MANAGERIAL ACC TEST 1 WITH
CORRECT ANSWERS { GUARANTEED
A+}
Product Cost - ✔✔cost incurred to manufacture a product...occurs in the factory
inventorial, goes to balance sheet, sits there until you make a sale, then goes to
income statement as cost of goods sold
ex; depreciation of machinery
period cost - ✔✔costs that are not used to manufacture a product...occurs outside
the factory
can't go to balance sheet, expensed in the period incurred
,operating expenses
ex; salary of vp
prime costs - ✔✔raw material and labor
manufacturing overhead - ✔✔all costs incurred i factory besides material and
labor
a lot of different expenses fall into this category
fixed cost - ✔✔remains unchanged as the level of activity (cost driver)varies
as activity level increases, the total fixed cost remains constant but unit fixed cost
declines
fixed cost in total is constant but fixed cost per unit is inverse
, if activity increases, fixed cost per unit decreases (spreading it thinner)
can trust a fixed cost for its total amount but not a fixed cost per something
variable cost - ✔✔changes, in total, in direct proportion to a change in the level of
activity
total variable cost increases or decreases proportionately with activity change but
unit variable cost remains the same
for every additional amount of __, cost goes up proportionately
variable cost/unit is constant; variable cost in total is proportional
raw material - ✔✔all material before placed into production
work in progess - ✔✔refers to manufactured products that are only partially
completed
finished goods - ✔✔all manufactured goods that are complete and ready for sale
manfacturing costs - ✔✔rm, dl, moh
CORRECT ANSWERS { GUARANTEED
A+}
Product Cost - ✔✔cost incurred to manufacture a product...occurs in the factory
inventorial, goes to balance sheet, sits there until you make a sale, then goes to
income statement as cost of goods sold
ex; depreciation of machinery
period cost - ✔✔costs that are not used to manufacture a product...occurs outside
the factory
can't go to balance sheet, expensed in the period incurred
,operating expenses
ex; salary of vp
prime costs - ✔✔raw material and labor
manufacturing overhead - ✔✔all costs incurred i factory besides material and
labor
a lot of different expenses fall into this category
fixed cost - ✔✔remains unchanged as the level of activity (cost driver)varies
as activity level increases, the total fixed cost remains constant but unit fixed cost
declines
fixed cost in total is constant but fixed cost per unit is inverse
, if activity increases, fixed cost per unit decreases (spreading it thinner)
can trust a fixed cost for its total amount but not a fixed cost per something
variable cost - ✔✔changes, in total, in direct proportion to a change in the level of
activity
total variable cost increases or decreases proportionately with activity change but
unit variable cost remains the same
for every additional amount of __, cost goes up proportionately
variable cost/unit is constant; variable cost in total is proportional
raw material - ✔✔all material before placed into production
work in progess - ✔✔refers to manufactured products that are only partially
completed
finished goods - ✔✔all manufactured goods that are complete and ready for sale
manfacturing costs - ✔✔rm, dl, moh
