Managerial Accounting chapter 1: Cost Classifications for Assigning
Cost to Cost Objects
Cost objects are: - CORRECT ANSWERAnything for which cost data are desired.
Examples of cost objects are products, customers, geographic regions, and parts of the
organization such as departments or divisions.
Direct Costs are: - CORRECT ANSWERCosts that are easily traced to a specified cost
object.
Indirect Costs are: - CORRECT ANSWERCosts that cannot be easily traced to a
specified cost object.
Common cost are: - CORRECT ANSWERA type of indirect cost.
Raw materials are: - CORRECT ANSWERbasic materials and parts used in the
manufacturing process.
Direct materials are: - CORRECT ANSWERMaterials that become an integral part of a
finished product and whose costs can be conveniently traced to it.
Direct Labor is: - CORRECT ANSWERFactory labor costs easily traced to specific
products. Also called touch labor.
Prime Costs are: - CORRECT ANSWERDirect materials cost plus direct labor cost.
Indirect materials are: - CORRECT ANSWERSmall items of material such as glue and
nails that may be an integral part of a finished product, but whose costs cannot be
easily traced to it.
Indirect labor is: - CORRECT ANSWERThe labor costs of janitors, supervisors,
materials handlers, and other factory workers that cannot be easily traced to particular
products.
Conversion cost equals: - CORRECT ANSWERDirect labor + Manufacturing Overhead
Cost to Cost Objects
Cost objects are: - CORRECT ANSWERAnything for which cost data are desired.
Examples of cost objects are products, customers, geographic regions, and parts of the
organization such as departments or divisions.
Direct Costs are: - CORRECT ANSWERCosts that are easily traced to a specified cost
object.
Indirect Costs are: - CORRECT ANSWERCosts that cannot be easily traced to a
specified cost object.
Common cost are: - CORRECT ANSWERA type of indirect cost.
Raw materials are: - CORRECT ANSWERbasic materials and parts used in the
manufacturing process.
Direct materials are: - CORRECT ANSWERMaterials that become an integral part of a
finished product and whose costs can be conveniently traced to it.
Direct Labor is: - CORRECT ANSWERFactory labor costs easily traced to specific
products. Also called touch labor.
Prime Costs are: - CORRECT ANSWERDirect materials cost plus direct labor cost.
Indirect materials are: - CORRECT ANSWERSmall items of material such as glue and
nails that may be an integral part of a finished product, but whose costs cannot be
easily traced to it.
Indirect labor is: - CORRECT ANSWERThe labor costs of janitors, supervisors,
materials handlers, and other factory workers that cannot be easily traced to particular
products.
Conversion cost equals: - CORRECT ANSWERDirect labor + Manufacturing Overhead
