Exam 2: An Introduction to Cost Terms and Concepts

Assuming costs are represented on the vertical axis and volume of activity on the horizontal axis, which of the following costs would be represented by a line that is parallel to the horizontal axis?

Which of the following statements is TRUE about fixed and variable costs?

Holly Ltd. has the following costs for 1,000 units: What is the total amount of direct materials for 100 units?

As the volume of activity increases within the relevant range, the variable cost per unit

Which of the following is a product cost?

Salaries paid to shift supervisors is an example of a

A supervisor's salary of £2,000 per month is an example of a

Mulholland Company manufactures various wooden furniture products. If the cost object is a product, a chair, what costs would be considered direct?

The direct material cost is £10,000 when 2,000 units are produced. What is the direct material cost for 2,500 units produced?

What system would a manufacturer of unique special orders or batch processes most likely use to accumulate costs?

_____ are costs incurred that provide long-term activity capacity, usually as the result of strategic planning.

Which of the following cost behaviour patterns are unrelated to unit activity?

All of the following are product costs EXCEPT

Classify the following costs incurred by a step railing manufacturing company as direct materials, direct labour, factory overhead, or period costs: a. Wages paid to production workers b. Utilities in the office c. Depreciation on machinery in plant d. Steel e. Accountant's salary f. Rent on factory building g. Rent on office equipment h. Maintenance workers' wages i. Utilities in the plant j. Maintenance on office equipment

If total warehousing cost for the year amounts to £350,000, and 40 percent of the warehousing activity is associated with finished goods and 60 percent with direct materials, how much of the cost would be charged as a product cost?

Product costs are converted from cost to expense when

Which of the following costs is an example of product costs?

Mixed costs contain both

Direct costs

Which of the following costs incurred by a chair manufacturer would be traced to the product cost through direct tracing?