1. Which of the following is NOT a component in cost

accounting?

a) Direct costs

b) Indirect costs

c) Operating costs

d) Variable costs

Answer: c) Operating costs

Rationale: Operating costs typically refer to ongoing

expenses for running a business, whereas cost accounting

primarily focuses on the classification and analysis of

direct and indirect costs.

2. Which of the following best describes direct costs in cost

accounting?

a) Costs that can be easily traced to a specific product or

service.

b) Costs incurred for general business operations.

c) Costs that remain constant regardless of production

levels.

d) Costs that fluctuate based on the production volume.

Answer: a) Costs that can be easily traced to a specific

product or service.

Rationale: Direct costs can be directly attributed to a

specific product, service, or department, such as direct

materials and direct labor.

3. Indirect costs in cost accounting:

a) Cannot be allocated to specific products or services.

b) Are always included in the calculation of variable costs.