AC Final Exam with Solutions

Labor costs that clearly associated with specific units of product because the labor is used to convert raw materials into finished products are called - direct labor The measurement of key relations among financial statement items is known as: - ratio analysis An accounting system that is set up to control costs by assigning cost to the managers responsible controlling them - responsibility accounting Document in a job order costing system used to record the costs of producing a job - job cost sheet The three major cost components of a manufactured product are: - direct materials, direct labor, overhead Products that have been completed and are ready to be sold by the manufacturer are called: - finished goods inventory Purchased to be used in the production of finished goods - direct materials inventory Tires in car manufacturing - direct materials inventory Products purchased for resale - merchandise inventory Comparison of company’s financial performance across time - horizontal analysis The ability to generate future revenues and meet long-term obligations is referred to as: - solvency The ability to meet short-term obligations and to efficiently generate revenues is called: - liquidity Base amount used when performing vertical analysis on an income statement -