1: (20 Marks) 1A: (10 Marks) estions: 1-5, Each Question carry 2 Marks) stions:

Question

1: (20 Marks) 1A: (10 Marks) estions: 1-5, Each Question carry 2 Marks) stions: Choose the Best option 1. Which of the following would you do In a decision making process A. Assemble relevant data B. Define the Goal or Objectives C. Recognize the problem D. Audit the results Which of the following is an example of indirect cost A. Factory manager's salary B. Precise amount of solder used on board produced at a computer manufacturing C. Both A and B 2. D. None of the above 3. Which of the following is not a manufacturing cost A. Raw material B. Touch labor C. Utilities D. Marketing Costs 4. Which of the following is constant per unit of activity but changes in total as the activity level rises and falls? A. Fixed cost B. Variable cost C. Hidden cost D. Salvage cost 5. If you quit your job to start your own business, which of the following cost best describes your salary A. Differential cost B. Opportunity cost C. Salvage cost D. Sunk cost

Explanation / Answer

1. In a decision making process you'll need to recognize the problem first and find a solution to it as our current state of affairs and desired states differs.

Answer- option C

2. A cost can be considered indirect if it is impractical or impossible to trace the cost. The salary of factory manager is impossible to trace and you can measure the precise amount of solder used on board produced at a computer manufacturing but measuring it would be impractical and not worth the effort.

So, both of these are indirect costs.

Answer- option C

3. Manufacturing costs include direct material costs(Raw material cost), factory overhead(utilities), direct labor costs(touch labor costs) but marketing cost is not included in manufacturing cost.

Answer- option D

4. It's variable cost, where cost per unit is constant but the total cost varies directly with the level of activity.

Answer- option B

5. It's the opportunity cost because you give up your job salary to start your business. The salary of Your job is the opportunity cost of starting your business.

Answer- option B

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