Costing Techniques

Cost is typically the expense incurred for making a product or service that is sold by a _______.

• company.

• individual.

• government.

• non-profit organization.

A Direct cost is:

• a cost that can be directly traced to a specific cost object.

• a cost that cannot be directly traced to a specific cost object.

• a cost that is always variable.

• a cost that is always fixed.

An Indirect cost is:

• A cost that can be directly traced to a specific cost object.

• A cost that cannot be directly traced to a specific cost object.

• A cost that varies with production volume.

• A cost that remains constant regardless of production volume.

What is an Inventory cost?

• The cost associated with ordering, holding, and managing inventory.

• The cost of manufacturing goods.

• The cost of shipping products to customers.

• The cost of marketing and advertising.

A variable cost is:

• a cost that does not change with the level of output

• a cost that changes with the level of output

• a fixed cost

• a one-time cost

Which of the following is considered a Liability?

• Computer Equipment

• Government funding

• Accruals

• Private Donations

Fill in the blank: _______ is a Liability.

• Bank Overdraft

• Cash in Hand

• Inventory

• Accounts Receivable

If Liabilities are 0 and Total Assets are £20,000, what is the Capital?

• £20,000

• £0

• £10,000

• £15,000