MA Cost Classification Quiz

The following shows the cost per unit of an item of expense at different levels of activity:

Activity (units)                     Cost per unit (£)

1                                                  10,000
50                                                  200

100                                                120
150                                                 80

What is the correct behavioral classification for the expense item?

A Company has a storage capacity of l0,000 units in its store room. If at any time the raw material exceeds 10000 units the company has to have another store for which it has to pay rent. Where the raw material exceeds 20000 units it has have 3rd store room for it. Which type of cost the rent expense would be?

In a factory, a team of six maintenance staff are paid a guaranteed weekly wage.

Which of the following is the most appropriate cost classification for their wages?

Prime Cost is:

Which of the following would be classified as a fixed cost in the operation of a motor vehicle?

Unit cost and Cost Unit are the terms used interchangeably

A particular cost is classified as being semi-variable.

What is the effect on the cost per unit if activity increases by 10%?

Direct costs can be traced specifically to a cost unit

Which of the following statements about cost and management accounting are true?

1. Cost accounting cannot be used to provide inventory valuations for external financial reporting

2. There is a legal requirement to prepare management accounts
3. The format of management accounts may vary from one business to another
4. Management accounting provides information to help management make business decisions

34. Production costs have been estimated at two levels of output:

What are the estimated production costs per unit at an output level of 54,000 units?

Total costs incurred by a business may be expressed as:

y = a + bx

When y represents the total costs

a represents the total fixed costs

b represents the variable costs per unit

x represents the number of units of output

A company has variable costs of £12·20 per unit and total costs, for output of 7,400 units in a period, of £156,980.

Using the above formula and information, what are the total fixed costs in the period?

The chart below shows the behavior of a total cost as the volume of output changes:

What sort of cost is being illustrated?

Production units and total costs relating to the last three periods have been:

Using the high-low method, what is the estimated variable cost per unit of production?

Which one of the following should be classified as indirect labour?

Up to a given level of activity in each period the purchase price per unit of a raw material is constant.  After that point a Higher price per unit applies both to further units purchased and also retrospectively to all units already purchased.

Which of the following statements best describes the above graph?

Which of the following statement is consistent with the above graph?

A cellular phone company has announced a package which it has named as “talky shalky”. Any one who activates this package is subject to a call connection charge of $6/call, and call charges of $2/minute. Where a costumer talks for more than 10 minutes in a single call he will not be charged for any additional minute. Which of the following graphs best describes this package?

Following are the different types of costs at two different type of activity levels

Cost Type           Cost ($)            Cost ($)
                             1000 Units       2000 Units

P                          4500                  9000
Q                         5500                  7000
R                         10000              10000

At a certain level of output a company has total cost of $60000. If variable cost is $4/unit and fixed cost Is $20000 what is the level of such output