You are in browse mode. You must login to use MEMORY

level: Manufacturing Accounts

Questions and Answers List

level questions: Manufacturing Accounts

Question	Answer
Costs associated with any product or service	Material, Labour and Overheads
The monetary measure of resources given up to attain the product or service.	Cost
Time of occurence - Historical or Budgeted Reaction to changes in activity - Variable, Fixed or Mixed Classification on the financial statements - Unexpired or Expired Impact on decision-making - Relevant or Irrelevant	Classification of Cost
Another name for expired costs	Expenses
The process of arranging cost items into groups according to their degree of similarity	Cost Classification
Cost items can be similar in several different respects and a particular classification will depend on the ___________ , and these include: inventory valuation and income determination decision-making planning and control	Purpose of cost accounts
related to making or acquiring the products or providing the services that directly generate revenue for the firm	Product Cost
Also called inventoriable costs and include the cost of direct materials, direct labour and overheads	Product Cost
related to other business functions, such as selling or administration. These are treated as expenses in the period in which they occurred.	Period Cost
Also called fixed costs and are related to time and not an activity and hence, do not change in relation to output or activity	Period Cost
any identifiable part of a product	Direct Material
refers to the time spent by individuals who work specifically on manufacturing a product or performing a service	Direct Labour
any cost the cannot be directly identified in the product or service	Overhead
Examples of cost according to type	Material, Labour
Examples of cost according to function	Manufacturing, Administration
Sum of Direct Material and Direct Labour	Prime Cost
Sum of Direct Labour and Overhead	Conversion Cost
All Manufacturing Costs other tha Direct Material aand Overhead	Manufacturing Overhead
Also called non-manufacturing costs	Period costs
All costs necessary to secure orders and get the finished product or service into the hands of the customer	Marketing or Selling Costs
All costs of general administration of the company as a whole	Administrative Costs
An expected future Cost	Budgeted Cost
A cost that varies in total, in direct proportion to changes in activity	Variable Cost
A cost that remains constant in total despite changes in activity	Fixed Cost
Unit cost remains constant throughout the relevant range	Variable Cost
Unit cost changes throughout a relevant range	Fixed Cost
A cost that is not variable or fixed	Mixed Cost
What is represented in the graph above?	Step-Fixed Cost
What is represented in the graph above?	Variable Cost
What is represented in the graph above?	Step-Variable Cost
What is represented in the graph above?	Fixed Cost
What is represented in the graph above?	Mixed Cost
Also called relevant cost	Avoidable Cost
Also called irrelevant cost	Unavoidable Cost
Costs that are not important in product making decisions, as it will have to be paid regardless of a certain decision or not. The firm has already committed to that expense	Unavoidable Cost
Costs whose occurence depends on whether the decision of production is made or not	Avoidable Costs