Unit 1 and unit 2 Costing basics

Prime cost comprises the following combination of costs: (A) direct material and direct wages. (B) direct wages and factory overhead. (C) direct materials and factory overhead. (D) direct material, direct wages and direct expense.

• direct material and direct wages

• direct wages and factory overhead

• direct materials and factory overhead

• direct material, direct wages and direct expense

The payment to factory cleaner is charged to (A) prime cost. (B) Marketing overheads. (C) production overheads. (D) administration overheads.

• prime cost

• Marketing overheads

• production overheads

• administration overheads

An example of direct expense is (A) hiring of special design of mould. (B) catalogue of prices of finished goods. (C) special raw material which is a substantial part of the prime cost. (D) overtime charges paid to direct worker to complete work before time.

• hiring of special design of mould

• catalogue of prices of finished goods

• special raw material which is a substantial part of the prime cost

• overtime charges paid to direct worker to complete work before time

When overtime is required for meeting urgent orders the customer's request, the overtime premium should be charged to the (A) direct wages. (B) respective jobs. (C) production overheads. (D) statement of comprehensive income.

• direct wages

• respective jobs

• production overheads

• statement of comprehensive income

The costs that can be identified with a tangible product are (A) indirect costs. (B) direct materials. (C) financial overheads (D) production overheads.

• indirect costs

• direct materials

• financial overheads

• production overheads

Direct wages include wages paid to all the following except for (A) janitors. (B) machine operators. (C) production workers. (D) assembly line workers.

• janitors

• machine operators

• production workers

• assembly line workers

The total of indirect material, indirect wages and indirect expense is known as (A) prime cost. (B) overheads. (C) factory cost. (D) cost of sales.

• prime cost

• overheads

• factory cost

• cost of sales

Name the cost centre for the maintenance department, which does repair for production departments and non-production departments.

• Service cost centre

• Production cost centre

• Distributiuon cost centre

• Administration cost centre