
Product cost
b.
Period cost
-Factory security costs

Accepted Answer

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

Question 8

Select the appropriate definition for each of the items listed below.
a.
period cost
b.
direct cost
c.
opportunity cost
d.
variable cost
e.
indirect cost
f.
fixed cost
g.
product cost
-A manufacturing cost

Accepted Answer

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

Question 9

Select the appropriate definition for each of the items listed below.
a.
period cost
b.
direct cost
c.
opportunity cost
d.
variable cost
e.
indirect cost
f.
fixed cost
g.
product cost
-A cost that stays the same in total regardless of changes in output

Accepted Answer

Fixed costs are costs that do not vary in total regardless of changes in output or sales. Examples include rent, salaries, and insurance premiums.

Answer: B
 Direct costs are costs that can be easily identified and traced to a specific product or service, such as the cost of direct materials or direct labor.

Answer: C
 Opportunity cost is the value of the next best alternative forgone when making a decision. It is not a direct cost or an indirect cost, but rather a concept used in decision making.

Answer: D
 Variable costs are costs that vary in total directly and proportionally with changes in output or sales. Examples include the cost of raw materials or sales commissions.

Answer: E
 Indirect costs are costs that are not directly traceable to a specific product or service, such as rent or utilities. They are also known as overhead costs.

Answer: G
 Product costs are costs that are incurred in the production of a good or service and are included in inventory until the product is sold. They include direct materials, direct labor, and manufacturing overhead.

Question 10

Select the appropriate classification of the items listed below.
a.
selling expense
b.
administrative expense
c.
direct materials
d.
direct labor
e.
overhead
-Cost of lubricating factory machinery

Accepted Answer

The cost of lubricating factory machinery is a part of the overhead expenses, as it is not directly associated with the production of goods or services.

Question 11

Select the appropriate definition for each of the items listed below.
a.
per-unit prime cost
b.
per-unit conversion cost
c.
per-unit cost of goods manufactured
-(total manufacturing costs + work in process beginning - work in process ending)/units produced

Accepted Answer

The formula calculates the per-unit cost of goods manufactured, which includes all manufacturing costs (prime and conversion) associated with producing units during the period.

Question 12

Select the appropriate definition for each of the items listed below.
a.
period cost
b.
direct cost
c.
opportunity cost
d.
variable cost
e.
indirect cost
f.
fixed cost
g.
product cost
-A cost that is not inventoried

Accepted Answer

A cost that is not inventoried is typically a period cost, as it is expensed in the period in which it is incurred rather than being added to the cost of a product.

Question 13

Select the appropriate classification for each of the items listed below.
a.
Product cost
b.
Period cost
-Factory supervisor's salary

Accepted Answer

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

Question 14

Select the appropriate definition for each of the items listed below.
a.
period cost
b.
direct cost
c.
opportunity cost
d.
variable cost
e.
indirect cost
f.
fixed cost
g.
product cost
-A cost that is difficult to trace to a cost object

Accepted Answer

Indirect costs are expenses that are not directly traceable to a specific cost object, such as a product, project, or activity. Examples include utilities, rent, and administrative salaries. These costs are necessary for the operation but cannot be directly linked to the production or sale of individual products or services.

Question 15

Select the appropriate classification for each of the items listed below.
a.
Product cost
b.
Period cost
-Cost of conference for sales team

Accepted Answer

The cost of conference for the sales team is a period cost as it is not directly tied to the production or sale of a specific product but is a general cost of doing business.

Question 16

Select the appropriate classification for each of the items listed below.
a.
Product cost
b.
Period cost
-Rental cost of executive Lear jet

Accepted Answer

Rental cost of executive Lear jet is a period cost as it is incurred during a specific period of time and not directly related to the production or sale of a specific product.

Question 17

Select the appropriate definition for each of the items listed below.
a.
period cost
b.
direct cost
c.
opportunity cost
d.
variable cost
e.
indirect cost
f.
fixed cost
g.
product cost
-A benefit given up when one alternative is chosen over another

Accepted Answer

Opportunity cost represents the benefits an individual, investor, or business misses out on when choosing one alternative over another. It's the value of the next best alternative foregone as a result of making a decision.

