EiTEX- BAHIR DAR UNIVERSITY

ETHIOPIAN INSTITUTE OF TEXTILE AND FASHION TECHNOLOGY

Name ________________________________
Program: V Garment Engineering

ID____________________________
Section:

Answer All Questions. All questions carry equal marks

11 X 1 = 11

1. Which of the following is a period cost?

A.

direct materials

B.

indirect materials

C.

factory utilities

D.

administrative expenses

2. When deciding to accept a special order at below the normal selling price a firm would
consider which cost?
A. Marginal cost

B. Full cost C. Absorption cost D. Overhead cost

3. The cost which is changed in proportion to level of total volume is classified as

A. fixed cost

C. variable cost

B. total cost

D. infeasible cost

4. The costs are classified as fixed or variable on the basis of

A. Specific activity

C. given time period

B. Common activity

D. both A and C

E. both A and B

5. The total of all direct costs of production is also known as:

A.

Prime cost

B. Total cost C. Variable cost D. Production costs

6. The cost which remains unchanged in proportion to level of total volume of production
is classified as
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A. Total cost

B. Infeasible cost C. Fixed cost

D. variable cost

7. Which of the following costs has no relationship with the level of output?
A. Fixed costs. B. Semi-variable costs. C. Stepped fixed costs. D. Variable costs.

8. An opportunity cost is:

A)

The difference between the total cost of one alternative and the total cost of another

alternative.
B)

The benefit forgone when one alternative is selected rather than another.

C)

A cost that is saved by not adopting a given alternative.

D)

A cost that continues to be incurred even when there is no activity.

9. A 'direct' cost is a cost that is classified by:

A.

behavior

B.

traceability

C. controllability

D.

relevance

10. A cost which changes in proportion to changes in volume of activity is called a:

A.

fixed cost

C.

variable cost

B.

controllable cost
d.

opportunity cost

11. A cost which is connected with production but does not vary directly with the level of
output may be known as:
A. selling and distribution expense. B. factory indirect expense.
C. variable cost.

D.direct cost.
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