Cost Classification exercises Question One Choose the correct answer in each of the following questions. Write the correct alphabet only in your answer booklet. Example 1.10 A 1.1 Which of the following is a user of Cost Accounting Information: a) Competitors b) production line managers c) Investors d) none of the above 1.2 Variable cost per unit a) Varies when output varies b) c) Remains constant Increases & output increases Decrease & output decreases. 1.3 Which of the followings is the reason of increase in total variable cost? a) Increase in fixed cost b) Rise in interest on capital c) Depreciation of machinery.d) Increase in direct material cost 1.4 Which of the following is an example of fixed cost? a) Depreciation of machinery b) Electricity of factory c) Direct material cost d) Auditing expenses. 1.5 Product cost include all of the following except a) Manufacturing overheads b) C) Marketing cost d) Direct material Direct labour 1.6 The three elements of period cost are all excluding: a) Direct material cost b) Marketing cost c) Selling and Administration d) Human Resources Page 14 of 66 1.7 Salaries, telephone, stationary and postage expense incurred in the office are examples of: a) Marketing expense b) Direct labour c) Indirect expenses d) Administrative expense