Accounting Assignment

1 Which of the following is the best definition of product costs?
1 Product costs are the costs associated with unsold products retained in stock. 2 Product costs are those costs associated with goods or services purchased or produced for sale to customers.
3 Product costs are those costs that change with changes in the level of product activity, over a defined period of time.
4 Product costs are overhead costs that are allocated over a number of products of the business for which costs are to be determined.
2 Which of the following describes a fixed cost?
1 any overhead cost incurred in the factory of a manufacturing company
2 any selling, general or administrative cost incurred in a manufacturing company
3 a total cost that remains constant within the relevant range of output
4 a total cost that fluctuates with changes in output
3 Which of the following is likely to be classified as a direct material cost of a motor car wheel?
1 the cost of the quality inspection checks on the finished car wheels
2 the cost of operating the raw material stores in the factory
3 the metal used to manufacture a motor car wheel
4 the metal used to manufacture one of the tools used in the car wheel factory
4 Which of the following is the best definition of a variable cost?
A variable cost is one that --------.
1 is directly traceable to an activity of the business for which the cost will be used
2 is associated with goods or services purchased, or produced, for sale to customers
3 changes with changes in the level of activity, over a defined period of time
4 is spread over a number of activities of the business for which costs are to be determined
5 In most companies, direct labour is treated as a --------- cost.
1 product
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2 period
3 fixed
4 sunk
6 Which of the following is a direct labour cost?
1 the wages of an operative paid on the basis of output achieved
2 a bonus paid to the stores clerk
3 the costs of the payroll accounting section
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