Cost Accounting Quiz

What is a characteristic of variable costs?

They are fixed for a particular process of production
They are fixed per unit
They are fixed for a period (correct)
They depend on the entity

How are costs divided in behavioral analysis?

Into fixed and variable costs
Into direct and indirect costs
Into controllable and non-controllable costs (correct)
Into production and non-production costs

What is the term for prime cost plus factory overheads?

Conversion cost
Factory on cost (correct)
Marginal cost
Factory cost

Which item is excluded from cost accounts?

All of the above (D) Signup and view all the answers

How are advertisements treated in cost accounting?

As selling overheads (C) Signup and view all the answers

What type of cost system is used for the manufacture of 20 engraved doors for a golf course?

Batch cost system (A) Signup and view all the answers

What is the term for the guidance and regulation of the cost of operating an undertaking by executive action?

Cost control (C) Signup and view all the answers

What is another term for direct expenses?

Chargeable expenses (D) Signup and view all the answers

Which of the following costs is a part of both prime cost and conversion cost?

Direct material (D) Signup and view all the answers

What is the term for a statement showing the break-up of costs?

Cost-sheet (A) Signup and view all the answers

What is the term for the total of works cost and administration expenses?

Total cost (B) Signup and view all the answers

What type of cost is interest on own capital?

Notional cost (A) Signup and view all the answers

What is the term for the total of all cost items that can be directly charged to product units?

Prime cost (B) Signup and view all the answers

What is the primary objective of cost accounting?

To make better financial decisions (D) Signup and view all the answers

What are the costs that can be directly attributed to a particular product or service?

Chargeable expenses (A) Signup and view all the answers

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 (A) Signup and view all the answers

What is the total direct cost of production, including raw materials and labor?

Prime cost (B) Signup and view all the answers

What document shows the various components of total cost for a product and shows previous data for comparison?

Cost sheet (D) Signup and view all the answers

What is a sunk cost?

A cost that has already been incurred and cannot be changed (D) Signup and view all the answers

What type of costing is used in the pharmaceutical industry?

Process costing (C) Signup and view all the answers

What is the purpose of computing imputed costs?

To make decisions (A) Signup and view all the answers

What is the primary purpose of cost accounting?

To provide information to management for decision-making (A) Signup and view all the answers

What is the result of adding administrative overhead to works cost?

Cost of production (B) Signup and view all the answers

What is the main objective of cost reduction?

To lower the unit cost of a product (B) Signup and view all the answers

What is an opportunity cost?

The economic value of the benefit sacrificed under one alternative (C) Signup and view all the answers

What is the purpose of relevant cost?

To eliminate unnecessary data that could complicate the decision-making process (C) Signup and view all the answers

What is an example of an imputed cost?

Interest on funds generated internally (C) Signup and view all the answers

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 (D) Signup and view all the answers

What is administrative overhead mostly related to?

Office expenses of the business (B) Signup and view all the answers

What is added to the cost of production to get the cost of sales?

Selling and distribution overhead (A) Signup and view all the answers