ACC202-1

For an automobile manufacturer, the cost of a driver's side air bag purchased from a supplier and installed in every automobile would be best described as

• variable cost

• step-variable cost

• fixed cost

• mixed cost

Which questions will change with a decrease in activity within the relevant range

• Unit fixed costs and total variable costs

• Unit variable cost and unit fixed cost

• total fixed costs and total variable cost

• Unit fixed cost and total fixed cost

Direct costs:

• can be easily traced to a particular cost object

• are the variable costs of producing a product

• are incurred to benefit a particular accounting period

• are incurred to a specific decision

Prime costs consists of:

• direct materials and direct labor

• direct materials and manufacturing overhead

• direct labor and manufacturing overhead

• direct materials, direct labor and manufacturing overhead

Manufacturing overhead includes:

• all selling and administrative costs

• all manufacturing costs except direct labor and direct materials

• all direct material, direct labor and administrative costs

• all manufacturing costs except direct labor

Product costs that have become expenses can be found in:

• cost of goods sold

• period costs

• selling expenses

• administrative expenses

Materials used in a factory that are not an integral part of the final product, such as cleaning supplies, should be classified as:

• A period cost

• manufacturing overhead

• direct materials

• administrative expense

which of the following production costs, in expressed on a per unit basis, would be most likely to change significantly as the production level varies

• Direct materials

• Fixed manufacturing overhead

• variable costs

• Direct labor

As the level of activity increases, how will a mixed cost in total and per unit behave:

• (In Total: Increase) (Per Unit: Decrease)

• (In Total: Increase) (Per Unit: Increase)

• (In Total: Increase) (Per Unit: No effect)

• (In Total: Decrease) (Per Unit: Increase)

• (In Total: Decrease) (Per Unit: No effect)

Which of the following statements is correct in describing manufacturing overhead:

• Manufacturing overhead when combined with direct materials cost forms conversion cost

• Manufacturing overhead is a period cost

• Manufacturing overhead when combined with direct labor cost forms prime cost

• Manufacturing overhead consists of all manufacturing cost except for prime cost