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