21. Cost classification

Question 1

What are the two types of costs?

Answer 1

Manuf. costs and non-manufacturing costs

Question 2

What are the two types of Manuf. costs + examples

Answer 2

Direct costs: raw materials, manuf. wages

Indirect costs: light, supervisor,

Question 3

What are the two types of non.manuf costs?

Answer 3

Admin

Selling and Distribution

Question 4

Controllable Cost

Answer 4

-Can be controlled and decided by manager in cost center
-if a variance occurs they will be held responsible
-all Variable Costs are controllable
Eg. Commission to salespeople

Question 5

Uncontrollable cost

Answer 5

-cannot be controlled or decided by manager in Cost center
- manager not responsible for variance
-all FC’s are uncontrollable
Eg. Rates charged by govt

Question 6

What goes on the x and y axis ?

Answer 6

Y axis : cost/revenue

X axis: qty

Question 7

Fixed cost sketch

Answer 7

Straight line across

Question 8

Variable cost sketch

Answer 8

Diagonal line starting fro origin

Question 9

Mixed cost sketch

Standing charge

Answer 9

Diagonal line NOT FROM ORIGIN - total cost

Horizontal line from fixed cost.