Cost Accounting: Cost Terminologies and Planning for Cost Control

COST TERMINOLOGIES C1Statement 1Planning is estimating future costs in preparing budgets and in projecting operating activities; Statement 2Cost control is measuring costs incurred;comparing these costs with budgets, goals, targets, or standards;and evaluating differences and minimizing variances aTrue, trueb True, falsecFalse, truedFalse, false D2Statement 1Cost objective is the "why" of cost analysis Statement 2Cost drivers are activities made to achieve output or results aTrue, trueb True, falsecFalse, truedFalse, false A3Statement 1Not all operating costs are period costs Statement 2Merchandise costs are inventoriable costs aTrue, trueb True, falsecFalse, truedFalse, false A4Statement 1A merchandising business purchases products for resale Statement 2A merchandising firm is a link in the physical distribution chain, acting as a wholesaler or a retailer aTrue, trueb False, TruecTrue, FalsedFalse, false B5This is a place where resources are brought together to produce a product aManufacturingbFactorycProducingd None of these C6This is the sum of the products inputs or the total costs of resources used in production during a time period aManufacturingbFactorycProduction costsd None of these A7Statement 1Any expense incurred in an office is an operating expense and a period cost Statement 2Any cost incurred in a factory is a manufacturing cost, an inventoriable cost, and a period cost aTrue, trueb False, TruecTrue, FalsedFalse, false B8Statement 1Cost of goods sold when classified is really an expense and a period cost Statement 2Manufacturing overhead may be called as factory burden or indirect manufacturing costs aTrue, trueb False, TruecTrue, FalsedFalse, false A9Statement 1Traceable costs are direct costs Statement 2Factory overhead applied directly to a specific product is a direct cost aTrue, trueb False, TruecTrue, FalsedFalse, false A10Statement 1A variable cost changes in total in direct proprtion to changes in activity of output Statement 2A fixed cost is constant in total amount regardless of changes in activity level B11These are expenditures that managers can elect to spend or not to spend aOut of pocket costbDiscretionary costcCommitted costd None of these C13This is an expression that mathematically links cost aCost behaviorbCost drivercCost functiondNone of these B14Are the costs incurred when adding an activity aAdd-on cost BIncremental costcMarginal costdNone of these A15Statement 1An indirect cost is a common cost or a joint cost Statement 2A common cost is incurred to benefit more than one activity aTrue, trueb False, TruecTrue, FalsedFalse, false A16Statement 1An unavoidable cost is unescapable cost Statement 2Incremental or marginal costs are fixed costs aTrue, trueb False, TruecTrue, FalsedFalse, false D17A cost which differ when decision choices are compared,If a cost increases, decreases, appears or disappears as different actions are evaluated, such cost is aSunkbDiscretionarycOut of pocket dNone of these D18Any past cost, or committed cost is a/an aOut of pocketbDiscretionarycUnavoidable dNone of these C19Fixed cost is a/an aOut of pocketbDiscretionarycUnavoidable dNone of these D20This is a differential cost where a benefit is foregone by selecting another alternative aOut of pocketbDiscretionarycUnavoidable dNone of these