Matching
Match the following terms with the appropriate definition.
Premises:
Expenditures incurred in the process of converting raw materials to finished products; include direct labor and factory overhead.
Costs that do not change in total with changes in the volume of activity.
Costs that are incurred for the benefit of more than one cost object.
Manufacturing expenditures that cannot be separately or readily traced to finished goods.
Expenditures directly associated with the manufacture of finished products; include direct materials and direct labor.
Costs that have already been incurred and cannot be avoided or changed.
The potential benefit lost by choosing a specific action from two or more alternatives.
Expenditures necessary and integral to finished products.
Costs that flow directly to the current income statement as expenses.
Costs that change in proportion to changes in volume of activity.
Responses:
Variable costs
Prime costs
Sunk costs
Period costs
Fixed costs
Indirect costs
Product costs
Conversion costs
Factory overhead
Opportunity costs
Correct Answer:
Premises:
Responses:
Expenditures incurred in the process of converting raw materials to finished products; include direct labor and factory overhead.
Costs that do not change in total with changes in the volume of activity.
Costs that are incurred for the benefit of more than one cost object.
Manufacturing expenditures that cannot be separately or readily traced to finished goods.
Expenditures directly associated with the manufacture of finished products; include direct materials and direct labor.
Costs that have already been incurred and cannot be avoided or changed.
The potential benefit lost by choosing a specific action from two or more alternatives.
Expenditures necessary and integral to finished products.
Costs that flow directly to the current income statement as expenses.
Costs that change in proportion to changes in volume of activity.
Premises:
Expenditures incurred in the process of converting raw materials to finished products; include direct labor and factory overhead.
Costs that do not change in total with changes in the volume of activity.
Costs that are incurred for the benefit of more than one cost object.
Manufacturing expenditures that cannot be separately or readily traced to finished goods.
Expenditures directly associated with the manufacture of finished products; include direct materials and direct labor.
Costs that have already been incurred and cannot be avoided or changed.
The potential benefit lost by choosing a specific action from two or more alternatives.
Expenditures necessary and integral to finished products.
Costs that flow directly to the current income statement as expenses.
Costs that change in proportion to changes in volume of activity.
Responses:
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