MA1 - C2 - Q1

What are the two main categories of costs discussed in Chapter 2?

• Fixed and variable costs

• Material and labor costs

• Direct and indirect costs

• Production and non-production costs

Which of the following is NOT considered a manufacturing cost?

• Direct expenses

• Direct material

• Direct labor

• Selling costs

What is the term for costs that can be directly traced to a specific cost object?

• Variable costs

• Indirect costs

• Direct costs

• Overhead costs

Which of the following is an example of an indirect cost?

• Direct labor

• Prime cost

• Direct material

• Indirect labor

What is the significance of separating production and non-production costs?

• To reduce labor costs

• To increase material costs

• To improve inventory management

• To enhance profit reporting

Which of the following is classified as a non-production cost?

• Prime costs

• Administration costs

• Direct material costs

• Direct labor costs

What does 'prime cost' refer to?

• Direct material and labor costs

• Total manufacturing costs

• Indirect costs

• Selling and distribution costs

Which of the following is an example of a cost centre?

• Finance costs

• Selling expenses

• Production department

• Direct material

What are 'cost objects'?

• Departments that manage costs

• Categories of production costs

• Types of expenses

• Items that incur costs

Which of the following is NOT a type of non-production cost?

• Selling and distribution costs

• Finance costs

• Administration costs

• Direct labor costs