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- 1. Multiple Choice
Depreciation on office furniture is considered to be a -
Administrative costs
Selling and distribution costs
Overhead costs
Negative asset
- 2. Multiple Choice
Factory insurance is considered to be a -
Overhead costs
Prime costs
Administrative costs
Operating income
- 3. Multiple Choice
Prime costs are made up of -
Raw materials costs + direct labour costs
Direct labour costs + Indirect labour costs
Factory overheads + administrative costs
Selling and distribution costs + administrative costs
- 4. Multiple Choice
The formula for calculating cost of goods sold is -
Finished goods at beginning of the year + cost of finished goods produced - finished goods at end of the year
Total manufacturing costs + work-in-progress at beginning of the year - work-in-progress at end of the year
Finished goods at beginning of the year + cost of sales - finished goods at end of the year
Finished goods at beginning of the year - cost of finished goods produced - finished goods at end of the year
- 5. Multiple Choice
Variable costs -
Increase in total with an increase in production
Increase per unit with an increase in production
Include prime costs and all factory overheads
Include all manufacturing, administrative and selling and distribution costs
- 6. Multiple Choice
Fixed costs -
Increase in total with an increase in production
Decrease per unit with an increase in production
Increase per unit with an increase in production
Decrease in total with a decrease in production
- 7. Multiple Choice
When classified according to traceability to cost objective, the cost of raw materials is considered a:
Discretionary cost
Direct cost
Product cost
Committed cost
- 8. Multiple Choice
These are all the costs that are expensed on the income statement when they are incurred.
Product costs
Operating expenses
Period costs
Manufacturing costs
- 9. Multiple Choice
Which of the following are manufacturing costs?
Overhead and marketing costs
Direct raw material costs and direct labor costs
Administrative and direct labor costs
Marketing and administrative costs
- 10. Multiple Choice
Which of the following statements about the direct/indirect cost classification is not true?
Indirect costs are always traced
The direct/indirect classification depends on the choice of cost object
Indirect costs are always allocated
The design of operations affects the direct/indirect classification
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