Cost as to behavior
A milk tea shop spends ₱25 on tapioca pearls, plastic cups, and syrup for every single cup of milk tea it brews, so as milk tea sales increase, the total cost of these ingredients is a____.
Variable Cost
A factory produces school bags instead of backpacks, so the _______ is the income it gave up from not making backpacks.
Opportunity cost
A company records the actual cost of materials, labor, and overhead only after the product has been completed.
Historical Costing
A furniture company uses wood to make a table, so the wood is a ________ because it becomes part of the finished product.
Direct Material
A company pays for office rent, factory electricity, and delivery vehicle maintenance, which cannot be directly traced to one product. What is this?
Overheads
A commercial printing shop pays a mandatory ₱45,000 building rent every month whether it prints 1 page or 100,000 school reviewers, making the monthly rent a____.
Fixed Cost
A bakery is already producing 100 loaves of bread and decides to bake one more loaf; the cost of the extra flour, yeast, and labor needed to make that additional loaf is the?
Marginal Cost
Before production starts, a company estimates that each table will cost ₱2,500 to make for planning and budgeting purposes.
Predetermined Cost
A carpenter builds the table, so the carpenter’s wages are ________ because they directly make the product.
Direct Labor
A furniture factory pays the salary of the factory supervisor who oversees production but does not make the tables. What type of overhead is this?
Factory Overhead
A factory incurs ₱300,000 in annual equipment depreciation from a long-term multi-year lease that cannot be reduced or canceled in the short term, making this expense a____.
Committed Fixed Cost
A factory temporarily closes due to low demand, but it still has to pay ₱200,000 per month for security, building maintenance, and insurance.
Shutdown Cost
This is a regular cost incurred during the normal day to day operation. For example: A factory pays its workers’ regular monthly salaries because production is running as usual.
Normal Cost
A factory uses glue and nails to make tables, so the glue and nails are _______ because they are small materials that are hard to trace to one table.
Indirect Material
A company pays the salary of the office accountant who prepares financial reports. What type of overhead is this?
Administrative Overhead
A corporate management team sets a ₱500,000 annual budget for executive team-building workshops and advertising that can be easily slashed or eliminated at any time during a crisis, so this budget is a____.
Discretionary Fixed Cost
The store manager wants to reduce the taxes the business pays, but the tax rates are set by the government, so taxes are an____.
Uncontrollable Cost
A factory spends extra money repairing machines after a flood, which is not part of its regular operations.
Abnormal Cost
A factory security guard helps keep the factory safe but does not make the tables, so the guard’s salary is_______.
Indirect Labor
A company pays delivery truck fuel and sales staff salaries to sell and deliver its products to customers. What type of overhead is this?
Selling and Distribution Overhead
A delivery business pays a monthly telephone bill consisting of a ₱1,500 base line fee plus ₱3 for every additional minute of international calls made, so a bill with both fixed and variable components is a____.
Mixed (Semi-Variable Cost
A company is deciding whether to continue producing its regular chairs or accept a custom-made chair order. The additional ₱15,000 needed for the custom-made order is the?
Relevant Cost
A company wants to know how much it costs to make one table, so the table is the ______ because it is the item whose cost is being measured.
Cost Object
Are expenses which can be directly allocated to a particular product, cost center or unit of service. A company rents a special machine used only for a custom-made table order. This cost is a ______.
Direct Expense