A) A direct cost can be readily traced to a cost object while an indirect cost is traced only to manufacturing costs.
B) An indirect cost can be readily traced to a cost object while a direct cost is traced only to manufacturing costs.
C) A direct cost can be traced to a specific cost object, while an indirect cost cannot.
D) An indirect cost can be traced to a specific cost object, while a direct cost cannot.
63) A direct cost is one that:
A) involves an actual outlay of cash for a specific cost object.
B) can be traced to a specific cost object.
C) cannot be traced to a specific cost object.
D) is not worth the effort of tracing to a specific cost object.
64) What determines the difference between a direct and an indirect cost?
A) Whether it changes when activity levels change.
B) Whether it is relevant to a particular decision.
C) Whether it can be conveniently traced to a specific cost object.
D) Whether it is related to manufacturing or nonmanufacturing activities.
65) Which of the following is an indirect cost of manufacturing a table made of wood and glass for a firm that manufactures furniture?
A) The cost of the wood in the table.
B) The cost of the labor used to assemble the table.
C) The cost of the glass in the table.
D) The cost of rent on the factory where the table is manufactured.
66) Which of the following is a direct cost of manufacturing a table made of wood and glass for a firm that manufactures furniture?
A) The cost of the wood in the table.
B) The cost of rent on the factory where the table is manufactured.
C) The salary of the supervisor who oversees all production for the firm.
D) Depreciation on the tools used to manufacture the table.
67) A cost object is:
A) an item for which managers are trying to determine the cost.
B) an item to which managers must directly trace costs.
C) an item to which it is not worth the effort of tracing costs.
D) an item for sale by a business.
68) Indirect costs are:
A) costs that are not worth the effort to trace to a specific cost object.
B) costs that change, in total, in direct proportion to changes in activity levels.
C) always irrelevant.
D) costs that remain constant no matter the activity level.
69) Variable costs are: