Costs that must be allocated in order to be assigned to a product or department are called direct costs. Select one: O True O False
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- Using the costs listed in the previous problem, classify the costs as either product costs or period costs.ABC systems Select one a. will limit cost drivers to units of output O b.comply with CAAP c highlight the different levels of activities O d will allocate costs based on volumeCost classifications used for assigning costs to cost objects include: Multiple Choice Variable cost and fixed cost. Direct cost and indirect cost. Product cost and period cost. Relevant cost and irrelevant cost.
- Research and development costs are classified as: O a. Inventoriable costs. O b. Product costs. O c. Period costs. O d. Cost of goods sold.В. Explain the following: Product costs and Period costs and one example of each. Distinguish clearly between Financial Accounting and Management Accounting under 3 (THREE) different factors, which are: i. Stakeholders, ii. Time frame and iii. Regulations. С. Before calculating costs we need to understand how different costs behave. In cost accounting we typically classify costs by three types of behaviour: Fixed costs - costs which don't change as the activity level changes Variable costs - costs which change in direct proportion to changes in the activity level Semi-variable costs- costs which have both fixed and variable elements. Explain the purpose classifying costs into the behavior patterns. D.For external-reporting purposes, GAAP require that net income be based on _______ costing method. a. absorption b. variable c. direct d. semi-variable e. activity based
- Which one of the following is another name for product costs? Select one: a. Direct costs b. Period costs C. Administrative costs d. Inventoriable costsIn cost terms, direct labor cost is included inA. Manufacturing costsB. Prime costsC. Conversion costsD. B and CE. A, B and CIndicate whether each cost is: A. Fixed or Variable b. Selling, General/Administrative, or Manufacturing
- Atlanta Systems produces two different products, Product A, which sells for $450 per unit, and Product B, which sells for $800 per unit, using three different activities: Design, which uses Engineering Hours as an activity driver; Machining, which uses machine hours as an activity driver; and Inspection, which uses number of batches as an activity driver. The cost of each activity and usage of the activity drivers are as follows: Usage by Product A Usage by Product B Cost Design (Engineering Hours) Machining (Machine Hours) Inspection (Batches) $ 190,000 $1,800,000 $ 108 142 2,160 2,840 160,000 42 38 8 Atlanta manufactures 12,500 units of Product A and 10,200 units of Product B per month. Each unit of Product A uses $100 of direct materials and $45 of direct labor, while each unit of Product B uşes $140 of direct materials and $75 of direct labor.(Management Accounting) When assigning indirect costs to a cost object, an ideal cost-allocation base measures ________. A) the proportion of indirect costs to direct costs B) the extent a particular cost is caused by a cost object C) multiple cost drivers D) the proportion of direct costs to indirect costsWhich of the following best describes a fixed cost? a.Cost representing a fixed proportion of total costs b.Cost directly related to output c.Cost that remains at the same level up to a particular level of output . d.Cost that remains at the same level when output increases.
