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Concepts and terminology From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences: a. Advertising costs are usually viewed as (period, product) costs. b. Feedback is often used to (improve, direct) operations. c. Payments of cash or the commitment to pay cash in the future for the purpose of generating revenues are (costs, expenses). d. A product, a sales territory, a department, or an activity to which costs are traced is called a (direct cost, cost object). e. The balance sheet of a manufacturer would include an account for (cost of goods sold, work in process inventory). f. Factory overhead costs combined with direct labor costs are called (prime, conversion) costs. g. The implementation of automatic, robotic factory equipment normally (increases, decreases) the direct labor component of product costs.

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 18, Problem 18.5EX
Textbook Problem

Concepts and terminology

From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences:

a. Advertising costs are usually viewed as (period, product) costs.

b. Feedback is often used to (improve, direct) operations.

c. Payments of cash or the commitment to pay cash in the future for the purpose of generating revenues are (costs, expenses).

d. A product, a sales territory, a department, or an activity to which costs are traced is called a (direct cost, cost object).

e. The balance sheet of a manufacturer would include an account for (cost of goods sold, work in process inventory).

f. Factory overhead costs combined with direct labor costs are called (prime, conversion) costs.

g. The implementation of automatic, robotic factory equipment normally (increases, decreases) the direct labor component of product costs.

Expert Solution
To determine

Period costs:

Period costs are the costs other than the product costs. These costs are not incurred in manufacturing the goods. These costs include the administrative expenses, and selling expenses.

Cost object:

A cost object is something to which costs are assigned, it is often a product lines or customers department for which costs are accumulated or measured by the management.

Conversion cost:

A conversion cost refers to the cost of converting the raw materials into a finished product. Conversion cost includes direct labor as well as factory overhead costs.

To choose: The appropriate term for completing each of the following sentences.

Explanation of Solution

The appropriate term for completing each of the following sentences:

a. Period
b. Improve
c. Costs
d. Cost object
e. Work in process inventory
f. Conversion
g. Decreases

Table (1)

  1. a. Period costs include the administration costs, and the selling costs. As the Advertising costs are the selling costs, they are usually viewed as period costs.
  2. b. By receiving the feedback, the Company can improve on the areas wherever it needs attention. Hence, feedback is often used to improve the operations, and not to direct the operations.
  3. c. No revenues are generated when the cash is paid for expenses, but when costs are paid, the revenues will be generated...

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Chapter 18 Solutions

Accounting
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Ch. 18 - Management process Three phases of the management...Ch. 18 - Management process Three phases of the management...Ch. 18 - Direct materials, direct labor, and factory...Ch. 18 - Direct materials, direct labor, and factory...Ch. 18 - Prime and conversion costs Identify the following...Ch. 18 - Prime and conversion costs Identify the following...Ch. 18 - Product and period costs Identify the following...Ch. 18 - Product and period costs Identify the following...Ch. 18 - Cost of goods sold, cost of goods manufactured...Ch. 18 - Cost of goods sold, cost of goods manufactured...Ch. 18 - Classifying costs as materials, labor, or factory...Ch. 18 - Classifying costs as materials, labor, or factory...Ch. 18 - Classifying costs as factory overhead Which of the...Ch. 18 - Classifying costs as product or period costs For...Ch. 18 - Concepts and terminology From the choices...Ch. 18 - Concepts and terminology From the choices...Ch. 18 - Classifying costs in a service company A partial...Ch. 18 - Sustainability and eco-efficiency measures Four...Ch. 18 - Classifying costs The following report was...Ch. 18 - Financial statements of a manufacturing firm The...Ch. 18 - Manufacturing company balance sheet Partial...Ch. 18 - Cost of direct materials used in production for a...Ch. 18 - Cost of goods manufactured for a manufacturing...Ch. 18 - Cost of goods manufactured for a manufacturing...Ch. 18 - Income statement for a manufacturing company Two...Ch. 18 - Statement of cost of goods manufactured for a...Ch. 18 - Cost of goods sold, profit margin, and net income...Ch. 18 - Cost flow relationships The following information...Ch. 18 - Uses of managerial accounting in a service company...Ch. 18 - Classifying costs The following is a list of costs...Ch. 18 - Classifying costs The following is a list of costs...Ch. 18 - Cost classifications for a service company A...Ch. 18 - Manufacturing income statement, statement of cost...Ch. 18 - Statement of cost of goods manufactured and income...Ch. 18 - Classifying costs The following is a list of costs...Ch. 18 - Classifying costs The following is a list of costs...Ch. 18 - Cost classifications for a service company A...Ch. 18 - Manufacturing income statement, statement of cost...Ch. 18 - Statement of cost of goods manufactured and income...Ch. 18 - Ethics in Action Avett Manufacturing Company...Ch. 18 - Communication Todd Johnson is the vice president...Ch. 18 - Managerial accounting in the management process...Ch. 18 - Classifying costs Geek Gut Company provides...Ch. 18 - Using managerial accounting Information The...

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