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    MI CH 1. The Fundamental of Costing

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    Ponkoj Sarker Tutul
    This document contains 24 questions related to fundamental cost accounting concepts. It covers topics such as the definition of cost accounting, the functions of cost accounting in providing information for decision making, planning and control. Other concepts discussed include cost objects, cost units, direct and indirect costs, fixed and variable costs. Responsibility accounting and the classification of costs as controllable and uncontrollable is also summarized. The document provides examples and discusses how these fundamental cost accounting concepts apply to different organizations like hospitals, colleges, power stations and more.

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    MI CH 1. The Fundamental of Costing

    Uploaded by

    Ponkoj Sarker Tutul
    79 views4 pages
    This document contains 24 questions related to fundamental cost accounting concepts. It covers topics such as the definition of cost accounting, the functions of cost accounting in providing information for decision making, planning and control. Other concepts discussed include cost objects, cost units, direct and indirect costs, fixed and variable costs. Responsibility accounting and the classification of costs as controllable and uncontrollable is also summarized. The document provides examples and discusses how these fundamental cost accounting concepts apply to different organizations like hospitals, colleges, power stations and more.

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    This document contains 24 questions related to fundamental cost accounting concepts. It covers topics such as the definition of cost accounting, the functions of cost accounting in providing information for decision making, planning and control. Other concepts discussed include cost objects, cost units, direct and indirect costs, fixed and variable costs. Responsibility accounting and the classification of costs as controllable and uncontrollable is also summarized. The document provides examples and discusses how these fundamental cost accounting concepts apply to different organizations like hospitals, colleges, power stations and more.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    79 views4 pages

    MI CH 1. The Fundamental of Costing

    Uploaded by

    Ponkoj Sarker Tutul
    This document contains 24 questions related to fundamental cost accounting concepts. It covers topics such as the definition of cost accounting, the functions of cost accounting in providing information for decision making, planning and control. Other concepts discussed include cost objects, cost units, direct and indirect costs, fixed and variable costs. Responsibility accounting and the classification of costs as controllable and uncontrollable is also summarized. The document provides examples and discusses how these fundamental cost accounting concepts apply to different organizations like hospitals, colleges, power stations and more.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 4

    Management Information - 100 Marks

    Q-1) What is cost accounting?


    Q-2) What are the functions of cost accounting?
    Or
    How cost accounting help?
    Cost accounting is concerned with providing information to assist what?
    Q-3) Management accounting
    Q-4) What are Differences between Financial accounting versus cost accounting?
    Q-5) What is Cost object?
    Q-6) What is Cost unit? [MJ10]
    Q-7) What should be the cost unit for the following organization:
    (a) Hospital
    (b) College
    (c) Power Station
    (d) Railway
    (e) College
    (f) Telephone company
    [MJ10]
    Q-8) Which one of the following items might be a costs unit within the management accounting
    system of a university or a college of further education?
     Business studies department
     A student
     A college building
     The university itself.
    [ND10]
    Q-9) Composite cost unit
    Q-10) What are the cost elements?
    Q-11) What is direct cost?
    Q-12) What is indirect/overhead cost? [MJ10]
    Q-13) Classify different overhead costs with example.[MJ10]
    Q-14) What is product cost? [ND10]
    Q-15) What is Period cost? [ND10]
    Q-16) Analyze costs according to their behavior with a graphical presentation. [MJ10]
    Q-17) What is fixed cost?
    Q-18) What is variable cost?
    Q-19) What is Semi variable or semi fixed or mixed cost?
    Q-20) What is relevant range?
    Q-21) What is responsibility accounting?
    Q-22) Responsibility accounting is a technique that help-controlling costs, - state briefly how it done.
    [ND10]
    Q-23) What is Controllable cost?
    Q-24) What is Uncontrollable cost?
    Management Information 2
    Chapter # 1: The Fundamental of Costing

    Q-1) What is cost accounting? Example of cost object:


    - A unit of product,
    Cost accounting dealt with ways of - A unit of services,
    accumulating historical information about cost - A department or functions,
    and of charging these costs to unit of output or - A project,
    to department, in order to establish inventory - A new product or service.
    valuations, profit and losses and balances of Q-6) What is Cost unit?
    Balance Sheet items. It has since been A cost unit is a basic measure of a product or
    extended to planning, control and decision service for which costs are determined.
    making.

