Here’s a quick quiz on cost classifications. As you take the quiz ask yourself the following questions.
- Does the cost change based on an activity? If it does it is a Variable Cost. If it does not, it is a Fixed Cost.
- Can I trace the cost directly to one unit of production? If you can it is a Direct Cost. If you cannot it is an Indirect Cost. Indirect manufacturing costs are allocated to Manufacturing Overhead.
- Is this a cost linked to production or manufacturing? If it is, it is a Product cost. If it is not it is a Non-Manufacturing Period Cost.
Use the form below to complete the quiz and see your results. You can try it as often as you like.
How did you do? 7 out of 10 or less? Review the concepts again.