Introduction

Question 1

Main changes that took place in the business environment

Answer 1

• Service industry predominance
• E-businesses
• Customer is central: TQM
• Shorter product life cycles

Question 2

Categories of cost

Answer 2

• Product vs period cost
• direct (prime) vs indirect (conversion) costs
• Variable vs Fixed costs
• sunk costs

Question 3

Types of manufacturing costs

Answer 3

• direct materials
• direct labour
• manufacturing OH: untraceable and indirect

Question 4

Fixed and variable cost behaviour in a total and per unit basis

Answer 4

• Total variable costs: change in direct proportion to activity level
• Total fixed costs: remains constant no matter the activity level
• variable costs per unit: constant (same price per unit)
• fixed costs per unit: decreases as the level of activity increases

Question 5

Managerial accounting definition

Answer 5

Discuss, identity and analyse information provided to internal users for decision-making, planning and controlling operations in an organisation in order to achieve competitive advantage