30 Questions
What is a characteristic of variable costs?
They are fixed for a period
How are costs divided in behavioral analysis?
Into controllable and non-controllable costs
What is the term for prime cost plus factory overheads?
Factory on cost
Which item is excluded from cost accounts?
All of the above
How are advertisements treated in cost accounting?
As selling overheads
What type of cost system is used for the manufacture of 20 engraved doors for a golf course?
Batch cost system
What is the term for the guidance and regulation of the cost of operating an undertaking by executive action?
Cost control
What is another term for direct expenses?
Chargeable expenses
Which of the following costs is a part of both prime cost and conversion cost?
Direct material
What is the term for a statement showing the break-up of costs?
Cost-sheet
What is the term for the total of works cost and administration expenses?
Total cost
What type of cost is interest on own capital?
Notional cost
What is the term for the total of all cost items that can be directly charged to product units?
Prime cost
What is the primary objective of cost accounting?
To make better financial decisions
What are the costs that can be directly attributed to a particular product or service?
Chargeable expenses
What is the aggregate of indirect materials, labor, and other costs that cannot be identified conveniently with the articles produced or services rendered?
Factory overhead
What is the total direct cost of production, including raw materials and labor?
Prime cost
What document shows the various components of total cost for a product and shows previous data for comparison?
Cost sheet
What is a sunk cost?
A cost that has already been incurred and cannot be changed
What type of costing is used in the pharmaceutical industry?
Process costing
What is the purpose of computing imputed costs?
To make decisions
What is the primary purpose of cost accounting?
To provide information to management for decision-making
What is the result of adding administrative overhead to works cost?
Cost of production
What is the main objective of cost reduction?
To lower the unit cost of a product
What is an opportunity cost?
The economic value of the benefit sacrificed under one alternative
What is the purpose of relevant cost?
To eliminate unnecessary data that could complicate the decision-making process
What is an example of an imputed cost?
Interest on funds generated internally
What is a characteristic of process costing?
The cost of each product produced is assumed to be the same as the cost of every other product
What is administrative overhead mostly related to?
Office expenses of the business
What is added to the cost of production to get the cost of sales?
Selling and distribution overhead
Test your knowledge of cost accounting concepts, including variable costs, behavioral analysis, and cost classifications. Evaluate your understanding of cost accounting principles and their applications.
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