INTRODUCTION TO COST ACCOUNTING

Cost Accounting is...

• the recording of all the costs incurred in a business
• the recording of all the expenses incurred in a business
• the recording of all the direct costs incurred in a business
• the recording of all the revenue incurred in a business

The following is the objective of cost accounting except....

• Ascertainment of cost

• Planning and controlling cost

• Decision making

• Observations

What is a cost unit?

• Cost of a product or services

• Expenditure

• A quantitative units of product or service to which costs can be related

• Cost per unit

Cost unit is calculated as

• Total Expense/Quantity
• Quantity/Total Cost
• Total Cost/Quantity
• Quantity/Total Expense

What is the cost unit for electricity cost?

• Kilowatt hours

• Litres

• Tonnes

Litres were used to ascertain cost of.......

• Sugar

• Flour

• Cooking oil

• Petrol

Patient nights is the cost unit to ascertain cost of.....

• Hotel

• Hospital

• Home-stay

• Taxi

Why management of a company need to know the cost of a product?

• To make the products famous

• To determine the selling price

• To determine the GST

• To get profit

Cost is classified into:

• Cost and expense
• Expense and revenue
• Indirect expense and Overheads
• Direct cost and Indirect cost

Total Cost =

• Direct Cost + Indirect Cost
• Prime Cost + Factory Overhead
• Direct Expense + Indirect Expense
• Prime Cost + Production Cost