Week 2, Topic 2 Classifications of Costs further

Question 1

Cost objects:

Answer 1

any item for which costs are being separately measured

Question 2

Cost pool:

Answer 2

an aggregate of all the costs associated with performing a particular business task such as manufacturing a product

Question 3

Cost Centres:

Answer 3

a part of an organization to which costs may be charged for accounting purposes

Question 4

Cost unit:

Answer 4

a unit of product or service in relation to which costs are established

Question 5

we classify costs for inventory valuation for internal and external profit measurement and in order to do this we must distinguish between

Answer 5

direct and indirect

Question 6

Direct costs -

Answer 6

specifically and exclusively identified with a given cost object

Question 7

Indirect costs-

Answer 7

cannot be specifically and exclusively identified with a given cost object

Question 8

using costing for inventory purposes also distinguishes difference between-

Answer 8

product costs (attached and included in the stock)

Period costs are not attached to the product and not included in the inventory valuation