Cost Accounting

Question 1

1Cost accounting differs from financial accounting because it is mainly for

Easy

A. publishing annual reports B. internal management decisions C. tax authorities only D. shareholders only

Question 2

2Which cost is relevant for a decision?

Hard

A. an allocated fixed cost that does not change B. a committed cost already paid C. a sunk cost D. a future cost that differs between alternatives

Question 3

3A telephone bill with a fixed monthly rental plus charges per call is an example of a

Easy

A. fixed cost B. variable cost C. sunk cost D. semi-variable cost

Question 4

4Opportunity cost is

Hard

A. cash paid B. historical cost C. sunk cost D. the benefit of the next best alternative forgone

Question 5

5Direct materials GH¢5,000, direct labour GH¢3,000, factory overheads GH¢2,000. Factory cost is

Hard

A. GH¢7,000 B. GH¢8,000 C. GH¢10,000 D. GH¢5,000

Question 6

6Opportunity cost in costing refers to

Easy

A. sunk cost B. cash paid C. fixed cost D. the benefit lost from the next best alternative

Question 7

7Production cost equals prime cost plus

Easy

A. administration costs only B. factory overheads C. selling expenses D. profit

Question 8

8Total cost is GH¢7,000 at 1,000 units and GH¢9,000 at 1,500 units. Using the high-low method, the fixed cost is

Hard

A. GH¢3,000 B. GH¢7,000 C. GH¢4,000 D. GH¢1,000

Question 9

9Costing helps management to

Easy

A. control costs and set prices B. print money C. hire friends D. avoid taxes

Question 10

10Indirect costs that cannot be traced to a specific product are

Easy

A. prime costs B. overheads C. direct wages D. direct materials