Exam 2: An Introduction to Cost Terms and Purposes

Butler Hospital wants to estimate the cost for each patient stay. It is a general health care facility offering only basic services and not specialized services such as organ transplants. Required: a.Classify each of the following costs as either direct or indirect with respect to each patient. b.Classify each of the following costs as either fixed or variable with respect to hospital costs per day.

Expert Manufacturing reported the following: How much of the above would be considered period costs for Expert Manufacturing?

Finished goods inventory would normally include ________.

Which of the following statements is true?

U.S. Systems Inc., had the following activities during 2018: Required: a.What is the cost of direct materials used during 2018? b.What is cost of goods manufactured for 2018? c.What is cost of goods sold for 2018? d.What amount of prime costs was added to production during 2018? e.What amount of conversion costs was added to production during 2018?

Which one of the following is a variable cost for an insurance company?

Although unit costs are regularly used in financial reports and for making product mix and pricing decisions, managers should think in terms of total costs rather than unit costs for making decisions.

All Rite Manufacturing reported the following: What is Leslie's cost of goods sold?

When making decisions for product mix and pricing, the focus should be on total costs and not unit costs.

Which of the following is a cost driver for a company's human resource costs?

Which of the following is true if the volume of sales increases (within a relevant range)?

Work-in-process inventory are goods partially worked on but not yet completed.

Which of the following companies is part of the manufacturing sector of our economy?

Which of the following companies is part of the merchandising sector of our economy?

A unit cost is also called an average cost.

What is the cost of goods manufactured for 2018?

Total manufacturing costs are comprised of ________.

Acquisition costs of direct materials include freight-in charges, sales taxes, and custom duties.

Wonderful Products Manufacturing Corp. provided the following information for last month: If sales reduce to half of the amount in the next month, what is the projected operating income?

Indirect manufacturing costs are also referred to as manufacturing overhead costs or factory overhead costs.