o. Which of the following terms could be used to correctly describe the wages pa
ID: 2600708 • Letter: O
Question
o. Which of the following terms could be used to correctly describe the wages paid to system? entry clerk who enters customer order information into the company's computer Product Cost Yes Period Cost )Yes No Yes No D) A. A B. B C. C D. D 7. The Jabba Company manufactures the "Snack Buster" which consists of a wooden snack chip bowl with an attached porcelain dip bowl. Which of the following wo relevant in Jabba's decision to make the dip bowls or buy them from an outside supplier? would be Fixed overhead cost th at can be eliminated if the bowls are purchased The variable selling cost of the Snack Buster from the outside supplier A. B. C. D. Yes Yes No No Yes No Yes No 8. Which of the following costs are always irrelevant in decision making? A. avoidable costs unk costs C. opportunity costs D. fixed costs 9. An example of a period cost is: fire insurance on a factory building. B. wages of the plant security guard C. Cost of a toll-free telephone line for customer inquiries regarding the products manufactured D. None of the aboveExplanation / Answer
6) Which of the following terms could be used to correctly describe the wages paid to the data entry clerk who enters customer order information into the company's computer system?
Solution: Choice B
Explanation: Product costs are necessary costs required in the process of product manufacturing. Period costs are not a necessary part of product manufacturing
7) The Jabba Company manufactures the "Snack Buster" which consists of a wooden snack chip bowl with an attached porcelain dip bowl. Which of the following would be relevant in Jabba's decision to make the dip bowls or buy them from an outside supplier?
Solution: Part-B
Explanation: Fixed overhead cost that can be eliminated if bowls are purchased from the outside supplier is relevant as will affect the decision; and variable selling cost of the Snack Buster is irrelevant.
8) Which of the following costs are always irrelevant in decision making?
Solution: Sunk cost
Explanation: These are irrelevant for decisions, because they cannot be changed
9) An example of a period cost is
Solution: Cost of a toll-free telephone line for customer inquiries regarding the products manufactured
Explanation: Period cost cannot be capitalized into inventory, prepaid expenses, or fixed assets; and are simpler to attribute to times and accounting periods in comparison to the actual processes of production or finished goods
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