WorksheetsINTRODUCTION TO COST ACCOUNTING
Total questions: 30
Worksheet time: 23mins
The main object of cost accounting is:
to record day-to-day transactions of the business
to reveal managerial efficiency
to ascertain true cost of products and services
to determine tender price
Financial Accounting is concerned with the:
recording of business expenses and revenues
recording of the cost of products and services
recording of day-to-day business transactions
none of the above
The nature of financial accounting is:
historical
forward-looking
analytical
social
A total of all the direct costs is known as
cost of production
Cost of sales
prime cost
Works cost
Which definition best describes indirect costs?
Indirect costs are those costs which are not controlled directly by a manager
Indirect costs are those costs which cannot be directly associated with a product or service.
Indirect costs are always fixed.
Indirect costs are always manufacturing overhead costs
Prime costs are comprised of
materials costs plus direct labour costs
materials costs plus production overheads
direct labour costs plus production overheads
production overheads plus materials costs plus direct labour costs
Which of the following terms is used to denote the response of a cost to the change in business activity?
Cost behavior
Cost trend
Cost response
Cost accumulation
A cost that changes in total dollar amount with the change in the level of activity is known as:
variable cost
fixed cost
semi variable cost
step cost
Mixed cost is also known as:
double cost
semi variable cost
fluctuating cost
full cost
Which of the following costs is not a product cost?
Depreciation on the plant installed in the factory
The electricity cost of the office of factory foreman
The cost of shipping finished products to customers
The cost of fuel used in the factory
Product cost = ?
Manufacturing overhead cost + Direct labor cost
Direct materials cost + Direct labor cost
Direct materials cost + Manufacturing overhead cost
Direct materials cost + Direct labor cost + Manufacturing overhead cost
A cost that remains constant in total but varies on a per-unit basis with changes in activity is called a
variable cost
fixed cost
period cost
product cost
Variable costs are conventionally deemed to be
constant per unit of output
outside the control of management
unaffected by inflation
constant in total when production volume changes
Which of the following is a variable cost in an insurance company?
Office space rental fee
Property taxes
Salary of the company president
Sales commissions
The term “Cost” refers to:
An asset that has given benefit and is now expired
The price of product sold or services rendered
The value of the sacrifice made to acquire goods or services.
An asset that has not given benefit and is now expired.
Which of the following is the best definition of a profit centre?
A profit centre is a unit of the organisation that is operated by the management accounting department
A profit centre is a unit of the organisation in respect of which a manager is responsible for profits under his or her control
A profit centre is a unit of the organisation in respect of which a manager is responsible for costs under his or her control.
A profit centre is a unit of the organisation that is required to make a profit.
Describe the cost unit applicable to the Bicycle industry:
per part of bicycle
per bicycle
per tonne
per day
Overhead refers to:
Direct or Prime Cost
All Indirect costs
only Factory indirect costs
Only indirect expenses
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
______________ provides information for income determination
financial accounting
management accounting
cost accounting
none of the above
Salary paid to general manager is an item of ______________ expenses.
fixed
variable
semi variable
estimated
Warehousing cost is an item of
administrative overhead
distribution overhead
material cost
work overhead
Room/day is the cost unit used in ______________
hotels
hospitals
schools
none of the above
Fancy packing is an example of ______________ expenses.
selling
distribution
administrative
factory
______________ is the smallest segment of activity or area or responsibility for which costs are accumulated.
cost object
cost center
cost driver
non of these
In electricity supply company uses ______________ as cost unit.
Kilo watt hour
per household
voltage
none of above
A company has to pay RM10,000 per unit royalty to the designer of a product which it manufactures and sells. The royalty charge would be classified as a
Direct expense
Production overhead
Administrative overhead
Selling overhead
Which heading a "Factory Rental Cost" will be recorded in a cost statement?
Prime Costs
Manufacturing Overhead
Administration Overhead
Sales and distribution Overhead
Which of the following is fixed costs?
Cost of direct materials consumed in production
Salary of production operators paid in unitary basis
Depreciation on factory machinery
Production royalties incurred in production
Which of the following is NOT a manufacturing overhead?
Direct materials
Factory supervisor
Indirect materials
Factory rentals
