Practice Importance Of Cost Classification (20.4) - Cost Accounting Basics – Types of Costs

Practice: Importance of Cost Classification

Lesson 20.4Cost Accounting Basics – Types of Costs

Practise this section

9 questions

Flashcard drill
3 cards from this section. Quick, good the night before a test.
Exercise
6 questions · about 4 min · pass mark 70%. Hints available.
Sign up to start the exercise
Quiz
3 questions · about 2 min · pass mark 70%. Hints available.
Sign up to start the quiz

6 sample questions

Question 1.
What is a direct cost?
Show hintHide hint
Think about what items are necessary to produce a product.
Question 2.
Why is budgeting important?
Show hintHide hint
Consider the implications of overspending.
3Question 3.
What is a controllable cost?
- A cost that cannot be influenced by management
- A cost that can be affected by management actions
- A cost that is fixed
Show hintHide hint
Consider what types of expenses are flexible versus those are set.
4Question 4.
True or False: All costs in a business can be classified as either fixed or variable.
- True
- False
Show hintHide hint
Think about other forms of classification.
Question 5.
A manufacturing company wants to analyze its production costs. Identify the potential fixed and variable costs associated with producing one unit of its leading product.
Show hintHide hint
Think about what costs continue even if production stops.
Question 6.
A software development firm is planning to create a new application. What types of costs should they classify, and how will this classification impact their pricing strategy?
Show hintHide hint
Consider how software development projects typically incur different types of costs throughout their lifecycle.

5 more questions in this section. Enroll free to practise them all.