Cost Classification Flashcards
CHAPTER 3
1
Q
Example of Prime Cost
A
- Raw material
- Component parts
- Part-finished work
- Primary packing material
2
Q
Does all fixed cost non-controllable?
YES/NO
A
NO
Fixed cost divided by 2
a) Commited
–> Support the long term needs of the business
b) Discretionary
–> On the decision of budget holder, could be raised/lowered
3
Q
Importance of cost unit information
A
- Determine a selling price
- Decide what to produce
- Help with cost control
- Plan & budget
4
Q
Match goods in invoice with ??
A
GRN
5
Q
Match price of goods in invoice with ??
A
Purchase order
6
Q
Characteristics of effective coding system
A
1) Logical
2) Concise
3) Consistent
4) Unique
5) Expandable
7
Q
Chart of Accounts
A
A document that contains comprehensive details on the classes of codes and the accounts and items they identify
8
Q
Expense
A
Decreases in economic benefits during the accounting period in the form of outflows, depletions of assets, or incurrences of liabilities.
