Ch. 2 Cost terminology

Ch. 2 Cost terminology

University

7 Qs

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Ch. 2 Cost terminology

Ch. 2 Cost terminology

Assessment

Quiz

Business

University

Practice Problem

Medium

Created by

Melissa Mattox

Used 8+ times

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7 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

A cost is the same as an expense

True

False

Answer explanation

A cost is a sacrifice of some sort that can be classified as an asset or expense.

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Costs of being in business that appear on the income statement when incurred are

period costs

product costs

Answer explanation

Product costs are incurred to make the product and ultimately are expensed as Cost of Goods Sold.

Period costs are most costs on the income statement after CoGS.

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is NOT included in product costs?

Direct materials

Direct labor

Manufacturing Overhead

Administrative

Answer explanation

Administrative, selling, and marketing are period costs

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Direct labor is

a prime cost

a conversion cost

a product cost

all of these

Answer explanation

Prime costs = DM + DL

Conversion costs = DL + OH

Product costs = DM + DL + OH

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following generally does not have Inventory or Cost of Goods Sold accounts?

Service providers

Merchandisers

Manufacturers

Answer explanation

Some service providers may include inventory as a byproduct, like spare parts or supplies for repairs.

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Costs that are constant per unit but change based on volume of activity are called

variable costs

fixed costs

overhead

period costs

Answer explanation

Total variable costs =Variable cost per unit * # of units

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Factory Overhead appears on which financial statement?

Statement of Cash Flows

Balance Sheet

Income Statement

It does not appear on any

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