Cost Accounting Interview Questions and Answers

1 :: What is BEP?

BEP- Break Event Point: It indicates no Loss and no Profit

The level of activity at which, total revenues equal total costs.

A point at which there is no profit and no loss.

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2 :: Describe some of the methods used to allocate support costs.

Headcount or number of pc's per cost centre.

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3 :: What are variable costs?

Variable costs are those that are directly proportionate with the quantity of production and or directly associated with the service.

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4 :: What is marginal cost?

The marginal cost of an additional unit of output is the cost of the additional inputs needed to produce that output. More formally, the marginal cost is the derivative of total production costs with respect to the level of output.

Marginal cost and average cost can differ greatly. For example, suppose it costs $1000 to produce 100 units and $1020 to produce 101 units. The average cost per unit is $10, but the marginal cost of the 101st unit is $20

The Econ Model applications Perfect Competition and Monopoly emphasize the roles of average cost and marginal cost curves. The short movie Derive a Supply Curve (40 seconds) shows an excerpt from the Perfect Competition presentation that derives a supply curve from profit maximizing behavior and a marginal cost curve.

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5 :: Explain cost sheet?

Cost sheet is a statement of cost for a product for given period of time.

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