Select the appropriate definition for each of the items listed below.
-A cost that stays the same in total regardless of changes in output
A)period cost
B)direct cost
C)opportunity cost
D)variable cost
E)indirect cost
F)fixed cost
G)product cost

Question

Quizplus · 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.

Select the Appropriate Definition for Each of the Items Listed