Costing - Study Mode

[#1071] Fancy packing is an example of . . . . . . . . expenses.
Correct Answer

(A) selling

[#1072] Which of these is not an objective of Cost Accounting?
Correct Answer

(D) Assisting Shareholders in decision making

Explanation

Solution: Assisting Shareholders in decision making is not an objective of Cost Accounting. Objectives of cost accounting are ascertainment of cost, fixation of selling price, proper recording and presentation of cost data to management for measuring efficiency and for cost control and cost reduction, ascertaining the profit of each activity, assisting management in decision making and determination of break-even point.

[#1073] A profit centre is a centre ____________.
Correct Answer

(A) Where the manager has the responsibility of generating and maximising profits

Explanation

Solution: A profit centre is a centre where the manager has the responsibility of generating and maximising profits. In a profit centre, the manager has the responsibility and the authority to make decisions that affect both costs and revenues (and thus profits) for the department or division. The main purpose of a profit centre is to earn profit. Profit centre managers aim at both the production and marketing of a product.

[#1074] Responsibility Centre can be categorised into:
Correct Answer

(D) Cost Centres, Profit Centres and Investment Centres

Explanation

Solution: Responsibility Centre can be categorised into Cost Centres, Profit Centres and Investment Centres. Responsibility centers are often categorized by the degree of authority and responsibility given to the manager.

[#1075] Cost Unit is defined as:
Correct Answer

(A) Unit of quantity of product, service or time in relation to which costs may be ascertained or expressed

Explanation

Solution: Cost Unit is defined as Unit of quantity of product, service or time in relation to which costs may be ascertained or expressed. A cost unit refers to the unit of quantity of product, service or time (or combination of these) in relation to which costs may be ascertained or expressed.