Cost and Management Accounting Quiz

Which of these is not an objective of Cost Accounting?

• Ascertainment of Cost

• Determination of Selling Price

• Cost Control and Cost reduction

• Assisting Shareholders in decision making

A profit centre is a centre

• Where the manager has the responsibility of generating and maximising profits

• Which is concerned with earning an adequate Return on Investment

• Both of the above

• Which manages cost

Responsibility Centre can be categorised into:

• Cost Centres only

• Profit Centres only

• Investment Centres only

• Cost Centres, Profit Centres and Investment Centres

Cost Unit is defined as:

• Unit of quantity of product, service or time in relation to which costs may be ascertained or expressed

• A location, person or an item of equipment or a group of these for which costs are ascertained and used for cost control.

• Centres having the responsibility of generating and maximising profits

• Centres concerned with earning an adequate return on investment

Fixed cost is a cost:

• Which changes in total in proportion to changes in output

• which is partly fixed and partly variable in relation to output

• Which do not change in total during a given period despise changes in output

• which remains same for each unit of output

Uncontrollable costs are the costs which be influenced by the action of a specified member of an undertaking.

• can not

• can

• may or may not

• must

Element/s of Cost of a product are:

• Material only

• Labour only

• Expenses only

• Material, Labour and expenses

Abnormal cost is the cost:

• Cost normally incurred at a given level of output

• Cost not normally incurred at a given level of output

• Cost which is charged to customer

• Cost which is included in the cost of the product

Conversion cost includes cost of converting..........into........

• Raw material, WIP

• Raw material, Finished goods

• WIP, Finished goods

• Finished goods, Saleable goods

Sunk costs are:

• relevant for decision making

• Not relevant for decision making

• cost to be incurred in future

• future costs