WorksheetsCOST CONCEPTS
Total questions: 40
Worksheet time: 30mins
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
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
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
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
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.
Cost of acquiring a product includes the following, EXCEPT:
Cost of the product
Cost of transporting the products
Cost of factory rental
Cost of process to buy the product
Select three costs that categorize as administration costs
Office clerk salaries
General manager salaries
Phone and postage
Lorry driver's salary
Which of the following is NOT part of the production costs?
Direct materials
Salary of office clerks
Salary of factory supervisors
Production royalties
Which heading a "Factory Rental Cost" will be recorded in a cost statement?
Prime Costs
Manufacturing Overhead
Administration Overhead
Sales and distribution Overhead
An example of indirect material in making nasi lemak is ___
Rice
Water
Slice of cucumber
Boiled egg
A cleaner who work in a factory, may best be classified as ___
Indirect labour
Direct labour
Indirect expenses
Direct expenses
Which of the following is NOT a manufacturing overhead?
Direct materials
Factory supervisor
Indirect materials
Factory rentals
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
Direct materials + Direct labour + Direct expenses = ___?
Prime costs
Production costs
Total Costs
Manufacturing overhead costs
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
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 factory overhead.
Direct materials and direct labor only.
Direct materials, direct labor, factory overhead, and administrative overhead.
Direct labor and factory overhead.
Prime costs are made up of
Raw materials costs + direct labor costs
Factory 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.
Factory insurance is considered to be a
Manufacturing overhead costs
Prime costs
Administrative costs
Operating income
Summarize the cost of direct materials, direct labor and manufacturing overhead incurred in producing the goods.
Manufacturing costs
Manufacturing overhead
Cost of goods manufactured
Cost of goods sold
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
Direct labor + Manufacturing overhead
Conversion cost
Prime cost
Manufacturing cost
None of the answer
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
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
Which of the following is not an element of manufacturing overhead?
Sales manager's salary
Plant manager's salary
Factory repairman's salary
Product inspector's salary
Indirect labour is a :
non-manufacturing cost
raw material cost
product cost
period 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 cost accounting department supervisor
wages paid to an assembly worker
