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WorksheetsCOST-CONCEPT, CLASSIFICATION AND COMPONENTS COMPONENTS
Total questions: 25
Worksheet time: 13mins
The importance of cost information is to enable management to carry out this function in an organization
Planning
Controlling
Decision making
All of the above
Sacrifice of resources to obtain benefit in the current period......known as cost.
True
False
The correct cost classification is
by function - direct cost, indirect cost
by behavior - variable cost, fixed cost, mixed cost
by assignment - manufacturing cost, non-manufacturing cost
Which of the following costs would a computer manufacturer include in manufacturing overhead?
The cost of the disk drives.
The wages earned by computer assemblers.
The cost of the memory chips.
Depreciation on testing equipment.
Manufacturing costs are also known as product costs. Which of the following best describes those costs which are considered to be manufacturing costs?
Direct materials, direct labor, and manufacturing overhead.
Direct materials and direct labor only.
Direct materials, direct labor, manufacturing overhead, and administrative overhead.
Direct labor and manufacturing overhead.
Prime costs are made up of
Raw materials costs + direct labor costs
Manufacturing overheads + administrative costs
Direct labour costs + Indirect labour costs
Selling and distribution costs + administrative costs
8. Conversion costs do NOT include
direct labour
direct materials
factory utilities
property taxes on factory building
When classified according to traceability to object cost, the cost of raw materials is considered a
Discretionary cost
Product cost
Direct cost
Committed cost
Which of the following costs are classified as a period cost?
Wages paid to a factory custodian.
Wages paid to a production department supervisor.
Wages paid to a cleaner department administration and marketing
Wages paid to an assembly worker.
Depreciation on testing equipment would be included in manufacturing overhead. TRUE or FALSE?
True
False
Factory insurance is considered to be a
Manufacturing overhead costs
Prime costs
Administrative costs
Operating income
It is the cost of products being processed and not yet completed at end of period.
Finished goods
Work in process
Raw materials
Manufacturing overhead
Supplies expenses
It is the cost of products that have been completed and are waiting to be sold to customers.
Finished goods
Work in process
Cost of goods sold
Raw materials
Manufacturing cost
Depreciation office furniture is considered to be a
Administrative costs
Selling and distribution costs
Manufacturing overhead costs
Asset
It is expired costs with producing any revenue benefit.
Cost
Losses
Expenses
Income
Also known as non-manufacturing cost
Product cost
Period cost
Inventoriable cost
Manufacturing cost
What are fixed cost?
Cost that change from week to week or month to month
The amount of money in bank account
The amount of cash in purse or wallet
Cost that stay the same from week to week or month to month
It is the cost of products that have been completed and are waiting to be sold to customers.
Finished goods
Work in process
Cost of goods sold
Manufacturing cost
Which of the following items is not included in manufacturing overhead?
Factory depreciation and supplies
Costs of marketing departments
Costs of machine maintenance department
Costs of factory service departments
Direct Materials + Direct Labor
Prime Cost
Conversion Cost
Manufacturing Cost
Work in Process
Direct labor + Manufacturing overhead
Conversion cost
Prime cost
Manufacturing cost
Product cost
Which of the following best defines "cost"?
The total amount paid for goods and services
A sacrifice of resources to achieve a specific objective
An amount paid for expenses incurred during a period
The profit earned from business activities
What is the key difference between "cost" and "expenses"?
Costs are fixed, while expenses are variable
Costs are future-oriented, while expenses are recorded in the income statement
Costs are recorded only in financial accounting, while expenses are not
Costs are always capitalized, while expenses are always tax-deductible
Which of the following is NOT a component of cost?
Administrative overhead
Direct labor
Factory overhead
Which of the following is an example of an indirect cost?
Wages of assembly line workers
Raw materials used in production
Depreciation on factory equipment
Cost of direct packaging materials
