INTRODUCTION TO COST ACCOUNTING

The main object of cost accounting is:

• to record day-to-day transactions of the business

• to reveal managerial efficiency

• to ascertain true cost of products and services

• to determine tender price

Financial Accounting is concerned with the:

• recording of business expenses and revenues

• recording of the cost of products and services

• recording of day-to-day business transactions

• none of the above

The nature of financial accounting is:

• historical

• forward-looking

• analytical

• social

A total of all the direct costs is known as

• cost of production

• Cost of sales

• prime cost

• Works cost

Which definition best describes indirect costs?

• Indirect costs are those costs which are not controlled directly by a manager

• Indirect costs are those costs which cannot be directly associated with a product or service.

• Indirect costs are always fixed.

• Indirect costs are always manufacturing overhead costs

Prime costs are comprised of

• materials costs plus direct labour costs

• materials costs plus production overheads

• direct labour costs plus production overheads

• production overheads plus materials costs plus direct labour costs

Which of the following terms is used to denote the response of a cost to the change in business activity?

• Cost behavior

• Cost trend

• Cost response

• Cost accumulation

A cost that changes in total dollar amount with the change in the level of activity is known as:

• variable cost

• fixed cost

• semi variable cost

• step cost

Mixed cost is also known as:

• double cost

• semi variable cost

• fluctuating cost

• full cost

Which of the following costs is not a product cost?

• Depreciation on the plant installed in the factory

• The electricity cost of the office of factory foreman

• The cost of shipping finished products to customers

• The cost of fuel used in the factory