COB 291 COMPREHENSIVE QUESTION
BANK WITH TESTED SOLUTIONS AND
REVIEW AIDS
●● Indirect cost
Answer: cost that cannot be easily and conveniently traced to a specific
cost object
●● Cost object
Answer: anything for which cost data is desired (product, customers,
jobs)
●● Product costs
Answer: Debit inventories when incurred; become expenses when sold;
direct material, direct labor, manufacturing
●● Period cost
Answer: Expenses when incurred; selling & admin, research and
development, and income taxes
●● Direct materials
Answer: cost of raw material that is used to make, and can be
conveniently traced, to the finished product
, ●● Direct labor
Answer: cost of salaries, wages, and fringe benefits for personnel who
work directly on the product; sometimes called touch labor
●● Manufacturing overhead
Answer: all other manufacturing costs: indirect material, indirect labor,
and other costs that cannot be readily traced to a finished product such as
depreciation on PP&E, utilities, etc.
●● Indirect labor
Answer: cost of personnel who do not work directly on the product
●● Indirect material
Answer: materials used to support the production process
●● Period costs include:
Answer: selling costs and administrative costs
●● Selling costs
Answer: all costs incurred to secure customer orders and get the finished
product to customers (advertising, shipping, sales travel)
BANK WITH TESTED SOLUTIONS AND
REVIEW AIDS
●● Indirect cost
Answer: cost that cannot be easily and conveniently traced to a specific
cost object
●● Cost object
Answer: anything for which cost data is desired (product, customers,
jobs)
●● Product costs
Answer: Debit inventories when incurred; become expenses when sold;
direct material, direct labor, manufacturing
●● Period cost
Answer: Expenses when incurred; selling & admin, research and
development, and income taxes
●● Direct materials
Answer: cost of raw material that is used to make, and can be
conveniently traced, to the finished product
, ●● Direct labor
Answer: cost of salaries, wages, and fringe benefits for personnel who
work directly on the product; sometimes called touch labor
●● Manufacturing overhead
Answer: all other manufacturing costs: indirect material, indirect labor,
and other costs that cannot be readily traced to a finished product such as
depreciation on PP&E, utilities, etc.
●● Indirect labor
Answer: cost of personnel who do not work directly on the product
●● Indirect material
Answer: materials used to support the production process
●● Period costs include:
Answer: selling costs and administrative costs
●● Selling costs
Answer: all costs incurred to secure customer orders and get the finished
product to customers (advertising, shipping, sales travel)
