Accounting where financial statements produced through financial accounting are designed to disclose the firm's business performance and financial health
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What is managerial accounting?
Accounting where there is the use of information that encourages strategic planning, helps them set realistic goals, and encourages an efficient directing o
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What is costing?
Costing is ascertaining the cost of a product or service and providing information to be used by management
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Give one reason why it is important to know the cost of something from the perspective of a business manager
to decisions -controlling expenditure - planning and budgeting for the future
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What are material costs? and give one example of such cost
Materials costs are the tangible goods used in producing the product example using plastic to make water bottles
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What are labor costs? and give one example
Labor- Wages and salaries paid to employees involved in manufacturing. For example a grass cutter for a landscaping company
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What are expense costs? and give one example
Expenses- regular operational expenses used for running the business and its activities ( example rent, rates and insurance)
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What is a direct cost?
Direct costs are those that are directly attributable or traceable to the manufacture of a product
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What is an indirect cost?
An indirect cost cannot be directly attributable or traceable to a product or service.
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Which of the following is not an example of a direct cost? Metal used to produce cars, Wood used to make tables, cloth used to make sheets or paper used in the accounting department
Paper used in accounting department
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Which of the following is an example of an indirect expense? Water used in making orange juice, Flour used in baking pastries, electricity used powering a blender for seasoning
electricity used powering a blender for seasoning
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What is a fixed cost?
A fixed cost is a cost that does not change over the short-term, even if a business experiences changes in its sales volume or other activity levels.
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What is a variable cost?
A variable cost is a corporate expense that changes in proportion to production output. Variable costs increase or decrease depending on a company's production
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What is an example of a fixed cost?
Example Rent, Insurance or any flat charges that does not change with activity or production levels
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What is an example of a variable cost?
materials used in production, labor wages if they are based on change in production or activity etc.
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What are unit costs?
A unit cost is a total expenditure incurred by a company to produce, store, and sell one unit of a particular product or service.