Questions:
1. Where a specific product is the cost object, the materials used to manufacture the product would probably be classified as a(n) _____.
a. direct, variable cost
b. direct, fixed cost
c. indirect, variable cost
d. indirect, fixed cost
2. _____ is a name for a system that first accumulates overhead costs for each of the activities of an organization, and then assigns the costs of activities to the products, services, or other cost objects that caused that activity.
a. Activity based costing
b. Cost driver accounting
c. Transaction based accounting
d. Transaction costing
3. _____ is the process of measuring products, services, and activities against the best levels of performance.
a. Value-adding
b. Activity-based costing
c. Benchmarking
d. Continuous improvement
4. Couch Company can produce either product A or product B. If Couch Company produces product A, expected direct material cost would be $24,000. If Couch Company produces product B, expected direct material cost would be $24,000. In choosing between these alternatives, the $24,000 direct material cost is _____.
a. relevant because it is an expected future cost
b. relevant because it is a product cost
c. irrelevant because it is an estimated cost
d. irrelevant because it does not differ between alternatives