Chapter 2-Cost Allocation

Manufacturing Overhead can be a Wages paid to employees who are not directly involved in production work.

• TRUE

• FALSE

Sunk costs have already been incurred and cannot be changed now or in the future. These costs should be included when making decisions.

• TRUE

• FALSE

Rent and Lease Cost

• Variable Cost

• Mixed or Semi-Variable Cost

• Fixed Cost

Raw Materials

• Variable Cost

• Mixed or Semi-Variable Cost

• Fixed Cost

Salaries

• Variable Cost

• Mixed or Semi-Variable Cost

• Fixed Cost

Pertains to resources expended in order to achieve an objective

• Budget

• Cost

• Yield

• Capital

Answer explanation

(Fundamentals in Nutrition and Dietetics Review Manual Vol. 1 Basic Foods and Institutional Management, p. 197)

Inventory includes

• A. Finished goods

• B. Raw materials

• C. Work-in-progress

• D. All of the above

• E. None of the above

What are direct costs?

• it is taking place over a small period of time.

• is assets minus liabilities.

• is an expense that rises and falls with the volume of production.

• is the pattern of purchasing materials and using them to earn a profit.

What are variable costs?

• is an expense that rises and falls with the volume of productio

• is a bribe.

• direct materials are the materials that are used to make products

• A direct cost is an expense that rises and falls with the volume of production.

What are indirect costs?

• direct labor is the wages of employees who make a company's products.

• to finance something is to borrow money in order to purchase it.

• are costs such as rents and insurance premiums that stay the same regardless of the volume of production.

• is an expense that stays the same regardless of the volume of production.