Cost Classifications – Page 2

FA – May 2014 – L1 – SA – Q15 – Cost Classification

This question tests knowledge of classifying costs in a manufacturing context.

Question

For your organisation which is engaged in the production of industrial blocks, bricks and construction, where would you classify the remuneration of a forklift truck operator and the cost of steel girders?

Answer

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Tags: Direct Costs, Indirect Costs, Manufacturing
Level: Level 1

Topic: Cost Classifications
Series: MAY 2014

MI – May 2018 – L1 – SA – Q9 – Cost Classifications

Classification of period costs.

Question

Which of the following may NOT be classified as a period cost?
A. Depreciation
B. Consumables
C. Vehicle Insurance
D. Rent
E. Administrative Salaries

Answer

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Tags: Cost Accounting, Period Costs
Level: Level 1

Topic: Cost Classifications
Series: MAY 2018

MI – May 2018 – L1 – SA – Q6 – Cost Classifications

Understanding conversion costs.

Question

Which of the following is NOT true of conversion costs?
A. All non-production costs apportioned to product units
B. The combination of direct labour costs and manufacturing overheads
C. Production costs necessary to convert raw materials into products
D. Production costs other than the cost of materials
E. Production costs incurred from the moment materials are introduced into production up to the saleable stage

Answer

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Tags: Conversion Costs, Production Costs

Topic: Cost Classifications
Series: MAY 2018

MI – May 2018 – L1 – SA – Q5 – Cost Classifications

Definition of stepped costs.

Question

Which of the following statements correctly defines stepped costs?
A. Costs which occur at certain times or seasons during the year
B. Costs which increase with each succeeding month
C. Costs which are semi-fixed or semi-variable
D. Costs which remain fixed over a given range of activity but jump to a higher level once the activity increases beyond the range
E. Costs which are incurred at various levels of a company’s hierarchy

Answer

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Tags: Fixed Costs, Stepped Costs
Level: Level 1

Topic: Cost Classifications
Series: MAY 2018

MI – May 2018 – L1 – SA – Q4 – Cost Classifications

Identifying the components of mixed costs.

Question

What are the components of mixed costs?
A. Fixed costs and variable costs
B. Relevant costs and irrelevant costs
C. Current costs and sunk costs
D. Direct costs and indirect costs
E. Controllable costs and uncontrollable costs

Answer

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Tags: Cost behavior, Mixed Costs
Level: Level 1

Topic: Cost Classifications
Series: MAY 2018

MI – May 2018 – L1 – SA – Q3 – Cost Classifications

Examining the relationship between direct and variable costs.

Question

Which of the following statements is NOT correct in the relationship between direct and variable costs?
A. Direct costs and variable costs are one and the same
B. Direct costs can be directly traced to a product while variable costs vary with the level of production output
C. Direct costs are traceable to cost objects, e.g. goods or services, departments or projects while all variable costs are not necessarily traceable
D. Direct costs may include fixed and variable costs
E. Both direct costs and variable costs are traceable to production

Answer

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Tags: Direct Costs, Variable Costs
Level: Level 1

Topic: Cost Classifications
Series: MAY 2018

MI – May 2018 – L1 – SA – Q2 – Cost Classifications

Definition of cost behavior.

Question

Which of the following describes cost behavior?
A. The effect of cost on company performance
B. The total cost of running a business
C. The movement of material costs during inflation
D. How total costs react to changes in output
E. The ratio of costs to turnover

Answer

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Tags: Cost behavior, Cost Management
Level: Level 1

Topic: Cost Classifications
Series: MAY 2018

MI – Nov 2021 – L1 – SA – Q1 – Cost Classifications

Identify the purpose that is not part of cost codes.

Question

Which of the following is NOT part of the main purposes of cost codes?

A. Reduces clerical work
B. Facilitates electronic data processing
C. Facilitates a good costing system
D. Facilitates logical and systematic arrangement of costing records
E. Facilitates control

Answer

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Tags: Classification, Cost Control, Costing, Systematic Arrangement
Level: Level 1

Topic: Cost Classifications
Series: NOV 2021

MI – May 2022 – L1 – SA – Q8 – Cost Classifications

Identifying a classification not related to fixed costs.

Question

Which of the following is NOT a category in which fixed cost can be sub-divided?