    Q-7) What should be the cost unit for


    Q-2) What are the functions of cost the following organization:
    accounting? (a) Hospital
    Or (b) College
    How cost accounting helps? (c) Power Station
    Or (d) Railway
    Cost accounting is concerned with (e) College
    providing information to assist (f) Telephone company
    what? [MJ10]
    Or
    How cost information helps in Organization Possible cost units
    decision making? [MJ10] 1 Hospital Patient/day
    operation
    Cost accounting is concerned with providing 2 College Cost per student
    information to assist the following:- 3 Power station Cost per KW
    - establishing inventory valuation, profit 4 Railway Cost per passenger
    and losses and balance sheet items, 5 Telephone company Cost per minute call
    - planning,
    - control,
    - decision making. Q-8) Which one of the following items might
    be a costs unit within the management
    accounting system of a university or a
    Q-3) Management accounting college of further education?
    i. Business studies department
    Management accounting is basically concerned ii. A student
    with provision of information to the iii. A college building
    management to assist management with iv. The university itself.
    planning, control and decision making. [ND10]

    Q-9) Composite cost unit


    Q-4) What are Differences between
    Financial accounting versus cost Some of the cost units are made up of two
    accounting? parts, for example patient/day cost unit for
    (a) definition, hospital. These two part known as composite
    (b) users units and they are used most often in service
    (c) law organizations. Composite cost units help to
    (d) format improve cost control.
    (e) Area
    (f) Unit
    (g) Time/period Q-10) What are the cost elements?

    (a) Material,
    Q-5) What is Cost object? (b) Labor,
    A cost object is in anything for which we are (c) Other expenses.
    trying to ascertain the cost.
    Management Information 3
    Chapter # 1: The Fundamental of Costing
    partly affected by change in the level of
    Q-11) What is direct cost? activity.
    A direct cost is a cost that can be traced in full
    to cost unit. - electricity and gas bill,
    - sales representatives’ salary,

    Q-12) What is indirect/overhead cost?


    [MJ10] Q-20) What is relevant range?

    Indirect is a cost that cannot be traced in full The relevant range is the range of activity
    to the cost unit. levels within which assumed cost behavior
    patterns occur.
    Q-13) Classify different overhead costs Q-21) What is responsibility accounting?
    with example.[MJ10]
    Responsibility accounting is a system of
    There are four types overheads: accounting that segregates revenue and costs
    (a) Production overhead into areas of personal responsibility to monitor
    (b) Administration overhead and assess the performance of each part of an
    (c) Selling overhead organization.
    (d) Distribution overhead
    Responsibility centre:
    A responsibility centre is department or
    Q-14) What is product cost? [ND10] function whose performance is direct
    responsibility of a specific manger.

    Q-15) What is Period cost? [ND10]


    Q-22) Responsibility accounting is a
    technique that help-controlling
    Q-16) Analyze costs according to their costs, - state briefly how it done.
    behavior with a graphical [ND10]
    presentation. [MJ10]

    [Answer No. 17 to 19] Q-23) What is Controllable cost? [MJ10]

    A controllable cost is a cost that can be


    Q-17) What is fixed cost? influenced by the management actions and
    decisions.
    A fixed cost is a cost that, within relevant
    range of activity levels is not affected by
    increase or decreases in the level of activity. Q-24) What is Uncontrollable cost?
    [MJ10]
    - the salary of the managing director
    - the rent of single factory building, An uncontrollable cost is a cost that cannot be
    - straight line depreciation of a single affected by the management within a given
    machine, time span.

    Q-18) What is variable cost?

    A variable cost is a cost that increases or


    decreases as the level of increases or
    decreases.
    - the cost of raw materials,
    - direct labor cost,
    - sales commission,

    Q-19) What is Semi variable or semi fixed


    or mixed cost?

    Semi-fixed or semi-variable or mixed cots are


    part-fixed and part-variable and are therefore
    Management Information 4
    Chapter # 1: The Fundamental of Costing

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