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1. It is beneficial to assign indirect costs to cost objects. a. True b. False ANSWER: True 2. Price must be greater than cost in order for the firm to generate revenue. a. True b. False ANSWER: False 3. Accumulating costs is the way that costs are measured and recorded. a. True b. False ANSWER: True 4. Assigning costs involves the way that a cost is linked to some cost object. a. True b. False ANSWER: True 5. Assigning costs tells the accountant who spent the money. a. True b. False ANSWER: False 6. A cost object is any item such as products, customers, departments, regions, and so on, for which costs are measured and assigned. a. True b. False ANSWER: True 7. Costs are directly, not indirectly, associated with cost objects. a. True b. False ANSWER: False 8. Direct costs are those costs that cannot be easily and accurately traced to a cost object. a. True b. False ANSWER: False RATIONALE: Direct costs are those costs that can be easily and accurately traced to a cost object. CengageLearningTesting,PoweredbyCognero Page1 Chapter 2 - Basic Managerial Accounting Concepts
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Also: In accounting, direct labor (DL) costs are the costs associated with paying workers to make a
product or provide a service. The workers must be clearly involved in producing the product or providing the service. Direct labor costs are one of the costs
associated with producing a product or providing a service. Furthermore, direct labor costs are in contrast to indirect labor costs. Indirect labor costs are costs associated with workers who are necessary, but they are not directly involved
with making the product or providing the service.
Direct Labor and Overhead AllocationSometimes it may be appropriate to use direct labor as a cost driver to allocate indirect costs to a production process. Overhead AllocationIndirect costs, such as overhead costs, are not directly traceable to the final product; however they are necessary for the production of the process. As a result, they must be incorporated in the overall cost of the product. In addition, allocate indirect costs to the final product by way of a cost driver. Direct LaborIn production, processes in which direct labor is an appropriate cost driver, allocate indirect costs to the cost of units of output via DL hours. Then, allocate indirect costs to the units of output using a cost driver rate. For example, it could be $2 dollars per hour of direct labor, or $0.40 per hour of direct labor,
depending on the specifics of the production process. [box]Strategic CFO Lab Member Extra Access your Projections Execution Plan in SCFO Lab. The step-by-step plan to get ahead of your cash flow. Click here to access your Execution Plan. Not a Lab Member? Click here to learn more about SCFO Labs[/box] Source: Hilton, Ronald W., Michael W. Maher, Frank H. Selto. “Cost Management Strategies for Business Decision”, Mcgraw-Hill Irwin, New York, NY, 2008.
August 2, 2022 Economics
back in January 2021 Back in early 2021 there were certain signs that the economy was going to change in some way, and many predicted this change would not be positive. Post Pandemic in January 2021 the U.S. Government continued to pour billions of dollars into the economy by printing more money. Economics 101 Read More » June 9, 2022 Hiring the right accountant When I meet a business owner operating at a successful $10 million in revenue, they often mention, “My CPA”… I immediately know that CEO/Entrepreneur is referring to their Tax CPA. That is because one thing that all Entrepreneurs have in
common is that they must file a tax return. So, from Read More » September 24, 2021 See also:Quick Ratio AnalysisPrice to Book Value AnalysisPrice Earnings Growth Ratio
AnalysisTime Interest Earned Ratio Analysis Use of Financial Ratios Financial Ratios are used to measure financial performance against standards. Analysts compare financial ratios to industry averages (benchmarking), industry standards or rules of thumbs and against internal trends (trends analysis). The most useful comparison when Read More »
JOIN OUR NEXT SERIES Financial Leadership Workshop THE ART OF THE CFO® Financial Leadership Workshop Which of the following is an example of a direct labor cost?Direct labor refers to the salaries and wages paid to workers that can be directly attributed to specific products or services. It includes the cost of regular working hours, overtime hours worked, payroll taxes, unemployment tax, Medicare, employment insurance, etc.
Which of the following is an example of direct Labour?Option 1. is the correct answer. A restaurant's primary products are the foods cooked by a chef, so, there is a direct involvement in the conversion of materials into a finished food product. Accordingly, it is direct labor.
Which of the following is an example of direct labor cost in a factory?2. Direct labor. Direct labor costs are the wages, benefits, and insurance that are paid to employees who are directly involved in manufacturing and producing the goods – for example, workers on the assembly line or those who use the machinery to make the products.
What is direct labor quizlet?direct labor. the portion of labor cost that can be easily traced to individual units of a product.
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