A. Time period classification
B. Volume classification
C. Unit classification
D. Unavoidable classification
E. Policy classification

Answer

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Tags: Cost Classification, Fixed Costs
Level: Level 1

Topic: Cost Classifications
Series: MAY 2022

MI – Nov 2022 – L1 – SA – Q7 – Cost Classifications

Definition of fixed costs in relation to output

Question

Fixed cost is a cost:
A. Which changes in total in proportion to changes in output
B. Which is partly fixed and partly variable in relation to output
C. Which increases per unit as output increases
D. Which remains the same for each unit of output
E. Which remains constant in total as output changes within the relevant range

Answer

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Tags: Costing, Fixed Cost, Overheads
Level: Level 1

Topic: Cost Classifications
Series: NOV 2022

MI – Nov 2022 – L1 – SA – Q2 – Cost Classifications

Identification of direct material as a cost type

Question

Direct material is an example of:
A. Fixed cost
B. Variable cost
C. Semi-variable cost
D. Semi-fixed cost
E. Overheads

Answer

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Tags: Direct Cost, Fixed Cost, Variable Cost
Level: Level 1

Topic: Cost Classifications
Series: NOV 2022

MI – May 2021 – L1 – SB – Q3b – Cost Classifications

List factors influencing the choice of methods for pricing materials issued to production.

Question

List SIX factors to be considered in choosing methods of pricing material issued to production.

Answer

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Tags: Costing, Inventory, Material Pricing
Level: Level 1

Topic: Cost Classifications
Series: MAY 2021

MI – May 2021 – L1 – SA – Q1 – Cost Classifications

Identify the difference between prime cost and production cost.

Question

Which of the following best describes Prime Cost and Production Cost?

A. Prime cost is the same as production cost
B. Prime cost plus manufacturing indirect cost is production cost
C. Prime cost minus manufacturing overhead is production cost
D. Prime cost plus all direct costs is production cost
E. Prime cost plus fixed costs is production cost

Answer

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Tags: Cost Classifications, Prime Cost, Production Cost
Level: Level 1

Topic: Cost Classifications
Series: MAY 2021

MI – Nov 2023 – L1 – SA – Q2 – Cost Classifications

Identifying the document that includes detailed cost center and cost unit information.

Question

A document which includes the detailed cost centre and cost unit is known as:
A. Tender
B. Cost sheet
C. Work order
D. Bill of quantities
E. Goods requisition note

Answer

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Tags: Cost Center, Cost Components, Cost Sheet, Cost Unit
Level: Level 1

Topic: Cost Classifications
Series: NOV 2023

MI – May 2023 – L1 – SA – Q5 – Cost Classifications

This question asks for the term used to describe assigning indirect costs to cost centres.

Question

Assigning indirect costs to cost centres is known as:
A. Cost allocation
B. Sales tracing
C. Sales allocation
D. Cost tracing
E. Allotment

Answer

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Tags: Cost Allocation, Cost Centres, Indirect Costs
Level: Level 1

Topic: Cost Classifications
Series: MAY 2023

MI – May 2023 – L1 – SA – Q4 – Cost Classifications

This question asks for the method of allocating costs based on individual usage of a common cost.

Question

The method of allocation of costs to individual users based on their usage of a common cost is known as:
A. Bundled products allocation method
B. Variable cost allocation method
C. Stand-alone cost allocation method
D. Grouped allocation method
E. Incremental cost allocation method

Answer

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Tags: Common Costs, Cost Allocation, Stand-Alone Method
Level: Level 1

Topic: Cost Classifications
Series: MAY 2023

MI – May 2023 – L1 – SA – Q2 – Cost Classifications

This question asks for the identification of another name for mixed cost.

Question

Which of the following is another name for mixed cost?
A. Double cost
B. Semi-Variable cost
C. Fluctuating cost
D. High and Low cost
E. Triple cost

Answer

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Tags: Fluctuating Costs, Mixed Costs, Semi-Variable Costs
Level: Level 1

Topic: Cost Classifications
Series: MAY 2023

MI – Nov 2019 – L1 – SA – Q1 – Cost Classifications

This question asks to identify the term for the process of grouping costs according to their common characteristics.

