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8. Direct costs are those costs that cannot be easily and accurately traced to a cost object.
ANS: F
Direct costs are those costs that can be easily and accurately traced to a cost object.
9. Indirect costs are costs that are not easily and accurately traced to a cost object.
10. Allocation means that an indirect cost is assigned to a cost object using a reasonable and convenient
method.
11. A variable cost is one that does not increase in total as output increase and does not decrease in total as
output decreases.
ANS: F
A variable cost is one that does increase in total as output increase and does not decrease in total as
output decreases.
12. A fixed cost is a cost that does not increase in total as output increases and does not decrease in total as
output decreases.
14. Cost is a dollar measure of the resources used to achieve a given benefit.
15. A cost object is something for which a company wants to know the cost.
ANS: F
The revenue per unit is called price.
17. As costs are used up in the production of revenues, they are said to expire. Expired costs are called
expenses.
20. Reducing the cost required to achieve a given benefit means that a company is becoming less efficient.
ANS: F
Costs can be assigned to cost objects in a number of ways.
22. Property taxes on a factory building would normally be classified as a fixed cost.
23. Glue used in the manufacture of cabinets would be an example of a fixed cost.
ANS: F
Glue used in the manufacture of cabinets would be an example of a variable cost.
24. Industries that provide intangible services do not normally have direct contact with their customers.
ANS: F
Research and development costs would be classified as period costs.
Author: Various
Language: English
Credits: Charlene Taylor, David Garcia, Jon Ingram and the Online
Distributed Proofreading Team at https://www.pgdp.net (This
file was produced from images generously made available by
The Internet Library of Early Journals. Noted on site that this
resource is no longer available.)
THE BUILDER.
PRECURSOR NUMBER.
THIRD IMPRESSION OF FIVE THOUSAND.