Manag Account- Cost Classfiication

Question 1

1. Management accounting is:

Answer 1

Concerned with the provision of information to help managers make decisions

Question 2

3. The materials that are an integral part of the final product are called

Answer 2

Direct materials

Question 3

Marketing Costs fall under which type of Cost Period or Product Cost

Answer 3

Period

Question 4

Direct Labour cost falls under which cost Period Cost or Product Cost

Answer 4

Product Cost

Question 5

Which Combination makes up Prime cost

Answer 5

Direct materials and Direct labour costs

Question 6

What happens to the Variable Cost per unit when 8. When units produced increase

Answer 6

Stays the Same

Question 7

What happens to the Total fixed cost as production increases,

Answer 7

Stays the Same

Question 8

True or False
Fixed cost per unit remains constant.

Answer 8

False

Question 8

Which type of Cost would the salaries of a senior management be

Answer 8

Fixed and Indirect

Question 9

What type of Cost is it when a company spend £79,600 on market research.

Answer 9

A Sunk Cost.

Question 10

Which cost potential benefits that is given up when one alternative is selected over another

Answer 10

Opportunity Cost

Question 11

What is the expression for Total mixed cost

Answer 11

c) Total mixed cost =
Total fixed cost + (Variable cost per unit of activity × Activity level)

Question 12

Which cost is this
Flat salary of £2,000 per month plus a 3% commission on all sales.

Answer 12

Mixed Cost

Question 13

What is the expression for mixed cost using
A
B
X
Y

Answer 13

y=ax+b
OR
y=b+ax

Question 14

How is the high point selected when using the high-low method

Answer 14

Highest point of Volume is activity of chosen

Question 15

Contribution margin meaning

Answer 15

The remaining amount of sales revenue after variable expenses have been deducted

Question 16

Absorption costing treats which manufacturing cost as product costs

Answer 16

Both variable and fixed manufacturing costs

Question 17

What is a clear difference between absorption and variable costing

Answer 17

Fixed Manufacturing overhead

Question 18

If production and sales are equal which method would show higher profit Variable costing and Absorption costing

Answer 18

Both will show the same Profit

Question 19

True or False There is no merit in treating fixed manufacturing overhead costs as product costs

Answer 19

False

Question 20

If production exceeds sales which would show higher profit Variable costing or Absorption costing

Answer 20

Absorption costing

Question 21

True or false
The use of variable costing can replace absorption costing.

Answer 21

False