Question

The process of grouping costs according to their common characteristics is known as:
A. Cost divisions
B. Cost Allocation
C. Cost Accumulation
D. Cost Classification
E. Cost Absorption

Answer

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Tags: Cost Grouping, Costing, Management Information, MCQ
Level: Level 1

Topic: Cost Classifications
Series: NOV 2019

MI – Mar-Jul 2020 – L1 – SA – Q10 – Cost Classification

Identify the cost that is charged against revenue irrespective of production volume.

Question

Costs that are charged against revenue irrespective of the volume of production achieved are known as:

A. Semi-variable costs
B. Period costs
C. Direct costs
D. Marginal costs
E. Conversion costs

Answer

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Tags: Cost Classification, Cost Management, Period Costs
Level: Level 1

Topic: Cost Classifications
Series: MAR/JULY 2020

MI – May 2016 – L1 – SA – Q3 – Cost Classifications

Identify which characteristic is not true for not-for-profit organizations.

Question

Which of the following is similar to accounting for scrap value of abnormal gain?

A. Accounting for scrap value of abnormal loss
B. Accounting for scrap value of normal loss
C. Accounting for scrap value of normal gain
D. Accounting for scrap value of by-products
E. Accounting for scrap value of joint products

Answer

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Tags: Cost Elements, Managerial Accounting, Not-for-profit
Level: Level 1

Topic: Cost Classifications
Series: MAY 2016

Topic: Cost Classifications

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FA – May 2014 – L1 – SA – Q15 – Cost Classification

This question tests knowledge of classifying costs in a manufacturing context.

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MI – May 2018 – L1 – SA – Q9 – Cost Classifications

Classification of period costs.

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MI – May 2018 – L1 – SA – Q6 – Cost Classifications

Understanding conversion costs.

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MI – May 2018 – L1 – SA – Q5 – Cost Classifications

Definition of stepped costs.

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MI – May 2018 – L1 – SA – Q4 – Cost Classifications

Identifying the components of mixed costs.

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MI – May 2018 – L1 – SA – Q3 – Cost Classifications

Examining the relationship between direct and variable costs.

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MI – May 2018 – L1 – SA – Q2 – Cost Classifications

Definition of cost behavior.

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MI – Nov 2021 – L1 – SA – Q1 – Cost Classifications

Identify the purpose that is not part of cost codes.

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MI – May 2022 – L1 – SA – Q8 – Cost Classifications

Identifying a classification not related to fixed costs.

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MI – Nov 2022 – L1 – SA – Q7 – Cost Classifications

Definition of fixed costs in relation to output

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MI – Nov 2022 – L1 – SA – Q2 – Cost Classifications

Identification of direct material as a cost type

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MI – May 2021 – L1 – SB – Q3b – Cost Classifications

List factors influencing the choice of methods for pricing materials issued to production.

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MI – May 2021 – L1 – SA – Q1 – Cost Classifications

Identify the difference between prime cost and production cost.

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MI – Nov 2023 – L1 – SA – Q2 – Cost Classifications

Identifying the document that includes detailed cost center and cost unit information.

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MI – May 2023 – L1 – SA – Q5 – Cost Classifications

This question asks for the term used to describe assigning indirect costs to cost centres.

You're reporting an error for "MI – May 2023 – L1 – SA – Q5 – Cost Classifications"

MI – May 2023 – L1 – SA – Q4 – Cost Classifications

This question asks for the method of allocating costs based on individual usage of a common cost.

You're reporting an error for "MI – May 2023 – L1 – SA – Q4 – Cost Classifications"

MI – May 2023 – L1 – SA – Q2 – Cost Classifications

This question asks for the identification of another name for mixed cost.

You're reporting an error for "MI – May 2023 – L1 – SA – Q2 – Cost Classifications"

MI – Nov 2019 – L1 – SA – Q1 – Cost Classifications

This question asks to identify the term for the process of grouping costs according to their common characteristics.

You're reporting an error for "MI – Nov 2019 – L1 – SA – Q1 – Cost Classifications"

MI – Mar-Jul 2020 – L1 – SA – Q10 – Cost Classification

Identify the cost that is charged against revenue irrespective of production volume.

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MI – May 2016 – L1 – SA – Q3 – Cost Classifications

Identify which characteristic is not true for not-for-profit organizations.

You're reporting an error for "MI – May 2016 – L1 – SA – Q3 – Cost Classifications"

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