ACOF014 - REVISION QUESTION WEEK 2

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

• Cost of goods sold

• Raw materials inventory

• Sales commission

• Utility expenses

Which cost is treated as an expense when it is incurred?

• Product cost

• Period cost

• Prime cost

• Direct material cost

What is included in prime costs?

• Direct materials, direct labor, direct expenses

• Indirect materials and labor

• Selling and distribution costs

• Administrative expenses

Which of the following is an example of process costing?

• Custom-made furniture manufacturing

• Vehicle repair shop

• Electronic assembly line

• Tailor-made suits

What kind of cost remains constant regardless of production volume?

• Variable cost

• Fixed cost

• Semi-variable cost

• Marginal cost

Which of the following is considered a sunk cost?

• Rent for a new factory

• Depreciation of an old machine

• Future advertising expense

• Raw material costs

Which of the following is a relevant cost in decision-making?

• Sunk cost

• Fixed overhead

• Opportunity cost

• Depreciation

Which is an example of a controllable cost?

• Factory rent

• Sales manager’s commission

• Property tax

• Depreciation expense

What best describes opportunity cost?

• Cost of hiring new employees

• Cost of choosing one alternative over another

• Historical cost of an asset

• Additional expense incurred in production

In responsibility accounting, which center is accountable for both revenues and expenses?

• Cost center

• Profit center

• Investment center

• Service center