6/20/2019 Multiple-choice questions

Home Student Resources Chapter 9: The nature of costs Multiple-choice questions

Multiple-choice questions
Try the multiple choice questions below to test your knowledge of this chapter. Once you have completed the
test, click on 'Submit Answers for Grading' to get your results.

This activity contains 10 questions.

The role of management accounting does not normally include the function of

decision-making
product costing
cash management
planning and control

The role of financial management does not usually include responsibility for

treasury management
risk management
corporate finance
compliance with accounting standards

The management accounting concepts, additional to the fundamental

accounting concepts do not include the
interdependency concept
going concern concept
controllability concept
reliability concept

Total costs are comprised of

fixed costs plus semi-variable costs

variable costs plus semi-variable costs
variable costs plus fixed costs plus semi-variable costs
variable costs plus fixed costs

Prime costs are comprised of

materials costs plus direct labour costs

materials costs plus production overheads

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6/20/2019 Multiple-choice questions
direct labour costs plus production overheads
production overheads plus materials costs plus direct labour costs

Cost allocation is the charging of a

cost centre with the overhead costs resulting solely from the existence of the cost centre

product with the direct labour costs relating to the product

product with the direct labour and materials costs relating to the product

cost centre with the direct labour and materials costs relating to the cost centre

Which of the following examples of bases of cost apportionment may relate to

rent, heating and lighting?
number of employees
area
number of products
weight

Which costs are charged to a product using the method of absorption costing

materials costs plus direct labour costs

production overheads plus direct labour costs
direct labour costs
total production costs

Using the marginal costing method, contribution is equal to total sales revenue
less
variable costs
fixed costs
total costs
direct labour costs

Marginal costing may be preferred to absorption costing because it

complies with the accruals or matching concept

ensures the recovery of total costs in sales pricing
enables use of the opportunity cost approach

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6/20/2019 Multiple-choice questions

complies with International Accounting Standard (IAS) 2

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