by Anette Mcdowell
Understanding the intricacies of product costs is vital for making informed business decisions. This quiz will challenge your knowledge on the various elements that contribute to the cost of a product, from raw materials to pricing strategies. Each question is designed to enhance your comprehension and provide valuable insights into cost management. Ready to test your expertise? Let’s get started!
We recommend that you do not leave the page that you are taking this quiz in. Stay honest 🙂
Product Cost Quiz Questions Overview
1. What is the term for the cost of raw materials and labor used to create a product?
Fixed Cost
Variable Cost
Direct Cost
Indirect Cost
2. Which pricing strategy involves setting prices based on the prices of competing products?
Cost-Plus Pricing
Penetration Pricing
Competitive Pricing
Skimming Pricing
3. What is the term for costs that do not change with the level of production or sales?
Variable Costs
Fixed Costs
Direct Costs
Indirect Costs
4. Which cost is NOT typically considered when calculating the cost of goods sold (COGS)?
Raw Materials
Labor
Marketing Expenses
Manufacturing Overhead
5. What is the term for the cost incurred to produce one additional unit of a product?
Fixed Cost
Variable Cost
Marginal Cost
Total Cost
6. Which of the following is an example of a variable cost?
Rent
Salaries
Utilities
Raw Materials
7. What does the term ‘economies of scale’ refer to?
Increased costs with increased production
Decreased costs with increased production
Constant costs regardless of production
Variable costs only
8. Which pricing strategy involves setting a high price initially and then lowering it over time?
Penetration Pricing
Skimming Pricing
Competitive Pricing
Cost-Plus Pricing
9. What is the break-even point?
The point where total costs equal total revenue
The point where fixed costs are covered
The point where variable costs are covered
The point where profit is maximized
10. Which of the following is NOT a component of total manufacturing cost?
Direct Materials
Direct Labor
Manufacturing Overhead
Administrative Salaries
11. What is the formula for calculating the cost of goods sold (COGS)?
Beginning Inventory + Purchases – Ending Inventory
Beginning Inventory – Purchases + Ending Inventory
Beginning Inventory + Ending Inventory – Purchases
Beginning Inventory + Purchases + Ending Inventory
12. Which cost is typically considered a sunk cost?
Future Marketing Expenses
Past R&D Expenses
Variable Production Costs
Future Raw Material Costs
13. What is the primary purpose of cost allocation?
To increase total costs
To decrease total costs
To assign costs to different departments or products
To eliminate costs
14. Which term describes the reduction in per-unit cost as production volume increases?
Economies of Scale
Diseconomies of Scale
Fixed Cost Reduction
Variable Cost Reduction
15. What is a common method for pricing products based on the cost of production plus a markup?
Penetration Pricing
Skimming Pricing
Cost-Plus Pricing
Competitive Pricing
16. Which of the following is an indirect cost?
Direct Labor
Raw Materials
Factory Rent
Packaging Materials
17. What is the term for the cost savings achieved by producing a large quantity of a product?
Marginal Cost
Fixed Cost
Economies of Scale
Variable Cost
We recommend that you do not leave the page that you are taking this quiz in. Stay honest 🙂
