Accounting: Pricing & Costing

The process of determining an item’s selling price by adding the invoice cost of the item to a certain percentage of the cost

• Monetary

• Product cost-plus pricing

• Markup

• Cost behavior

Which of the following are fixed costs (check all that apply)

• Rent

• Direct Materials

• Direct Labor

• Insurance

• Utilities

The difference between the cost of an item to a business and the selling price of an item

• variable costs

• product cost-plus pricing

• fixed costs

• markup

The process of analyzing all costs involved in creating products

• product costing

• markup

• variable costs

• pricing

Raw materials used to make a finished product

• direct labor

• variable costs

• direct materials

• fixed costs

Costs that remain constant even if activity or production level changes

• variable costs

• fixed costs

• monetary

• non-monetary

The point at which total sales equal total costs

• target sales

• product costing

• break-even point

• contribution margin

The amount of money that the sale of a particular product contributes toward the payment of fixed costs and the profit of a business

• contribution margin

• markup

• break-even point

• direct labor

If production decreases, variable costs will decrease

• True

• False