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Match the Following Descriptions with the Appropriate Term

Question 126

Matching

Match the following descriptions with the appropriate term.

Premises:

Responses:

Costs that the segment manager can control

Absorption costing

Sales minus the variable cost of goods sold

Common costs

A cost that has been incurred and will not change as a result of a decision

Contribution margin

The accounting procedure whereby all manufacturing costs, including fixed costs, are included in the cost of goods manufactured

Controllable fixed costs

Potential earnings or benefits that are given up because a certain course of action is take

Differential cost

The difference in cost between one alternative and another

Direct costing

The manufacturing margin minus variable operating expenses

Manufacturing margin

Costs not directly traceable to a specific segment of a business

Marginal income

The accounting procedure whereby only variable costs are included in the cost of goods manufactured, and fixed manufacturing costs are written off as expenses in the period in which they are incurred

Opportunity cost

Revenues minus variable costs

Sunk cost

Premises:

Costs that the segment manager can control

Sales minus the variable cost of goods sold

A cost that has been incurred and will not change as a result of a decision

The accounting procedure whereby all manufacturing costs, including fixed costs, are included in the cost of goods manufactured

Potential earnings or benefits that are given up because a certain course of action is take

The difference in cost between one alternative and another

The manufacturing margin minus variable operating expenses

Costs not directly traceable to a specific segment of a business

The accounting procedure whereby only variable costs are included in the cost of goods manufactured, and fixed manufacturing costs are written off as expenses in the period in which they are incurred

Revenues minus variable costs

Responses:

Absorption costing

Common costs

Contribution margin

Controllable fixed costs

Differential cost

Direct costing

Manufacturing margin

Marginal income

Opportunity cost

Sunk cost

Correct Answer:

Premises:

Responses:

Costs that the segment manager can control

Sales minus the variable cost of goods sold

A cost that has been incurred and will not change as a result of a decision

The accounting procedure whereby all manufacturing costs, including fixed costs, are included in the cost of goods manufactured

Potential earnings or benefits that are given up because a certain course of action is take

The difference in cost between one alternative and another

The manufacturing margin minus variable operating expenses

Costs not directly traceable to a specific segment of a business

The accounting procedure whereby only variable costs are included in the cost of goods manufactured, and fixed manufacturing costs are written off as expenses in the period in which they are incurred

Revenues minus variable costs