Which of the following is NOT a component of manufacturing costs?

• Direct Materials

• Direct Labor

• Manufacturing Overhead

• Administrative Salaries

Direct materials can best be described as:

• Supplies not directly traceable to the product

• Raw materials easily traced to the finished product

• Salaries of factory supervisors

• Finished goods inventory

Which cost would be classified as indirect labor?

• Assembly line workers’ wages

• Salaries of machine operators

• Factory supervisor’s salary

• Material costs used in production

What is typically included in manufacturing overhead?

• Raw materials used

• Sales commissions

• Factory utilities

• Direct labor wages

Which of the following is a period cost?

• Depreciation of factory equipment

• Indirect labor

• Direct materials

• Office rent

Conversion costs include which of the following?

• Direct materials and overhead

• Direct labor and overhead

• Direct materials and direct labor

• Only manufacturing overhead

Which cost classification changes behavior with activity level?

• Sunk cost

• Fixed cost

• Variable cost

• Opportunity cost

If a cost remains constant per unit but varies in total, it is a:

• Fixed cost

• Variable cost

• Mixed cost

• Step cost

A sunk cost is:

• Relevant to future decisions

• A historical cost that cannot be recovered

• Avoidable with alternative actions

• A direct cost

Which cost is always relevant to decision-making?

• Sunk cost

• Opportunity cost

• Historical cost

• Allocated cost