Question 18

Select the appropriate definition for each of the items listed below.
a.
period cost
b.
direct cost
c.
opportunity cost
d.
variable cost
e.
indirect cost
f.
fixed cost
g.
product cost
-A cost that increases in total as output increases

Accepted Answer

Variable costs are those that vary directly with the level of output. As production or output increases, variable costs increase; as production decreases, variable costs decrease.

Question 19

Select the appropriate definition for each of the items listed below.
a.
per-unit prime cost
b.
per-unit conversion cost
c.
per-unit cost of goods manufactured
-(direct materials + direct labor)/units produced

Accepted Answer

Per-unit prime cost is calculated by adding the direct materials and direct labor costs, then dividing by the number of units produced. This formula accurately represents that calculation.

Question 20

Select the appropriate definition for each of the items listed below.
a.
per-unit prime cost
b.
per-unit conversion cost
c.
per-unit cost of goods manufactured
-(direct labor + overhead)/units produced

Accepted Answer

The formula (direct labor + overhead)/units produced gives us the per-unit conversion cost, which represents the cost incurred in converting raw materials into finished products.

Quiz 2: Basic Managerial Accounting Concepts

Select the appropriate definition for each of the items listed below. a. period cost b. direct cost c. opportunity cost d. variable cost e. indirect cost f. fixed cost g. product cost -A cost that can be easily traced to a cost object

Select the appropriate classification of the items listed below. a. selling expense b. administrative expense c. direct materials d. direct labor e. overhead -Cost of shipping goods to customers

Select the appropriate classification of the items listed below. a. selling expense b. administrative expense c. direct materials d. direct labor e. overhead -Glue used in the manufacture of furniture

Select the appropriate classification of the items listed below. a. selling expense b. administrative expense c. direct materials d. direct labor e. overhead -Chief of surgery's salary at a hospital

Select the appropriate classification of the items listed below. a. selling expense b. administrative expense c. direct materials d. direct labor e. overhead -Wages of assembly line workers in an automobile plant

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

Select the appropriate classification for each of the items listed below. a. Product cost b. Period cost -Factory security costs

Select the appropriate definition for each of the items listed below. a. period cost b. direct cost c. opportunity cost d. variable cost e. indirect cost f. fixed cost g. product cost -A manufacturing cost

Select the appropriate definition for each of the items listed below. a. period cost b. direct cost c. opportunity cost d. variable cost e. indirect cost f. fixed cost g. product cost -A cost that stays the same in total regardless of changes in output

Select the appropriate classification of the items listed below. a. selling expense b. administrative expense c. direct materials d. direct labor e. overhead -Cost of lubricating factory machinery

Select the appropriate definition for each of the items listed below. a. per-unit prime cost b. per-unit conversion cost c. per-unit cost of goods manufactured -(total manufacturing costs + work in process beginning - work in process ending)/units produced

Select the appropriate definition for each of the items listed below. a. period cost b. direct cost c. opportunity cost d. variable cost e. indirect cost f. fixed cost g. product cost -A cost that is not inventoried

Select the appropriate classification for each of the items listed below. a. Product cost b. Period cost -Factory supervisor's salary

Select the appropriate definition for each of the items listed below. a. period cost b. direct cost c. opportunity cost d. variable cost e. indirect cost f. fixed cost g. product cost -A cost that is difficult to trace to a cost object

Select the appropriate classification for each of the items listed below. a. Product cost b. Period cost -Cost of conference for sales team

Select the appropriate classification for each of the items listed below. a. Product cost b. Period cost -Rental cost of executive Lear jet

Select the appropriate definition for each of the items listed below. a. period cost b. direct cost c. opportunity cost d. variable cost e. indirect cost f. fixed cost g. product cost -A benefit given up when one alternative is chosen over another

Select the appropriate definition for each of the items listed below. a. period cost b. direct cost c. opportunity cost d. variable cost e. indirect cost f. fixed cost g. product cost -A cost that increases in total as output increases

Select the appropriate definition for each of the items listed below. a. per-unit prime cost b. per-unit conversion cost c. per-unit cost of goods manufactured -(direct materials + direct labor)/units produced

Select the appropriate definition for each of the items listed below. a. per-unit prime cost b. per-unit conversion cost c. per-unit cost of goods manufactured -(direct labor + overhead)/units produced