Total Marks: 60 Time: 120 minutes

Student’s Particulars:
Name:_ _______________________________________________

ID No:_ __________________ Signature:___ ____

1. An inventory, which consists of partially worked goods is called direct materials

inventory work in process inventory finished goods inventory  indirect material
inventory
2. Inventory of the final goods that are not yet sold is calleddirect materials inventory work in
process inventory finished goods inventory  indirect material inventory

3. An inventory which consists of stock waiting to be used In the process of manufacturing is

known as direct materials inventory work in process inventory finished goods inventory 
indirect material inventory

4. In cost accounting, the types of inventory do not includedirect materials inventory work in
process inventory finished goods inventory  indirect material inventory

5. A company purchases land with an office building. The building has a useful life of 20 years.
How should the land be depreciated? Depreciate over 20 years Depreciate over useful life of
the land Don’t depreciate the land None of the above

6. The main purpose of cost accounting is cost ascertainment inventory valuation planning
and control fixation of selling price all of the abovenone of the above.

7. The principles of cost accounting are recording incurring conservatism past costs all
of the abovenone of the above.

8. The techniques of cost accounting techniques are direct costing variable costing
Opportunity costing Standard costing Budgetary control all of the above.

9. A statement of all cost incurred or expected to be incurred during a given period in relation to
product/cost unit/cost center/department/operation/process/service and analyzed according
to the various elements of cost is called cost card cost sheet  cost statement all of the
abovenone of the above.

10. The purpose of cost sheet are Helps determination of unit cost or product or service Assists
in the fixation of selling price facilitates cost comparisons between two periods facilitates
cost control and cost reduction all of the abovenone of the above.

11. The resources have been or must be sacrificed to attain a particular objective is called cost
expenses loss asset all of the abovenone of the above.

12. A past cost not directly relevant in decision making is known as sunk cost opportunity cost
direct cost prime cost all of the abovenone of the above.

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13. Costs arising from prior decisions which can not in the short run be changed is called
committed cost opportunity cost direct cost prime cost all of the abovenone of the
above.

14. The part of the cost of one unit of product or service which would be avoided if that unit were
not produced or which would increase if one extra unit were produced is called marginal cost
opportunity cost direct cost prime cost all of the abovenone of the above.

15. The difference between two alternative is called sunk cost opportunity cost direct cost
differential cost all of the abovenone of the above.

16. A cost which can be influenced by its budget holder is called controllable cost opportunity
cost direct cost prime cost all of the abovenone of the above.

17. A cost which varies in proportion to measure of activity is called Engineering cost
opportunity cost direct cost prime cost all of the abovenone of the above.

18. A cost whose amount within a time period is determined by and is easily altered by a decision
taken by the appropriate budget holder is called programmed cost opportunity cost direct
cost prime cost all of the abovenone of the above.

19. Prime cost can be defined as: The total costs of manufacturing a product. The total direct
costs of manufacturing a product. The cost of the first stage of the manufacture of a
product.The total costs of operating the production department where the product is made.

20. Which of the following best describes a fixed cost? Represents a fixed proportion of total costs
Has a direct relationship with output Its average remains at the same level as output
increases Remains at the same level up to a particular level of output

21. Cost which are ascertained after they are incurred are known as standard cost historical cost
estimated cost Direct cost all of the abovenone of the above.

22. Manufacturing Overhead includes indirect material indirect labor cost indirect expenses
all of the abovenone of the above.

23. Materials that can be traced to the good or service being produced. Direct material product
cost Direct cost Direct labor all of the abovenone of the above.

24. A cost assignment method that satisfies a well-specified managerial objective. Direct material
product cost Direct cost Direct labor all of the above none of the above.

25. Costs those are easily traceable to a cost object. Direct material product cost Direct cost
Direct labor all of the abovenone of the above.

26. Labor that is traceable to the goods or services being produced. Direct material product cost
Direct cost Direct labor all of the abovenone of the above.

27. Direct wages plus manufacturing overhead cost. Direct material product cost direct cost
direct labor Conversion cost none of the above.

28. Direct materials cost plus direct labor cost plus direct expenses Direct material prime cost
Direct cost Direct labor all of the above none of the above.

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29. All production costs other than prime cost factory Overhead product cost Direct cost
Direct labor all of the abovenone of the above.

