Classifying Costs by Behavior with Changes in Volume of Activity

question 116

Multiple Choice

Classifying costs by behavior with changes in volume of activity involves:

• A)Identifying fixed cost and variable cost.
• B)Identifying cost of goods sold and operating costs.
• C)Identifying costs as financial or managerial.
• D)Identifying costs in a physical manner.
• E)Identifying both quantitative and qualitative cost factors.

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Definitions:

Manufacturing Equipment

Machinery and tools that are used in the process of producing goods.

Manufacturing Overhead

The indirect costs associated with manufacturing that are not directly tied to the production of specific goods, such as maintenance, utilities, and salaries of supervisors.

Sheet Steel

Thin, flat steel that is made in sheets, used in a wide range of industries including construction and manufacturing.

Cost Of Goods Manufactured

The manufacturing costs associated with the goods that were finished during the period.