Cost Accounting (Horngren 15th Ed.) Chapter 2

Cost Accounting (Horngren 15th Ed.) Chapter 2 Questions And
Answers 2025/2026




Actual cost - CORRECT ANSWER-The cost incurred (a historical or past cost)


Average cost - CORRECT ANSWER-A unit cost, also called an average cost, is
calculated by dividing the total cost by the related number of units produced.


Budgeted cost - CORRECT ANSWER-A predicted, or forecasted, cost (a future cost)


Conversion costs - CORRECT ANSWER-All manufacturing costs other than direct
material costs. Conversion costs represent all manufacturing costs incurred to
convert direct materials into finished goods.


Cost - CORRECT ANSWER-A resource sacrificed or forgone to achieve a specific
objective. A cost is usually measured as the monetary amount that must be paid
to acquire goods or services.