Basic Terms

1.Cost objects are ... (Multiple Choice)*

 ... causing costs when produced or being performed as a service.
 ... used in a cost collection system to accumulate costs for various purposes.
 ... any activities (products or services) for which a separate cost measurement is needed.

2.Inventory in a retail company normally comprises of ... (Multiple Choice)*

 ... raw material
 ... unfinished goods
 ... work in progress
 ... finished goods
 ... merchandise

3.Costs can be characterized by ... (Multiple Choice)*

 ... direct and indirect costs.
 ... prime costs and overheads.
 ... relevant and irrelevant costs.

4.Overheads include ... (Multiple Choice)*

 ... manufacturing overheads.
 ... administrative overheads.
 ... selling/marketing overheads.
 ... research and development overheads.
 ... product overheads.

5.Select the answers you agree with. (Multiple Choice)*

 Cost allocation is the process of assigning direct costs to the cost objects.
 Cost allocation is the process of assigning indirect costs to the cost objects.
 Cost allocation is the process of assigning costs to the cost objects.

6.Which costs should be included in a "Costing Sheet"? (Multiple Choice)*

 Direct materials
 Direct labour
 Manufacturing overheads
 Marketing overheads
 Administrative overheads

7.Select the answers you agree with. (Multiple Choice)*

 Manufacturing costs are period costs (expenses).
 Non-manufacturing costs are period costs (expenses).
 Costs of goods sold are period costs (expenses).
 Research costs are period costs.

8.Select the correct terms used in Cost Accounting. (Multiple Choice)*

 Proportionate costs
 Variable costs
 Constant costs
 Fixed costs
 Mixed costs
 Semi-fixed costs
 Semi-variable costs
9.Which statements do you agree with? (Multiple Choice)*
 Avoidable costs are relevant costs.
 Unavoidable costs are the relevant costs to look at.
 Sunk costs are relevant for decision-making.
 Opportunity costs are relevant for decision-making.
 Marginal costs are the same as incremental costs.
 Marginal revenue is the monetary amount of selling one additional unit.
 Incremental revenue is the monetary amount of selling a group of additional units.

10.Which statements are correct? (Multiple Choice)*

 A cost and management accounting information system collects cost and revenue data
for various purposes.
 The resulting database is also used for coding cost objects, cost category, and cost
behaviour.