30. The cost of direct materials, direct labor, and overhead attached to the units sold. Cost of goods
sold product cost Direct cost Direct labor all of the abovenone of the above.

31. The cost of goods completed during the current period. Cost of goods manufactured product
cost Direct cost Direct labor all of the above none of the above.

32. The benefit sacrificed or foregone when one alternative is chosen instead of another.
Opportunity cost product cost Direct cost Direct labor all of the abovenone of the
above.

33. An expired cost. Expense  cost loss Direct labor all of the abovenone of the above.

34. Costs that cannot be traced to a cost object. Indirect cost product cost Direct cost
Direct labor all of the above none of the above.

35. Use of drivers to assign costs to cost objects. Direct tracing driver tracing Direct cost
Direct labor all of the abovenone of the above.

36. Set of activities required to design, develop, produce, market, distribute, and service a product.
Internal value chain driver tracing Direct cost Direct labor all of the abovenone of the
above.

37. A contemporary control system that focuses on the management of activities. Activity based
costing activity based management Direct cost Direct labor all of the abovenone of the
above.

38. All partially completed units in production. Work in process raw material finished goods
Direct labor all of the abovenone of the above.

39. Costs which cannot be reasonably assigned to marketing or production categories are Expense
 administrative cost loss Direct labor all of the abovenone of the above.

40. Cash or cash equivalent value sacrificed for goods and services expected to produce current or
future benefits is called Expense  cost loss Direct labor all of the abovenone of the
above.

41. Any item such as products, projects, or activities for which costs are measured and assigned is
a(n) cost object  cost pool  cost driver all of the abovenone of the above.

42. The process management is involved which of the following?  Planning Controlling
Decision making Directing operational activities all of the above.

43. The costs associated with selling and general administration production cost non-
production cost loss Direct labor all of the above none of the above.

44. The costs necessary to market and distribute a product or service. Marketing cost traceability
Direct labor all of the above none of the above.

45. The costs associated with the manufacture of goods or the provision of services Marketing cost
production cost Direct labor all of the above none of the above.

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46. Which of the following is an example of a period cost? Direct materials cost direct wages
monthly office rent  indirect wages all of the above.

47. A retailer or wholesaler has one inventory, a manufacturer has one inventory two
inventories three inventories four inventories five inventories  none of the above.

48. Cost behavior patterns include: variable costs;  fixed costs; step costs;  mixed costs.
all of the above.

49. Break-even is the point where: revenue equals variable manufacturing costs;  revenue equals
variable manufacturing and variable selling and administrative costs;  revenue equals variable
and fixed manufacturing costs;  revenue equals all variable and fixed costs none of the above

50. The contribution margin ratio equals:  revenue minus variable costs;  variable costs divided
by revenue;  contribution margin divided by revenue;  variable costs divided by contribution
margin none of the above

51. Which of the following is the combination that comprises manufacturing costs? Direct labor
and direct materials;  Direct labor and factory overhead  Factory overhead and indirect labor
 Factory overhead and indirect material  Direct materials and factory overhead  Indirect
materials and all of the abovenone of the above.

52. Cost of goods sold consists of the following costs:  direct materials only;  direct materials and
direct labor only;  direct materials, direct labor, and variable overhead;  direct materials,
direct labor, variable overhead, and fixed overhead  all of the above none of the above.

53. The resource sacrificed or forgone to achieve a specific objective cost  expense loss
asset  all of the above  none of the above
54. An expired cost having the benefits is called cost  expense loss asset  all of the above
 none of the above
55. An unexpired cost is called cost  expense loss asset  all of the above  none of the
above
56. Costs are those expected future cost that differs among alternative course of action Relevant
cost  irrelevant cost  sunk cost period cost  all of the above  none of the above
57. A cost is a cost that has already been incurred and that cannot be changed by any decision made
now or in future  Relevant cost  irrelevant cost  sunk cost period cost  all of the
above  none of the above
58. Cost as the value of benefits sacrificed in favor of an alternative course of action Relevant cost
 irrelevant cost  sunk cost period cost  all of the above  none of the above
59. A cost that varies in total in direct proportion to changes in the level of activity variable cost
 semi variable cost  fixed cost mixed cost  all of the above  none of the above
60. A cost that remains constant in fixed regardless of change in the level of activity within the
relevant range  variable cost  semi variable cost  fixed cost mixed cost  all of the
above  none of the above

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