Manufacturing: Cost Accounting & Break-even is one of 9 topics in the Grade 12 Accounting CAPS syllabus, covered across 3 lessons on Study Vault. Below are real practice questions from this topic with full worked answers.
Sample practice questions
Easy
1. Direct material and direct labour are examples of:
Direct costs, traceable directly to producing a specific unit of product
Indirect costs, that cannot be traced to a specific unit
Fixed costs only, that never change
Non-manufacturing costs
Answer: Direct costs, traceable directly to producing a specific unit of product — Direct material and direct labour can both be traced specifically to the units they help produce, making them direct costs by traceability.
Easy
2. Factory rent, which stays the same regardless of how many units are produced in a month, is an example of:
A fixed cost
A variable cost
A direct cost
Prime cost
Answer: A fixed cost — Fixed costs remain constant in total regardless of production volume (within a relevant range), and factory rent is a classic example.
Medium
3. Prime cost is calculated as:
Direct Material Cost + Direct Labour Cost
Direct Material Cost + Factory Overheads
Direct Labour Cost + Factory Overheads
Total Cost of Production - Factory Overheads only
Answer: Direct Material Cost + Direct Labour Cost — Prime Cost = Direct Material Cost + Direct Labour Cost, representing the costs most directly tied to physically making the product.
