Unit 7: Basic Aspects of Cost Accounting - Practice Quiz

1 Cost accounting is primarily concerned with the process of:

2 The term 'cost' refers to:

3 Which of the following is an example of a direct material cost?

4 Prime cost is the total of:

5 Costs that remain constant in total regardless of the level of output are called:

6 Which of the following is a variable cost?

7 Indirect costs are also commonly known as:

8 Works cost (factory cost) is calculated as:

9 A cost sheet is a statement that shows:

10 Cost of production is arrived at by adding which item to the works cost?

11 Total cost (cost of sales) is obtained by adding to the cost of production the:

12 If total cost is and profit is , the sales value will be:

13 If prime cost is and factory overheads are , the works cost is:

14 An estimated cost sheet is prepared:

15 Wages paid to workers directly engaged in production are classified as:

16 Which of the following is an example of selling and distribution overhead?

17 A cost that has already been incurred and cannot be recovered is known as a:

18 The benefit foregone by choosing one alternative over another is called:

19 In a cost sheet, cost per unit is generally calculated by:

20 Semi-variable costs are those which:

21 A firm reports the following: Direct Materials , Direct Wages , Direct Expenses . What is the Prime Cost?

22 Prime Cost is and Factory Overheads are . What is the Works (Factory) Cost, assuming no opening or closing work-in-progress?

23 Works Cost is and Office & Administration Overheads are . Calculate the Cost of Production.

24 Cost of Production is and Selling & Distribution Overheads are . What is the Cost of Sales (Total Cost)?

25 Cost of Sales is and the firm earns a profit of on cost. What is the Sales value?

26 Given Opening Stock of Raw Material , Purchases , Closing Stock of Raw Material . What is the Cost of Materials Consumed?

27 Sales are and profit is on sales. What is the Cost of Sales?

28 In a cost sheet, the value of scrap realised from the sale of defective materials in the factory should be:

29 Cost of Production of goods manufactured is . Opening finished goods stock is and closing finished goods stock is . What is the Cost of Production of Goods Sold?

30 In preparing an estimated cost sheet for a future period, which item is generally excluded from the estimate?

31 Which of the following is the best example of a sunk cost?

32 A factory's total cost is at units and at units. Using the high-low method, the variable cost per unit is:

33 The salary of a factory supervisor who oversees several products is best classified as:

34 Which statement best describes an opportunity cost?

35 A cost that remains constant in total but decreases per unit as output increases is a:

36 Direct materials, direct labour and direct expenses together are also called:

37 Direct labour cost is and factory overhead is . What is the conversion cost?

38 In cost accounting, the term cost most accurately refers to:

39 Which of the following best distinguishes a cost centre from a cost unit?

40 Telephone charges consisting of a fixed monthly rental plus a charge per call are an example of a:

41 A firm has prime cost of , factory overheads absorbed at of direct wages, and direct wages of . Opening and closing work-in-progress were and respectively. What is the factory cost (works cost)?

42 A machine that cost five years ago can be sold now for or used in a new project. For decision-making on the new project, the original cost is best described as a:

43 Cost of goods sold is . Opening finished goods stock was and closing was . Cost of production of goods produced during the period is:

44 Materials consumed , direct wages , works overhead , administration overhead , selling overhead of sales, and profit on cost of sales. If cost of production equals , what is the sales value?

45 Within the relevant range, which statement about fixed cost behaviour is correct?

46 A company produced units. Direct material , direct labour . Factory overhead is of direct labour. There was no opening WIP but closing WIP of equivalent units (fully complete for material and labour) valued at prime cost only. What is the factory cost of finished output? (Overhead applies to completed units only)

47 A cost that changes in total with output but not in direct proportion, containing both fixed and variable elements, is best classified as a:

48 Opening stock of raw material , purchases , carriage inward , closing raw material , and raw material returned to supplier . Raw material consumed is:

49 For an estimated cost sheet, actual results showed material cost of per unit. Prices are expected to rise by and efficiency improvements will cut quantity used by . The estimated material cost per unit is:

50 Which combination correctly represents conversion cost?

51 A cost sheet shows works cost and administration overhead absorbed at of works cost. Selling and distribution overhead is , and the firm sold of production (no opening finished stock). Cost of goods sold is:

52 A managerial salary paid regardless of output, arising from long-term policy decisions and not easily reduced in the short run, is a:

53 Prime cost is and it represents of works cost. Cost of production is . Administration overhead as a percentage of works cost is:

54 A firm can make a component in-house at or buy it at . Making it frees a machine that could earn contribution per unit elsewhere. The relevant cost comparison favours:

55 In an estimated cost sheet, budgeted output is units. Fixed factory overhead is and variable factory overhead is per unit. If actual output falls to units, the factory overhead per unit will be:

56 Which statement about product costs versus period costs is correct?

57 Sales are , profit is on sales, selling overhead , administration overhead , and there is no stock of finished goods. Works cost is:

58 Using the high-low method, total cost was at units and at units. The estimated fixed cost component is:

59 A firm charges factory overhead at of direct wages and office overhead at of works cost. Direct material is and direct wages . The cost of production is:

60 Scrap value recovered from normal production waste is treated in the cost sheet by: