If a cost increases as the sales volume increases, the cost is a:

Fixed cost

Sunk cost

Direct cost

Variable cost

Which of the following has a direct materials inventory?

Merchandising company

Service company

Manufacturing company

None of these are correct

Which of the following would NOT usually be considered a product cost of a manufacturing

company?

Direct materials

Indirect labor

Property taxes on factory building

Advertising

Which of the following would NOT be included in manufacturing overhead?

Indirect materials

Factory fire insurance

Factory utilities

Direct labor

Utility expense in a merchandising company would be considered a(n):

Manufacturing cost

Indirect cost

Period cost

Product cost

The cost of milk for an ice cream manufacturer would be considered all of the following except:

Indirect cost

Manufacturing cost

Variable cost

Product cost

Costs that are directly traceable to a unit of business or segment being analyzed are called:

Variable costs

Sunk costs

Overhead costs

Direct costs

You are thinking about taking a trip to Asia. The cost of the airplane ticket you have yet to purchase is a(n):

Direct cost

Opportunity cost

Sunk cost

Differential cost

You want to go skiing for the day. However, you realize you are scheduled to work. If you call in sick and do not go to work, the wages you will not earn (assuming you are an hourly employee) are considered a(n):

Opportunity cost

Out-of-pocket cost

Sunk cost

Differential cost

Which of the following costs should not be considered when making a future decision?

Fixed costs

Indirect costs

Opportunity costs

Sunk costs