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WorksheetsCOST CONCEPTS AND CLASSIFICATIONS 1
Total questions: 20
Worksheet time: 16mins
When classified according to traceability to cost objective, the cost of raw materials is considered a:
Discretionary cost
Direct cost
Product cost
Committed cost
Variable costs are costs that change regularly while fixed costs remain the same all the time.
True
False
Budgeted costs belong to which cost classification?
Planning and control
Decision making and other analytical purposes
Managerial influence
Time-frame perspective
If variable manufacturing costs = P100, variable non-manufacturing costs = P75, fixed manufacturing costs = P50 and fixed non-manufacturing costs = P25, how much is the total product cost under the direct costing method?
P175
P150
P125
P75
If variable manufacturing cost is P200, fixed manufacturing cost is P150, variable non-manufacturing cost is P100, and fixed non-manufacturing cost is P50, how much is the total product cost under absorption costing?
P350
P300
P250
P200
Not in the choices
The cost associated with the next unit or the next project or incremental cost associated with an additional project as opposed to the next discrete unit.
Out-of-pocket
Historical
Relevant
Marginal
Incremental
Which of the following is a variable cost in an insurance company?
Office space rental fee
Salary of the company president
Property taxes
Sales commissions
Which cost is also known as inventoriable cost?
Product cost
Period cost
Manufacturing cost
Non-manufacturing cost
Which does not belong to the group?
Opportunity cost
Relevant cost
Out-of pocket cost
Sunk cost
Value-added cost
If direct materials = P200, direct labor = P150, and manufacturing overhead = P100, how much is the total conversion cost?
P350
P300
P250
P200
Not in the choices
This is the assignment of indirect costs to cost pools.
Cost classification
Cost assignment
Cost allocation
Cost driver
Allocation bases
We have three suppliers - A, B and C. A sells the raw materials for P100 per kilo, B sells the raw materials for P120 per kilo and C sells the raw materials for P130 per kilo. If we buy from C because he is our relative:
There will be a P20 out-of-pocket cost.
There will be a P30 opportunity cost.
There will be a P30 marginal cost.
There will be a P20 relevant cost.
Not in the choices
Future costs can never be sunk costs.
True
False
These are all the costs that are expensed on the income statement when they are incurred.
Product costs
Operating expenses
Period costs
Manufacturing costs
Non-manufacturing costs
The cost of inventory classified according to financial statement
Income statement
Raw material inventory cost
Statement of financial position
Inventoriable cost
Statement of cash flows
If we need to order 1,000 units, we will have higher total ordering cost if we order 200 units every time compared to if we order 250 units every time.
True
False
It is possible for both fixed cost and variable cost to be combined in only one cost.
True
False
Products and services are generally cost pools, while manufacturing departments are considered either cost pools or cost objects.
True
False
Which of the following is not used to classify cost pools?
By source
By responsibility
By type of cost
By nature
Not in the choices
The cost raw materials is recorded as product cost when:
the raw materials are bought.
the raw materials are sold.
the raw materials are processed even if it is not yet finished.
the finished goods are available.
the finished goods are sold.
