S2-5 Define cost terms (Learning Objectives 3 & 4)

Complete the following statements with one of the terms listed here. You may use a term more than once, and some terms may not be used at all.

Prime costs Cost objects Inventoriable product costs Assigned Direct costs Fringe benefits Period costs Assets Cost of goods sold Indirect costs Conversion costs Total costs

a. ________ cannot be directly traced to a(n) ________.

b. ________ include the costs of all resources used throughout the value chain.

c. GAAP requires companies to use only ________________ for inventory reported on external financial statements.

d. Company-paid ________ may include health insurance, retirement plan contributions, payroll taxes, and paid vacations.

e. When manufacturing companies sell their finished products, the costs of those finished products are removed from inventory and expensed as ________________.

f. ________ are the costs of transforming direct materials into finished goods.

g. ________ include R&D, marketing, distribution, and customer service costs.

h. Direct material plus direct labor equals ________.

i. Steel, tires, engines, upholstery, carpet, and dashboard instruments are used in the assembly of a car. Since the manufacturer can trace the cost of these materials (including freight-in and import duties) to specific units or batches of vehicles, they are considered ________ of the vehicles.
j. Costs that can be traced directly to a(n) ________ are called ________.
k. ________ are initially treated as ________ on the balance sheet.
l. The allocation process results in a less precise cost figure being ________ to the ________.