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
Chapter # 1: The Fundamental of Costing
Q-11) What is direct cost?
A direct cost is a cost that can be traced in full
to cost unit.
Q-12) What is indirect/overhead cost?
[MJ10]
Indirect is a cost that cannot be traced in full
to the cost unit.
Q-13) Classify different overhead costs
with example.[MJ10]
There are four types overheads:
(a) Production overhead
(b) Administration overhead
(c) Selling overhead
(d) Distribution overhead
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]
[Answer No. 17 to 19]
Q-17) What is fixed cost?
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.
- the salary of the managing director
- the rent of single factory building,
- straight line depreciation of a single
machine,
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
3
partly affected by change in the level of
activity.
- electricity and gas bill,
- sales representatives’ salary,
Q-20) What is relevant range?
The relevant range is the range of activity
levels within which assumed cost behavior
patterns occur.
Q-21) What is responsibility accounting?
Responsibility accounting is a system of
accounting that segregates revenue and costs
into areas of personal responsibility to monitor
and assess the performance of each part of an
organization.
Responsibility centre:
A responsibility centre is department or
function whose performance is direct
responsibility of a specific manger.
Q-22) Responsibility accounting is a
technique that help-controlling
costs, - state briefly how it done.
[ND10]
Q-23) What is Controllable cost? [MJ10]
A controllable cost is a cost that can be
influenced by the management actions and
decisions.
Q-24) What is Uncontrollable cost?
[MJ10]
An uncontrollable cost is a cost that cannot be
affected by the management within a given
time span.
Management Information 4
Chapter # 1: The Fundamental of Costing