3.

1 Important Exercise on Introduction to basic concepts SAUD TARIQ

CAF 3 CMA (For Query directly WhatsApp ST: 03212112963)
ST Academy
Important Exercise on Introduction to basic concepts

1. A house building company following costs. Classify them into direct materials, direct labour or overheads.
a. Water pipes
b. Dust masks
c. Roof tiles
d. Brick layers
e. Tools used on the site
f. Bricks
g. Equipment hired to use on site
h. Wood
i. Cement
j. Electricians
k. Safety helmets
l. Plumber wages
m. Plasters wages
n. Electric cables
o. Light fittings

2. A dress-making shop has following costs. Classify them into direct materials, direct labour or overheads.
a. Cotton
b. Zips
c. Designers salary
d. Sewing machines
e. Pressing room staff
f. Thread
g. Ribbons
h. Needles
i. Buttons
j. Dye colours
k. Canteen staff salary
l. Sweepers salary

3. Demonstrate whether following costs should be classified as direct or indirect labours.

a. Accountant in a manufacturing company
b. Assembly line worker in a manufacturing company
c. Welder in a manufacturing company
d. Quality regulator in a manufacturing company
e. Machinist in a manufacturing company
f. Canteen staff in a manufacturing company
g. Security staff in a manufacturing company
h. Accountant in an accountancy firm
i. Tax assistant in an accountancy firm
j. Administrative assistant in an accountancy firm
k. Sweeper in an accountancy firm
l. Canteen staff in an accountancy firm

Lectures: sta.saudtariq.com/Course/Detail/4885 1 Sir Saud Tariq (CAF 3, CAF 6, CFAP 3, CFAP 4, MSA 2)
 3.1 Important Exercise on Introduction to basic concepts SAUD TARIQ
CAF 3 CMA (For Query directly WhatsApp ST: 03212112963)
ST Academy
4. Demonstrate whether following costs used in a furniture manufacturing company should be classified as
direct or indirect material.

a. wood
b. oil
c. glue
d. stationery
e. safety equipments
f. paint
g. nails
h. fabric
i. timber
j. metal
k. computers
l. plastic

5. Identify whether following are variable or fixed costs.

a. Depreciation of an equipment
b. Cost of shipping finished goods to customers
c. Wood used in manufacturing furniture
d. Sales manager’s salary
e. Electricity used in manufacturing furniture
f. Packing supplies for shipping products
g. Sand used in manufacturing concrete
h. Supervisor’s salary
i. Advertising costs
j. Insurance
k. ProperttTax expense
l. Commission on sales
m. Rent expense
n. Raw material
o. Interest expense

Lectures: sta.saudtariq.com/Course/Detail/4885 2 Sir Saud Tariq (CAF 3, CAF 6, CFAP 3, CFAP 4, MSA 2)
 3.1 Important Exercise on Introduction to basic concepts SAUD TARIQ
CAF 3 CMA (For Query directly WhatsApp ST: 03212112963)
ST Academy
ANSWERS:

Question 1: (Cost Classification between Material, Labour and Overheads)

a. material b. overhead c. material d. overhead e. overhead

f. material g. overhead h. material i. overhead j. labour
k. overhead l. labour m. overhead n. Oberheads o. material

Question 2: (Cost Classification between Material, Labour and Overheads)

a. material b. material c. labour d. overhead
e. overhead f. overhead g. material h. overhead
i. material j. material k. overhead l. overhead

Question 3: (Cost Classification between Direct Cost and Indirect Cost)

a. Indirect b. direct c. direct d. indirect
e. direct f. indirect g. indirect h. direct
i. direct j. indirect k. indirect l. indirect

Question 4: (Cost Classification between Direct Cost and Indirect Cost)

a. direct b. indirect c. indirect d. indirect
e. indirect f. direct g. indirect h. direct
i. direct j. direct k. indirect l. direct

Question 5: (Cost Classification between Variable Cost and Fixed Cost)

a. Fixed b. variable c. variable d. fixed e. variable
f. variable g. variable h. fixed i. fixed j. fixed
k. fixed l. variable m. fixed n. variable o. fixed

Lectures: sta.saudtariq.com/Course/Detail/4885 3 Sir Saud Tariq (CAF 3, CAF 6, CFAP 3, CFAP 4, MSA 2)