Section 5 - Chap 1&2 - AEM 323 Section Problem Set...

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AEM 323 Section Problem Set 5 Problem 1 Match the following terms to the corresponding definition. 1. __ Controlling a. varies to changes in level of activity 2. __ Raw materials b. cost that has already been incurred and cannot be changed in future 3. __ Indirect labor c. direct materials + direct labor 4. __ Conversion cost d. goods that are completed and ready for sale 5. __ Nonmanufacturing costs e. labor that cannot be physically traced to individual units of goods 6. __ Product costs (Inventoriable costs) f. cannot be easily traced to the particular cost object 7. __ Manufacturing costs g. direct labor + manufacturing overhead 8. __ Prime cost h. total remains constant regardless of level of activity 9. __ Work in process i. direct materials + direct labor + manufacturing overhead 10. __ Finished goods j. difference in cost between two alternatives 11. __ Variable costs k. partially completed goods that require further work before sale to customers 12. __ Fixed costs l. all costs associated with creating the product 13. __ Indirect cost m. ensuring that everything is going as planned (managerial function) 14. __ Differential cost n. any material used in the final Product 15. __ Sunk cost o. selling and administrative costs 1
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Problem 2 a. Define the following costs as fixed or variable and direct or indirect in regards to the product Cost Variable Fixed Direct
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Section 5 - Chap 1&2 - AEM 323 Section Problem Set...

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