Chapter 2, Problem 2P

Given below is a numbered list of cost terms. For each of the definition statements that follow, place the number of the cost term in the blank that makes the statement a correct definition. Each cost term is used only once. (2.1)

Numbered List of Cost Terms:

1. 1. Recurring
2. 2. Variable
3. 3. Fixed
4. 4. Sunk
5. 5. Opportunity
6. 6. Incremental
7. 7. Direct
8. 8. Nonrecurring
9. a. ______costs are those that have occurred in the past and have no relevance to estimates of future costs and revenues.
10. b. ______costs are incurred because of the use of limited resources such that the ability to use those resources to monetary advantage in another way is foregone.
11. c. ______costs are those which are unaffected by changes in activity level over a feasible range of operations for the capacity available.
12. d. _____costs, in total, change in relation to the quantity of output or other measures of activity level.
13. e. ______cost refers to the additional cost that will result from increasing the output of a system by one or more units.
14. f. ______costs are those that are repetitive and occur when goods or services are produced on a continuing basis.
15. g. ______costs can be reasonably measured and allocated to a specific output or work activity.
16. h. ______costs are not repetitive even though the total expenditure may be cumulative over a relatively short period of time.