Workshop 1 Flashcards
(6 cards)
1
Q
What is the matching principle?
A
product costs are recognized as expenses in the same period the related revenue is earned.
2
Q
How are utilities generally reported?
A
Utilities are generally reported as indirect variable costs
3
Q
How are prime and conversion costs generally reported?
A
They tend to be reported as direct labor costs
4
Q
Name four different types of cost drivers?
A
- Volume-based cost drivers
- Activity-based cost drivers
- Executional cost drivers
- Structural cost drivers
5
Q
How do you calculate conversion costs?
A
Direct Labor + Overhead costs
6
Q
How do you calculate gross margin?
A
Sales - Conversion costs - Direct materials
