This section consists of TEN (10) statements. Each statement is worth one (1) mark. You are required to indicate which of the statements are true or false.

1. It is mandatory in financial accounting to report in the form of financial statements.
2. Leading is to check that performance and actions conform to plans to reach predetermined goals.
3. A cost object can be defined as a unit of output for an organisation.
4. Manufacturing costs are expenses incurred by a business when it converts materials into completed goods for resale.
5. Depreciation on manufacturing equipment can be classified as an administrative cost
6. Prime cost = Direct material + Indirect Material.
7. Cost behaviour is how costs react on changes in price.
8. Example of fixed cost would be a factory supervisors salary or rent paid on a factory premises.
9. Fixed costs remain constant.
10. The traditional costing system can be extremely complicated and difficult to implement.