Practice Other Special Types Of Costs (20.3) - Cost Accounting Basics – Types of Costs

Practice: Other Special Types of Costs

Lesson 20.3Cost Accounting Basics – Types of Costs

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9 questions

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3 questions · about 2 min · pass mark 70%. Hints available.
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6 sample questions

Question 1.
What is opportunity cost?
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Think about a situation where you choose between two job offers.
Question 2.
Define sunk cost.
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Relate it to past investments.
3Question 3.
What does opportunity cost refer to?
- Benefit from choosing an alternative
- Cost incurred that cannot be recovered
- Additional cost from producing more
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Think about what you give up.
4Question 4.
True or False: Sunk costs should influence future financial decisions.
- True
- False
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Consider a scenario where a company invests in additional training.
Question 5.
A company has spent ₹100,000 on research and development for a product that was supposed to launch. However, market conditions have changed, and they foresee a better opportunity in an alternative product. How should they account for the ₹100,000 in their decision-making?
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Consider which costs are recoverable.
Question 6.
A bakery calculates that to produce an additional batch of cookies, this incurs ₹200 in raw materials and labor. However, signing a new contract for a larger order means increased production costs. Calculate the marginal cost and assess if production should be increased.
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Review pricing strategies and profit margins.

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