Behaviour Of Costs & Identifying Behaviour Of Costs

Question 1

What are the 4 most common behaviours of costs ?

Answer 1

1. Fixed-costs
2. Stepped fixed-costs
3. Variable-Costs
4. Semi-Variable costs

Question 2

Behaviours of costs

If a cost varies depending on the volume of activity it is a …………. ? cost

Answer 2

Variable cost

Question 3

Behaviours of costs

What are the most common vairable costs that a business may come across ?

Answer 3

• Direct labour
• Direct materials

Question 4

Behaviours of costs

Which type of cost stays the same at different levels of output ?

Answer 4

Fixed cost

Question 5

Behaviours of costs

Rent, Lease payments and insurance are all examples of what type of cost ?

Answer 5

Fixed costs

Question 6

Behaviours of costs

Semi-variable costs combine which costs?

Answer 6

Fixed and variable costs

Question 7

Behaviours of costs

As activity increases the ……….. cost increases ?

Answer 7

Variable

Question 8

Behaviours of costs

Looking at the behavior of costs in a more long term aspect all costs show a ………… behaviour

Answer 8

Variable

Question 9

Behaviours of costs

What method/formula is used to separate the fixed and vairiable costs within semi-variable costs ?

Answer 9

High low method

Question 10

Cost units are units of O……… to which costs can be charged

Answer 10

Output

Question 11

C…….. C… U…. are units of output which comprise of two variables ?

Answer 11

Composite cost units

Question 12

A unit of production from a factory such as a car, a televison or an item of furniture is an example of a C… U…. ?

Answer 12

Cost Unit

Question 13

(Proft/Investment/Cost/Revenue) centres are segments of a business to which costs can be charged ?

Answer 13

Cost centre

Question 14

In a manufacturing business the (Factory/Office/Warehouse) is where production takes place and the product is ‘finished’ and made ready for selling ?

Answer 14

Factory

Question 15

In a manufacturing business the (Factory/Office/Warehouse) is where finished goods are stored and from where they are despatched once they are sold ?

Answer 15

Warehouse

Question 16

In a manufacturing business the (Factory/Office/Warehouse) is where the support functions take place - (marketing, sales & administration)

Answer 16

Office

Question 17

Materials that are identifiable with the product are (Direct/Indirect) materials ?

Answer 17

Direct

Question 18

The wages of employees that are paid to make the product/ give the servce is (Direct/Indirect) labour ?

Answer 18

Direct

Question 19

Expenses identifiable with the product are (Direct/Indirect) expenses ?

Answer 19

Direct

Question 20

Materials that are not identified directly with production are (Direct/Indirect) expenses ?

Answer 20

Indirect

Question 21

Wages paid to employees that are not directly involved with production are (Direct/Indirect) expenses ?

Answer 21

Indirect

Question 22

Expenses that are not directly involved with production are (Direct/Indirect) expenses ?

Answer 22

Indirect