Cost Accounting

Question 1

1Annual demand is 1,800 units, the cost of placing an order is GH₵ 25 and the holding cost is GH₵ 1 per unit per year. Find the economic order quantity.

Hard

A. 300 units B. 90,000 units C. 600 units D. 150 units

Question 2

2Prime cost is the total of

Easy

A. all overheads B. selling and distribution costs C. fixed and variable costs D. direct materials, direct labour and direct expenses

Question 3

3A worker paid by the number of units produced is on a

Easy

A. salary B. piece rate C. time rate D. bonus only

Question 4

4Job costing is suitable for

Easy

A. custom orders such as printing a wedding card B. oil refining C. cement production D. water supply

Question 5

5A semi-variable cost is

Hard

A. partly fixed and partly variable B. fully fixed C. fully variable D. never incurred

Question 6

6Under absorption costing, if production exceeds sales, profit compared with marginal costing is

Hard

A. the same B. lower C. zero D. higher

Question 7

7Stocktaking means

Easy

A. buying stock B. physically counting inventory C. selling stock D. paying suppliers

Question 8

8In process costing, normal loss is

Hard

A. charged to the income statement as abnormal B. expected loss absorbed by good output C. added to profit D. always zero

Question 9

9Sales 5,000 units at GH¢20; variable cost GH¢12/unit; fixed costs GH¢25,000. Profit is

Hard

A. GH¢15,000 B. GH¢40,000 C. GH¢75,000 D. GH¢25,000

Question 10

10A cost that has already been incurred and cannot be recovered is a

Easy

A. relevant cost B. opportunity cost C. sunk cost D. marginal cost