BSNS115 EXAM QUESTIONS AND ANSWERS VERIFIED
GRADED A++
What is a direct cost?
Can easily and conveniently be traced to a unit of product
eg - material used for sewing dresses at a dress maker
POAR formula
Cost Pool / CAB
Qualitative decision making rule in make or buy?
Make - avoidable costs must be less than purchase price
Buy - avoidable costs must be more than purchase price
What is product mix?
- Use of scarce resources
- How to make the most amount of money with a constraint
- Deciding which mix of products to maximise profit
- CM per limiting factor
What are the qualitative characteristics?
- Relevance
- Reliability
, - Comparability
- Understandability
What does an accountant do?
- Cost accounting
- Auditing
- Internal auditing
What is financial accounting?
- Process that results in preparing and reporting financial statements
- External
- Concerned about historical results
What is an indirect cost?
- Not easily traceable to a unit of a product
eg - how much oil is used at a fish and chip shop
Product cost formula:
Direct costs + OH allocation
Limitations of Financial Statements:
- Time lag
- Subjectivity
- Cost
- Outdated data
What is the Value Chain Functions purpose?
The functions that over the life of a product add value to the customer
Breakeven in Units + desired profit formula:
GRADED A++
What is a direct cost?
Can easily and conveniently be traced to a unit of product
eg - material used for sewing dresses at a dress maker
POAR formula
Cost Pool / CAB
Qualitative decision making rule in make or buy?
Make - avoidable costs must be less than purchase price
Buy - avoidable costs must be more than purchase price
What is product mix?
- Use of scarce resources
- How to make the most amount of money with a constraint
- Deciding which mix of products to maximise profit
- CM per limiting factor
What are the qualitative characteristics?
- Relevance
- Reliability
, - Comparability
- Understandability
What does an accountant do?
- Cost accounting
- Auditing
- Internal auditing
What is financial accounting?
- Process that results in preparing and reporting financial statements
- External
- Concerned about historical results
What is an indirect cost?
- Not easily traceable to a unit of a product
eg - how much oil is used at a fish and chip shop
Product cost formula:
Direct costs + OH allocation
Limitations of Financial Statements:
- Time lag
- Subjectivity
- Cost
- Outdated data
What is the Value Chain Functions purpose?
The functions that over the life of a product add value to the customer
Breakeven in Units + desired profit formula:
