32. Cost analysis

Take one word from the left-hand column and one from right to complete each of the following sentences.

financial	facilities
prime	analysis
functional	decisions
consumable	process
maximum	data
business	profit
arbitrary	materials
manufacturing	cost

1. Accountancy provides financial data which is used to make future business decisions.

2. In order to succeed, company managers try to make __________ __________ because this is where capital growth comes from.

3. Because accountants rely on estimates rather than ‘true costs’, they often have to make __________ __________ .

4. __________ __________ are used up in the manufacturing process but are not part of the final product.

5. All the direct costs of manufacturing are referred to as ____ _____ .

6. Overhead is the cost of providing __________ __________ which you need to produce goods.

7. The management accountant should understand the __________ __________ used to make a product in the factory.

8. Cost accounting uses __________ __________ which looks at where each transaction comes from.

Remember that words are often used in association with other words depending on the context. Try to note words which often go together. You could do this in spider diagrams similar to the idea in Test 45.

33. Cost ascertainment: word building

Use the words in bold at the end of each of the following sentences to form a word which fits in the blank space.

1.	It’s not always possible to calculate product costs of multiple products accurately .		accurate
2.	You need product costs to make a __________ between products.		compare
3.	Management may wish to expand the sales of the more __________ products.		profit
4.	Process costing looks at the __________ of costs in a department over a period of time.		accumulate
5.	Operating costing is the way of calculating the cost of the __________ of services.		provide
6.	Material losses which result from the nature of the operating method are usually not __________ .		avoid
7.	Losses caused by inefficient operations are __________ .		prevent
8.	The disposal of waste might incur __________ .		expend
9.	Some costs may be __________ by the sale of scrap.		recover
10.	Bookkeepers normally don’t make a __________ between scrap and waste.		distinct
11.	__________ may be possible on some products which fail quality control.		rectify
12.	In jobbing production there is usually no __________ in design from previous orders.		repeat

You can practise more word building in Tests 22 and 28 and 60.