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

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 cost

The term “Cost” refers to:

• An asset that has given benefit and is now expired

• The price of product sold or services rendered

• The value of the sacrifice made to acquire goods or services

• An asset that has not given benefit and is now expired.

Which of the following is NOT a manufacturing overhead?

• Direct materials

• Factory supervisor

• Indirect materials

• Factory rentals

Cost is classified into:

• Cost and expense

• Expense and revenue

• Indirect expense and Overheads

• Direct cost and Indirect cost

Cost can be classify according to:

(Choose 3 answer)

• Nature - Material, Labor Skills

• Function - Manufacturing & Non-Manufacturing Cost

• Behaviour - Fixed, Variable, Mixed & Step Cost

• Traceability - Direct Cost & Indirect Cost

Identify the correct cost classification according to Function:

• Interest on loan - Finance Cost

• Maintenance Fees for office photocopy machines - Admin Cost

• Cost of painting slogans on delivery van - Production Overhead

• Salesman Salaries - R&D Cost

Identify the correct pair for COST UNIT

• Paint - Cost per litres

• Fabric - Cost per metres

• Hotel - Cost per room per night

• Airlines - Cost per kilo

Which of the following are non-production costs?

• Depreciation of machinery

• Audit Fees

• Factory Utilities

• Wages of machine operators

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

• Ascertainment of cost

• Planning and controlling cost

• Decision making

• Observations