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, lnventoriable product costs, Assigned, Direct costs, Fringe beneﬁts, Period costs, Assets, Cost of goods sold, Indirect costs, Conversion costs, Total costs
Indirect costs cannot be directly traced to a(n) cost object
Total costs include the costs of all resources used throughout the value chain.
GAAP requires companies to use only inventoriable product costs for inventory reported on external ﬁnancial statements.
Company-paid fringe benefits may include health insurance, retirement plan contributions, payroll taxes, and paid vacations.
When manufacturing companies sell their finished products, the costs of those finished products are removed from inventory and expensed as cost of goods sold.
Conversion costs are the cost of transforming direct materials into finished goods.
Period costs include R&D, marketing, distribution and customer service costs.
Direct material plus direct labor equals prime costs.
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 direct costs of the vehicles.
Costs that can be directly traced to a(n) cost object are called direct costs.
inventoriable product costs are initially treated as assets on the balance sheet.
The allocation process results in a less precise cost figure being assigned to the cost objects
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