Chapter 2-Fundamentals of Cost Accounting Revision Questions For Cost Concepts and Behaviors

Chapter 2-Fundamentals of Cost Accounting Revision Questions For Cost Concepts and Behaviors Cost - Correct Answer represents a sacrifice of resources (typically cash or a line of credit) Expense - Correct Answer is a cost charged against (i.e. deducted from) revenue in an accounting period Outlay Cost - Correct Answer a past, present, or future cash outflow, such as the time and income sacrificed to get a college education Opportunity Cost - Correct Answer The forgone benefit that could have been realized from the best forgone alternative course of resource, such as the time and income sacrificed to get a college education Operating Profit - Correct Answer The excess of operating revenues over the operating costs incurred to generate those revenues Product Costs - Correct Answer are those costs assigned to units of production and recognized (i.e. expensed) when the product is sold Indirect Manufacturing Costs - Correct Answer are all product costs other than the direct manufacturing costs, often referred to in total as manufacturing overhead Manufacturing Overhead - Correct Answer represents all other costs transforming the materials into a finished product, including indirect labor Period Costs - Correct Answer manufacturing costs and all other costs recognized for financial reporting when incurred, Marketing Costs - Correct Answer are the costs required to obtain customer orders and provide customers with finished products Administrative Costs - Correct Answer costs required to manage the organization and provide staff support