Total fixed costs
____ costs do not change when activity changes.
Total variable costs
____ costs change in proportion to activity changes.
____ costs are combinations of fixed and variable costs.
____ costs can be traced to a single cost object. Examples of ____ costs are material and labor costs for a product.
____ costs cannot be traced to a single cost object. An example of an _____cost is a maintenance expenditure that benefits two or more departments.
____ costs have already been incurred and cannot be avoided or changed. ____ costs are never relevant to current and future decisions.
Example of ____ costs. : An automobile purchased two years ago cost $15,000. The $15,000 cost is ____ because whether the car is driven, sold, traded, or abandoned, the cost will not change.
____ costs require future outlays of cash. ____ costs are always relevant to current and future decisions.
Example of ____ costs. :You plan on buying a new car for $25,000 next month. The cost of the new car is an ____ cost because you can choose to spend or not to spend the $25,000 next month.
________cost is the potential benefit lost by choosing a specific action from two or more alternatives.
______costs are always relevant to a selection decision.
Example of ____ costs. : If you were not attending college, you could be earning $20,000 per year. Your opportunity cost of attending college for one year is $20,000.
________costs are incurred to manufacture a product. _______costs are not expensed as they are incurred. Instead, they are assigned to inventory and do not become expenses until the item is sold. Inventory is reported at cost as an asset on the balance sheet.
Expenditures identified more with a time period than with finished products costs; includes selling and general administrative expenses.
Costs that are capitalized as inventory because they produce benefits expected to have future value; include direct materials, direct labor, and overhead.
Expenditures incurred in converting raw materials to finished goods; includes direct labor costs and overhead costs.
Expenditures directly identified with the production of finished goods; include direct materials costs and direct labor costs.
Factory activities supporting the production process that are not direct material or direct labor; also called overhead and manufacturing overhead.
is all manufacturing costs other than direct material and direct labor.
_______ costs are indirect manufacturing costs that support the major manufacturing activities. As indirect costs, they cannot be separately and readily traced to the individual units of product.
Raw material that physically becomes part of the product and is clearly identified with specific products or batches of product
Efforts of employees who physically convert materials to finished product.
(component of an item) can be separately and readily traced to the individual units of a product being manufactured. ____________ are sufficiently significant in amount to justify the separate tracing.
is the effort of employees who actually convert materials into a finished product. ________ costs are the wages of _______ employees. ________ costs can be separately and readily traced to the individual units of product being manufactured.
Area of accounting mainly aimed at serving the decision-making needs of internal users; also called management accounting
Current Costs for Materials, Labor, and Overhead
Manufacturing Costs includes
Manufacturing Costs plus beginning goods in Process
Total Costs of goods in Process includes
Total Cost of Goods in Process less Ending Goods in Process
or Total Manufacturing Costs
+ Beginning Work in Progress
- Ending Work in Progress
Cost of Goods Manufactured includes
to determine a product's gross operating margin
cash, receivables, raw materials, goods in process, finished goods
Current Assets section of Manufacturers Balance sheet includes