Cost : Concept , Classification and Component

Multiple Choice

What are the main components of cost classification?

• Materials

• Labor

• Overhead

• All of the above

Multiple Choice

What is the difference between costs and expenses?

• Costs are always fixed

• Expenses are always variable

• Costs are incurred to generate revenue

• Expenses are not related to revenue generation

Multiple Choice

What are the four functions that management can carry out with the help of cost information?

• Planning

• Controlling

• Decision making

• All of the above

Multiple Choice

What is the main difference between costs and expenses as described in the image?

• Costs are future benefits, while expenses are current benefits.

• Costs are always higher than expenses.

• Expenses are investments, while costs are not.

• Costs and expenses are the same.

Multiple Choice

What are the three classifications of costs mentioned in the image?

• Function

• Behavior

• Other

• Classification

Multiple Choice

What are the components of Manufacturing Cost and Non-Manufacturing Cost as shown in the image?

• Direct Material, Direct Labor Cost, Selling Expenses, Administration Expenses

• Direct Material, Direct Labor Cost, Prime Cost, Selling Expenses

• Manufacturing Overhead Cost, Conversion Cost, Selling Expenses, Administration Expenses

• Direct Material, Prime Cost, Selling Expenses, Administration Expenses

Multiple Choice

What are the three main components of manufacturing costs?

• Direct Material

• Direct Labor

• Manufacturing Overhead

• Marketing Costs

Multiple Choice

What costs are included in Conversion Cost?

• Direct materials and direct labour

• Direct labour and manufacturing overhead

• Selling expenses and administrative costs

• Prime costs

Multiple Choice

What are the main components of Prime Cost?

• Direct materials and direct labour

• Manufacturing overhead

• Selling expenses

• Administrative costs

Multiple Choice

Abigail is managing a project and needs to identify the direct costs. Direct costs are . . .

• materials that are used for marketing purposes

• materials that are used for office supplies

• materials that are used to make a product indirectly

• easily traceable to the cost object

Multiple Choice

What are the two main categories of non-manufacturing costs?

• Selling Expenses

• Administrative Expenses

• Production Costs

• Direct Costs

Multiple Choice

The best way to earn a consistent rate on net sales is to

• increase sales

• increase net income

• decrease sales

• control costs

Multiple Choice

What is included in total selling and administration cost?

• Research and development expenses
• Employee salaries
• Sales commissions

• Cost of raw materials

Multiple Choice

General/Administration costs include:

• Direct materials

• Sales commissions

• Office supplies

• Shipping costs

Multiple Choice

What are the three types of costs described in the image?

• Variable Cost

• Fixed Cost

• Mixed Cost

• All of the above

Multiple Choice

What are the two types of costs represented in the image?

• Direct Cost

• Indirect Cost

• Fixed Cost

• Variable Cost

Multiple Choice

What are the two examples of direct costs mentioned in the image?

• Direct materials

• Direct labor

• Indirect costs

• Fixed costs

Multiple Choice

What are examples of indirect costs mentioned in the image?

• Indirect labor

• Advertising expenses

• Director’s salary

• All of the above

Multiple Choice

What are the main components of manufacturing costs as shown in the diagram?

• Direct Materials

• Direct Labor

• Manufacturing Overhead

• All of the above

Multiple Choice

What are the main differences between product costs and period costs?

• Product costs are reported in the Statement of Profit or Loss

• Period costs are involved in the process of making products

• Product costs include selling expenses

• Period costs are reported in the Statement of Cost of Goods Manufactured

Poll

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