All Free Accounting MCQs with Answers
Every Accounting question in the bank, across all chapters, each with the correct answer and a written explanation. Free and unlimited, with no account needed.
1,971 questions · page 67 of 99
- A. profit point
- B. breakeven point
- C. production point
- D. cost point
Explanation: The break-even point is determined by fixed operating and manufacturing costs divided by contribution margin per unit.
Correct answer: breakeven point- A. indirect labor
- B. capacity
- C. raw material
- D. direct labor
Explanation: The capacity cost rate expresses budgeted fixed manufacturing cost per unit of capacity supplied, making capacity the relevant concept.
Correct answer: capacity- A. allocation approach
- B. unadjusted approach
- C. proration approach
- D. adjusted approach
Explanation: Proration spreads underapplied or overapplied overhead among ending work in process, finished goods, and cost of goods sold balances.
Correct answer: proration approach- A. master budget capacity utilization
- B. finite cost utilization
- C. infinite cost utilization
- D. infinite budget capacity utilization
Explanation: Master budget capacity utilization is the expected capacity level needed to meet the average customer demand during the budget period.
Correct answer: master budget capacity utilization- A. unadjusted cost approach
- B. adjusted allocation rate approach
- C. unadjusted allocation approach
- D. adjusted cost approach
Explanation: The adjusted allocation-rate approach restates ledger amounts using actual cost-allocation rates.
Correct answer: adjusted allocation rate approach- A. capacity used
- B. capacity available
- C. capacity utilization
- D. downward demand
Explanation: A fixed allocation rate is calculated using the capacity level selected as the denominator, commonly the available or practical capacity.
Correct answer: capacity available- A. 65 units
- B. 75 units
- C. 95 units
- D. 85 units
Explanation: Required units equal target operating income divided by contribution margin per unit: $38,000 ÷ $400 = 95 units.
Correct answer: 95 units- A. higher income
- B. zero dividends
- C. negative income value
- D. lower income
Explanation: When production is below sales, inventory falls and absorption costing releases previously deferred fixed manufacturing overhead, making…
Correct answer: lower income- A. write off variance approach
- B. write in variance approach
- C. adjusted variance approach
- D. unadjusted variance approach
Explanation: Under the write-off variance approach, the production-volume variance is written off rather than allocated among inventory accounts.
Correct answer: write off variance approach- A. unit level of production
- B. unit level of sales
- C. chosen denominator level
- D. all of above
Explanation: Under absorption costing, operating income can be affected by production volume, sales volume, and the denominator level used to assign…
Correct answer: all of above- A. quantity of units sold
- B. quantity of units manufactured
- C. increase in units sold
- D. decrease in units sold
Explanation: With variable costing, fixed manufacturing overhead is expensed in the current period, so operating income changes with units sold and…
Correct answer: quantity of units sold- A. present period
- B. future period
- C. yearly period
- D. monthly period
Explanation: Absorption costing includes fixed manufacturing overhead in inventory, so that cost is deferred until the inventory is sold in a future…
Correct answer: future period1333. If the production is greater than sales, then operating income under variable costing is _________?
- A. negative income value
- B. lower income
- C. higher income
- D. zero dividends
Explanation: When production exceeds sales, absorption costing carries some fixed manufacturing overhead in ending inventory, while variable costing…
Correct answer: lower income- A. recording of liabilities
- B. costing of current assets
- C. costing of machinery
- D. costing of inventories
Explanation: Variable and absorption costing determine which manufacturing costs are included in the cost of inventory.
Correct answer: costing of inventories- A. $4,000
- B. $2,500
- C. $1,000
- D. $15,000
Explanation: Contribution margin per unit equals selling price minus all variable costs: $2,500 − $1,000 − $500 = $1,000.
Correct answer: $1,000- A. $40,000
- B. $60,000
- C. $70,000
- D. $50,000
Explanation: Using the stated per-unit cost, total budgeted manufacturing cost is $200 × 350 units = $70,000.
Correct answer: $70,000- A. $315,000
- B. $415,000
- C. $615,000
- D. $515,000
Explanation: The change in operating income equals contribution margin per unit multiplied by the change in units sold: $12,300 × 50 = $615,000.
Correct answer: $615,000- A. fixed margin per unit
- B. variable margin per unit
- C. contribution margin per batch
- D. contribution margin per unit
Explanation: Subtracting variable manufacturing and variable marketing costs from selling price leaves the contribution margin generated by one unit.
Correct answer: contribution margin per unit- A. $1,250
- B. $1,350
- C. $1,450
- D. $1,550
Explanation: Budgeted production units equal total budgeted fixed manufacturing cost divided by the stated per-unit cost: $150,000 ÷ $120 = 1,250…
Correct answer: $1,250- A. higher income
- B. zero dividends
- C. negative income value
- D. lower income
Explanation: With production greater than sales, absorption costing defers part of fixed manufacturing overhead in ending inventory.
Correct answer: higher income