ACC 222 MiAMi University exAM 1 100%
verified GrAded A+
cost object ✔✔ anything for which cost data are desired--including products, customers, and
organizational subunits
direct cost ✔✔ a cost that can be easily and conveniently traced to a specified cost object
indirect cost ✔✔ a cost that cannot be easily and conveniently traced to a specified cost object
common cost ✔✔ a cost that is incurred to support a number of cost objects but cannot be
traced to them individually...a type of indirect cost
raw materials ✔✔ the materials that go into the final product
direct materials ✔✔ refers to raw materials that become an integral part of the finished product
and whose costs can be conveniently traced to the finished product
prime cost ✔✔ sum of direct materials & direct labor costs
manufacturing overhead ✔✔ all manufacturing costs EXCEPT direct materials & direct labor
indirect materials ✔✔ raw materials whose costs cannot be easily or conveniently traced to
finished products
indirect labor ✔✔ employees, such as janitors, supervisors, materials handlers, maintenance
workers, and night security guards, that play an essential role in running a manufacturing facility
,conversion cost ✔✔ the sum of direct labor & manufacturing overhead
nonmanufacturing costs ✔✔ 1) selling costs
2) administrative costs
selling costs ✔✔ all costs that are incurred to secure customer orders and get the finished
product to the customer
(i.e. advertising, shipping, sales commissions, etc.)
administrative costs ✔✔ all costs associated with the general management of an organization
rather than with manufacturing or selling (i.e. accounting, secretarial, public relations, etc.)
SG&A ✔✔ non manufacturing costs that are selling, general, & administrative costs
product costs ✔✔ all costs involved in acquiring or making a product. these attach to a unit of
product as it is purchased or manufactured and they stay attached to each unit of product as
long as it remains in inventory awaiting sale
inventoriable costs ✔✔ another word for product costs since they are initially assigned to
inventories
work in process ✔✔ consists of units of product that are only partially complete and will require
further work before they are ready for sale to the customer
finished goods ✔✔ consist of completed units of product that have not yet been sold to
customers
, period costs ✔✔ all the costs that aren't product costs (all selling & administrative expenses)
cost behavior ✔✔ how a cost reacts to changes in the level of activity
cost structure ✔✔ the relative proportion of each type of cost in an organization
variable cost ✔✔ varies, in total, in direct proportion to changes in the level of activity
activity base ✔✔ a measure of whatever causes the incurrence of a variable cost (cost driver)
fixed cost ✔✔ a cost that remains constant, in total, regardless of changes in the level of activity
committed fixed costs ✔✔ represent organizational investments with a multiyear planning
horizon that can't be significantly reduced even for short periods of time without making
fundamental changes
discretionary fixed costs ✔✔ usually arise from annual decisions by management to spend on
certain fixed cost items (advertising, research, PR, etc.)
relevant range ✔✔ the range of activity within which the assumption that cost behavior is
strictly linear is reasonably valid
mixed cost ✔✔ contains both variable and fixed cost elements
differential cost ✔✔ a future cost that differs between any 2 alternatives
verified GrAded A+
cost object ✔✔ anything for which cost data are desired--including products, customers, and
organizational subunits
direct cost ✔✔ a cost that can be easily and conveniently traced to a specified cost object
indirect cost ✔✔ a cost that cannot be easily and conveniently traced to a specified cost object
common cost ✔✔ a cost that is incurred to support a number of cost objects but cannot be
traced to them individually...a type of indirect cost
raw materials ✔✔ the materials that go into the final product
direct materials ✔✔ refers to raw materials that become an integral part of the finished product
and whose costs can be conveniently traced to the finished product
prime cost ✔✔ sum of direct materials & direct labor costs
manufacturing overhead ✔✔ all manufacturing costs EXCEPT direct materials & direct labor
indirect materials ✔✔ raw materials whose costs cannot be easily or conveniently traced to
finished products
indirect labor ✔✔ employees, such as janitors, supervisors, materials handlers, maintenance
workers, and night security guards, that play an essential role in running a manufacturing facility
,conversion cost ✔✔ the sum of direct labor & manufacturing overhead
nonmanufacturing costs ✔✔ 1) selling costs
2) administrative costs
selling costs ✔✔ all costs that are incurred to secure customer orders and get the finished
product to the customer
(i.e. advertising, shipping, sales commissions, etc.)
administrative costs ✔✔ all costs associated with the general management of an organization
rather than with manufacturing or selling (i.e. accounting, secretarial, public relations, etc.)
SG&A ✔✔ non manufacturing costs that are selling, general, & administrative costs
product costs ✔✔ all costs involved in acquiring or making a product. these attach to a unit of
product as it is purchased or manufactured and they stay attached to each unit of product as
long as it remains in inventory awaiting sale
inventoriable costs ✔✔ another word for product costs since they are initially assigned to
inventories
work in process ✔✔ consists of units of product that are only partially complete and will require
further work before they are ready for sale to the customer
finished goods ✔✔ consist of completed units of product that have not yet been sold to
customers
, period costs ✔✔ all the costs that aren't product costs (all selling & administrative expenses)
cost behavior ✔✔ how a cost reacts to changes in the level of activity
cost structure ✔✔ the relative proportion of each type of cost in an organization
variable cost ✔✔ varies, in total, in direct proportion to changes in the level of activity
activity base ✔✔ a measure of whatever causes the incurrence of a variable cost (cost driver)
fixed cost ✔✔ a cost that remains constant, in total, regardless of changes in the level of activity
committed fixed costs ✔✔ represent organizational investments with a multiyear planning
horizon that can't be significantly reduced even for short periods of time without making
fundamental changes
discretionary fixed costs ✔✔ usually arise from annual decisions by management to spend on
certain fixed cost items (advertising, research, PR, etc.)
relevant range ✔✔ the range of activity within which the assumption that cost behavior is
strictly linear is reasonably valid
mixed cost ✔✔ contains both variable and fixed cost elements
differential cost ✔✔ a future cost that differs between any 2 alternatives
