Cost Manufacturing costs Indirect costs Full Cost Method

Cost Object Product Costs Standard costs Relevant Costs

Cost Pools Period costs Budgeted costs Incremental Costs

Cost Driver Variable costs Absorption costing Opportunity Costs

Cost Behavior Fixed costs Direct costing

Cost Analysis Direct costs Variable Costing

1. It is a sacrifice of resources and generally represented in the accounting system by

outlay of cash or promises to pay cash In the future or the expectation of the value of
an asset
2. Costs that change directly in proportion to changes in activity
3. Costs that are not directly or easily traceable to the cost object
4. Used to represent the expected/planned cost
5. All the cost that are identified with accounting periods and not included in the
product costs
6. The value of the best alternative foregone as the result of selecting a different use of
resource or by choosing a particular strategy
7. Future costs that are different under one decision alternative than under another
decision alternative
8. A costing method that includes all manufacturing costs both variable and fixed in the
cost of a unit of product; it is also referred to as _____.
9. Costs associated with production of goods
10. Costs collected into meaningful groups
11. Costs that remain unchanged for a given time period regardless of change in activity
12. Costs that can be economically traced to a single cost object
13. A type of product costing where fixed costs are charged against revenue as incurred
and are not assigned to specific units of product manufactured; also referred to as
_____.
14. Any factor that has the effect of changing the level of total cost
15. Any product, service, or organizational unit to which costs are assigned
16. It includes all the costs that are involved in acquiring or making a product
17. A predetermined cost estimate that should be attained; usually expressed in terms of
cost per unit
18. The difference in cost between two or more alternatives
19. It means how a cost will react as changes take place in the level of business activity
20. It is an integral part of the planning and control function
a) Value Chain is the set of activities that transforms raw resources into the goods and
services that end users purchase and consume and the treatment or disposal of any
waste generated by them
b) High-low method is the statistical technique that analyzes the relationship between
independent and dependent variables
c) Competence means that individuals will refrain from disclosing company information to
inappropriate parties
d) Cost of goods manufactured is equal to the cost where in the conversion area at the
beginning of the period plus production costs incurred during the period minus the cost
of incomplete goods that remain in the conversion area at the end of the period
e) Relevant range is the assumed range of activity that reflects the company’s fluctuating
operating range
f) Cost-volume-profit analysis is the process of examining shifts in cost and volume and the
resulting effects on profit
g) Cost analysis is understanding how total cost behaves relative to a change in a related
activity measure
h) Financial accounting is designed to meet the external information needs and to comply
with generally accepted accounting principles
i) Contribution margin is the difference between the total revenues and total variable
expenses
j) Cost assignment is the assignment of indirect costs to one or more cost objects using
reasonable cost driver

MONTH MACHINE HOURS UTILITY COST

January 7,260 2,960
February 8,850 3,410
March 4,800 1,920
April 9,000 3,500
May 4,900 1,860
June 4,600 2,180
July 8,900 3,470
August 5,900 2,480
September 5,500 2,310

Required:

Separate mixed cost (show the value of fixed cost, variable cost per unit, and mixed cost
formula)

1. High-Low Method
2. Least Regression Square