Top 30 Questions and Answers-Cost Terms, Concepts, and Classification [With PDF]

Today we’ll learn Top “30” Questions and Answers- Cost Terms, Concepts, and Classification.” At the end of the post, you’ll get a basic idea of the Cost Terms, Concepts, and Classification.

It will help you increase your knowledge of cost accounting and help you perform well on any competitive exam.

So let’s get started.

Questions and Answers-Cost Terms, Concepts, and Classification

Question-02: What does expense mean?

Answer: The expired portion of the cost is called expense. It is the part of the cost from which the benefit of cost has already been taken.

Question-03: What’s the actual cost?

Answer: The cost incurred is an actual cost. It is a historical or past cost.

Question-05: What are the direct costs?

Answer: Direct costs are linked to and can be traced in an economically feasible way to the specific cost object.

Answer: Indirect costs relate to the particular cost object but cannot be tracked in an economically feasible manner.

Question-08: What is the allocation of costs?

Question-09: What variables influence Direct and Indirect Cost Classifications?

Answer: The variables influence direct and indirect cost classifications are as follows:

Answer:  The variable cost is a cost that changes in total in proportion to changes in the total activity or volume related level.

Question-13: What is the fixed cost?

Answer: The examples of fixed costs are Administrative Salaries, Rent, Insurance, and Rates Etc.

Question-16: What are the examples of semi-variable costs?

Answer: The example of semi-variable costs are gas, Telephone bill, and electricity.

Answer: Any department, division, or segment of a company can be held responsible only for cost, not for revenue, profit, or Investment. For example, Purchase, Admin, Research and Development, etc.

Answer: A cost driver is a variable that causally impacts costs over a given period, such as the level of activity or volume.

Question-19: What is the cost Pool?

Answer: Cost tracing is an assignment of direct costs to a particular cost object.

Question-21: What are the costs of inventory?

Question-22: What are the types of inventory?

Answer: Period costs are all costs in the income statement other than the cost of goods sold. The periodic cost incurred in the accounting period. Because they are expected to benefit from revenue over that period and are not expected to benefit from revenue over future periods.

Question-25: What is cost control?

Answer: A method used to customize the unit price without reducing its quality is known as cost reduction.

Answer: The relevant range is the normal activity level or volume band. A specific relationship exists between the level or volume of activity and the cost.

Question-28: What is the meaning of unit cost? And how to calculate the unit cost?

Question-29: What’s the prime cost?

Question-30: What are the conversion costs?

Conversion costs = Direct manufacturing labor costs + Manufacturing overhead costs

I hope, at the end of the article, you have a basic idea about the Cost Terms, Concepts, and Classification . Read these Top “30” Questions and Answers- Cost Terms, Concepts, and Classification and improve your accounting skills and knowledges.

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Cost Allocation: Joint Products and Byproducts Multiple Choice Questions (MCQs) PDF Download - 1

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The Cost Allocation Joint Products and Byproducts Multiple Choice Questions (MCQs) with Answers PDF , Cost Allocation Joint Products and Byproducts MCQs PDF Download e-Book Ch. 10-1 to study MBA Cost Accounting Course . Practice Constant Gross Margin Percentage NRV Method MCQs , Cost Allocation Joint Products and Byproducts trivia questions and answers PDF for online bachelor's degree in business. The Cost Allocation Joint Products and Byproducts MCQs App Download: Free learning app for irrelevant joint costs: decision making, sales value: split off method, joint cost basics, net realizable value method career test for online MBA accounting programs.

The Multiple Choice Question (MCQ Quiz): The first step in constant gross margin percentage, Net realizable value (NRV) method is to allocate joint, to compute; "Cost Allocation: Joint Products and Byproducts" App Download (Free) with answers: Total production cost of each product; Gross margin percentage; Allocated joint costs; Cost of split off point; for online bachelor's degree in business. Solve Nonlinearity & Cost Functions Quiz Questions , download Google eBook (Free Sample) for online bachelor's degree in business management.

