Merchandising
firms consider which of the following cost elements as a period cost?
ANSWER
INCORRECT
·

Cost of shipping merchandise to
the store
·

YOU WERE SURE AND INCORRECT
Cost of merchandise purchased
for resale
·

THE CORRECT ANSWER
Cost of leasing the retail
locations
·

Cost of import duties paid on
merchandise purchased from overseas suppliers
·

I DON'T KNOW YET
Identify
the indirect cost element, assuming the cost object is one factory in which a
product is manufactured for a large corporation.
ANSWER
INCORRECT
·

Materials to produce units
manufactured in the factory
·

Factory supervisor’s salary
·

YOU WERE SURE AND INCORRECT
Assembly labor used in the
factory
·

THE CORRECT ANSWER
CEO’s salary
·

I DON'T KNOW YET
________ are costs that relate to the cost
object but cannot be traced specifically to the cost object.
ANSWER
INCORRECT
·

THE CORRECT ANSWER
Indirect costs
·

Cost objects
·

YOU WERE SURE AND INCORRECT
Labor costs to assemble units
·

Direct costs
·

I DON'T KNOW YET
The ________ is the cost of making one more unit.
ANSWER
INCORRECT
·

total cost
·

average cost
·

YOU WERE SURE AND INCORRECT
product cost
·

THE CORRECT ANSWER
marginal cost
·

I DON'T KNOW YET
An example of a service company includes
________.
ANSWER
INCORRECT
·

General Motors Corporation
·

Best Buy
·

THE CORRECT ANSWER
Verizon
·

YOU WERE SURE AND INCORRECT
Sam’s Club
·

I DON'T KNOW YET
Merchandising
firms consider which of the following cost elements as a period cost?
ANSWER
INCORRECT
·

THE CORRECT ANSWER
Cost of leasing the retail
locations
·

Cost of merchandise purchased
for resale
·

Cost of shipping merchandise to
the store
·

YOU WERE SURE AND INCORRECT
Cost of import duties paid on
merchandise purchased from overseas suppliers
·

I DON'T KNOW YET
A
direct cost ________.
ANSWER
INCORRECT
·

THE CORRECT ANSWER
is a cost that can be traced to
the cost object
·

YOU WERE SURE AND INCORRECT
is always expensed in the period in which it is incurred and never becomes part of an inventory account
·

includes the costs of all
resources used throughout the value chain
·

never has a one-to-one
correlation between the cost and the cost object
·

I DON'T KNOW YET
Identify
the indirect cost element, assuming the cost object is one factory in which a
product is manufactured for a large corporation.
ANSWER
INCORRECT
·

THE CORRECT ANSWER
CEO’s salary
·

YOU WERE SURE AND INCORRECT
Materials to produce units
manufactured in the factory
·

Factory supervisor’s salary
·

Assembly labor used in the
factory
·

I DON'T KNOW YET
Merchandising
firms consider which of the following cost elements as a period cost?
ANSWER
INCORRECT
·

THE CORRECT ANSWER
Cost of leasing the retail
locations
·

Cost of import duties paid on
merchandise purchased from overseas suppliers
·

Cost of shipping merchandise to
the store
·

YOU WERE SURE AND INCORRECT
Cost of merchandise purchased
for resale
·

I DON'T KNOW YET
A
direct cost ________.
ANSWER
INCORRECT
·

is always expensed in the period in which it is incurred and never becomes part of an inventory account
·

never has a one-to-one
correlation between the cost and the cost object
·

YOU WERE SURE AND INCORRECT
includes the costs of all
resources used throughout the value chain
·

THE CORRECT ANSWER
is a cost that can be traced to
the cost object
·

I DON'T KNOW YET
Utilities,
plant insurance, and depreciation expense are examples of ________.
ANSWER
INCORRECT
·

YOU WERE SURE AND INCORRECT
period expenses
·

administrative expenses
·

THE CORRECT ANSWER
other indirect manufacturing
costs
·

costs that are expensed as
incurred
·

I DON'T KNOW YET
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