Cost Accounting Questions

QUESTION ONE

1. Explain the difference between the following terms
   1. Product cost and period cost
   2. Sunk cost and relevant cost
   3. Incremental and sunk costs
   4. Fixed and variable cost
   5. Avoidable and unavoidable costs
   6. Controllable and uncontrollable costs
   7. Direct and indirect costs        (14 marks)

b) What is the relevance of cost classification? Is it merely an activity for the sake of it? Explain (6 marks) (20 marks)

QUESTION TWO

Discuss the behavioural classification of costs, explaining all the terms used therein. (20 marks)

QUESTION THREE

Discuss in detail what constitutes manufacturing costs as production costs, administration

costs as well asselling and administration costs. (20 marks)

QUESTION FOUR

The functional classification of costs classifies costs as production costs,

administration costs as well as selling and administration costs.

Explain what constitutes these costs in detail. (20 marks)

QUESTION FIVE

Explain briefly how the following methods are used in cost estimation:

1. Account Analysis
2. Engineering Analysis
3. Scatter Graph Method
4. High Low Method
5. Regression Analysis (20 marks)