Cost Allocation Joint Products & Byproducts MCQ with Answers PDF Download : Quiz 1

The first step in constant gross margin percentage, Net realizable value (NRV) method is to allocate joint, to compute

  • Gross margin percentage
  • total production cost of each product
  • allocated joint costs
  • cost of split off point

An additional cost, incurred for some specific activity to bring processed product on to next production stage is

  • partial cost
  • relevant cost
  • incremental cost
  • irrelevant cost

A joint cost allocation method is based on relative value of total sales, at the point of split off is classified as

  • sales value at split off method
  • joint costs at split off point method
  • joint products value at split off method
  • main product cost at split off method

In a joint process of production, the product which yields low volume of sales as compared to total sales of other products, specify as

  • Second incremental product
  • First incremental product
  • step down product

The difference between final sales value and separable costs is equal to

  • net realizable value
  • Gross margin
  • Gross realizable value

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  • Repurchase agreements having maturity of one week or lesser have denominations of
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Cost Allocation: Joint Products & Byproducts MCQ Book Questions

  • Joint cost allocation method, in which individual product from joint products must gain a gross margin percentage is classified as
  • Gross margin is subtracted from sales value of all production to yield
  • Final sales is subtracted from net realizable value is used to calculate
  • If net realizable value is $20000 and separable costs are $18000, then final sales will be
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Reader interactions.

June 20, 2024 at 11:21 am

Hello, for question 3, I used the high low method to answer this question and I didn’t get an answer anywhere near 120,000.

I got to the point of calculating that the cost per unit was $5 and then I determined the fixed cost of 100,000 and I multiplied 22,000 units by 5 and added the fixed cost which was a number way higher than 120,000.

How come the high low method didn’t work here and how would I go about solving a question like this?

Please can you expand on the explanation provided.

Thank you so much

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June 20, 2024 at 7:36 pm

The high low method does work here!!

The variable cost per unit is (135 – 110,000) / (25,000 – 20,000) = $5

The fixed cost is therefore 110,000 – (20,000 x 5) = $10,000. I don’t know how you managed to get it to be $100,000.

Therefore the total cost for 22,000 units is (22,000 x 5) + 10,000 = 120,000

Have you watched my free lectures on this?

June 26, 2024 at 4:14 pm

Yes I have been watching the free lectures and thank you so much for your response and the help. I really appreciate these lectures and everything OpenTuition has to offer.

May 21, 2024 at 11:24 am

No, I don’t leave.. I’m still pursuing ACCA Financial and Management Accounting Level ( FA 2 and MA 2)

October 28, 2023 at 9:11 am

would some more q8estion like q2

October 28, 2023 at 4:59 pm

You should buy a Revision Kit from one of the ACCA Approved Publishers. It is full of exam standard questions for practice.

August 24, 2023 at 3:37 pm

sorry sir i need a better explanation on this question

August 24, 2023 at 4:16 pm

You do not say which question you are referring to!!! (I assume that you have watched the free lectures)

' src=

February 16, 2024 at 9:04 pm

Please Sir l need better explanations on q2 and q3

August 20, 2023 at 11:15 am

In question 2 where did the 30,000 come from

August 20, 2023 at 4:22 pm

The difference in the total cost is $35,000. $5,000 of this is the extra fixed cost and so only the remaining $30,000 is the extra variable cost due to producing more units.

June 14, 2023 at 5:23 pm

Hi can you please explain how the difference of costs 35000 was calculated?

June 15, 2023 at 6:45 am

I assume you are referring to question 2, in which case the difference between the total costs is 170,000 – 135,000 = 35,000.

February 18, 2023 at 9:40 am

question second. the variable cost (170000 – 135000)/(22000 – 16000) is 5.83 ig considering that the i got 163320 as my answer

February 18, 2023 at 10:47 am

5,000 of the increase in the total cost is due to the step-up in fixed costs, so only the rest of the difference is due to variable costs. You can find the workings by clicking on ‘review quiz’ after submitting your answers.

February 20, 2023 at 10:59 am

thank you for your assistance got that.

February 20, 2023 at 4:37 pm

You are welcome 🙂

January 25, 2023 at 11:53 pm

How was the total cost for 22000 units derived after find the variable cost per unit which is $5 For Q3

January 26, 2023 at 6:36 am

The fixed cost must be the same at each level, and therefore the only difference between the total cost of 22,000 units and the total cost of 20,000 units must be the extra variable cost f the extra 2,000 units.

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  23. MA Chapter 4 Questions Cost Classification and Behaviour

    Hello, for question 3, I used the high low method to answer this question and I didn't get an answer anywhere near 120,000. I got to the point of calculating that the cost per unit was $5 and then I determined the fixed cost of 100,000 and I multiplied 22,000 units by 5 and added the fixed cost which was a number way higher than 120,000.