Cost Classifications – Page 3

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 – May 2016 – L1 – SA – Q1 – Cost Classifications

Identifying cost behavior type when production hours vary and managerial requirements change.

Question

A company pays a manager a salary of N40,000 monthly when production is below 320 hours. When the production is between 320-640 hours, two managers would be required. This type of cost is called:

A. Fixed cost
B. Variable cost
C. Stepped variable cost
D. Stepped fixed cost
E. Semi-variable cost

Answer

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Tags: Cost Analysis, Fixed Cost, Semi-Variable Costs, Stepped Costs, Variable Cost
Level: Level 1

Topic: Cost Classifications
Series: MAY 2016

MI – May 2024 – L1 – SA – Cost Classifications

Identifies the classification of production costs from other costs.

Question

Which of the following is classified as a production cost?

A. Other factory costs
B. Selling costs
C. Distribution costs
D. Administration costs
E. Finance costs

Answer

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Tags: Cost Classifications, Factory Costs, Financial management, Production Costs
Level: Level 1

Topic: Cost Classifications
Series: MAY 2024

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.

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

Classification of period costs.

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

Understanding conversion costs.

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

Definition of stepped costs.

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

Identifying the components of mixed costs.

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

Examining the relationship between direct and variable costs.

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

Definition of cost behavior.

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

Identify the purpose that is not part of cost codes.

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

Identifying a classification not related to fixed costs.

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

Definition of fixed costs in relation to output

MI – May 2016 – L1 – SA – Q1 – Cost Classifications

Identifying cost behavior type when production hours vary and managerial requirements change.

MI – May 2024 – L1 – SA – Cost Classifications

Identifies the classification of production costs from other costs.

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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 – May 2016 – L1 – SA – Q1 – Cost Classifications

Identifying cost behavior type when production hours vary and managerial requirements change.

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MI – May 2024 – L1 – SA – Cost Classifications

Identifies the classification of production costs from other costs.

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