All Free Accounting MCQs with Answers
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1,971 questions · page 69 of 99
- A. indirect manufacturing overhead cost
- B. direct manufacturing overhead cost
- C. fixed manufacturing overhead cost
- D. variable manufacturing overhead cost
Explanation: Normal costing applies the actual quantity of the allocation base to the budgeted fixed-overhead rate.
Correct answer: fixed manufacturing overhead cost- A. 3500 units
- B. 2500 units
- C. 3900 units
- D. 4900 units
Explanation: The budgeted denominator level is calculated as budgeted fixed cost divided by the fixed cost rate per unit: $40,000 ÷ $16 = 2,500 units.
Correct answer: 2500 units- A. $27,100
- B. $37,100
- C. $10,200
- D. $12,200
Explanation: Throughput contribution equals revenue minus direct material cost, the only cost treated as totally variable in throughput accounting.
Correct answer: $27,100- A. normal capacity utilization
- B. abnormal capacity utilization
- C. standard capacity utilization
- D. infinite capacity utilization
Explanation: Normal capacity utilization represents an average level of activity expected over a relevant period, usually allowing for ordinary…
Correct answer: normal capacity utilization- A. indirect manufacturing overhead cost
- B. direct manufacturing overhead cost
- C. fixed manufacturing overhead cost
- D. variable manufacturing overhead cost
Explanation: Standard quantity of the allocation base allowed for actual output, multiplied by the standard variable-overhead rate, gives applied…
Correct answer: variable manufacturing overhead cost- A. accrual contribution
- B. indirect contribution
- C. throughput contribution
- D. direct contribution
Explanation: Throughput contribution is calculated by subtracting direct material cost from revenue, because direct material is treated as the only…
Correct answer: throughput contribution- A. absorption costing
- B. variable costing
- C. fixed costing
- D. manufacturing cost
Explanation: Absorption costing treats both variable and fixed manufacturing costs as product costs and includes them in inventory until the goods are…
Correct answer: absorption costing- A. direct overhead
- B. indirect overhead cost
- C. fixed manufacturing cost
- D. variable manufacturing cost
Explanation: The key difference is the treatment of fixed manufacturing overhead: absorption costing assigns it to inventory, whereas variable costing…
Correct answer: fixed manufacturing cost- A. manufacturing in period
- B. expenses of period
- C. incurred in period
- D. accrual in period
Explanation: Period costs are not attached to units of inventory; they are charged as expenses in the period in which they are incurred.
Correct answer: expenses of period- A. $57,000
- B. $37,000
- C. $47,000
- D. $13,000
Explanation: Throughput contribution equals sales revenue minus direct material cost, so direct material cost is $25,000 − $12,000 = $13,000.
Correct answer: $13,000- A. for short run
- B. for long run
- C. for one day
- D. for few days
Explanation: Holding capacity utilization and its cost constant is a short-run assumption because capacity cannot normally be changed immediately.
Correct answer: for short run- A. more
- B. less
- C. zero
- D. none of above
Explanation: When inventory decreases, absorption costing releases fixed manufacturing overhead from inventory, reducing its income relative to…
Correct answer: more- A. $50
- B. $30
- C. $20
- D. $40
Explanation: The budgeted fixed overhead rate is calculated by dividing budgeted fixed cost by the denominator activity level: $26,000 ÷ 1,300 units =…
Correct answer: $20- A. unplanned level
- B. budgeting level
- C. numerator level
- D. denominator level
Explanation: The fixed manufacturing overhead rate uses budgeted fixed cost divided by the denominator level, such as normal or practical capacity.
Correct answer: denominator level1375. The throughput contribution is added into direct material cost of goods sold to calculate _________?
- A. indirect material
- B. revenues
- C. expenses
- D. direct material
Explanation: Throughput contribution equals revenue minus direct material cost, so adding it to direct material cost of goods sold reconstructs…
Correct answer: revenues- A. −$13500
- B. $4,500
- C. −$4500
- D. $13,500
Explanation: Contribution margin is revenue minus variable cost, so $9,000 − $4,500 = $4,500.
Correct answer: $4,500- A. upper limit
- B. lower limit
- C. zero limit
- D. minimal cost
Explanation: Capacity represents the maximum output or operating level that an organization can achieve under specified conditions, making it an upper…
Correct answer: upper limit1378. The difference between master budget capacity and practical capacity is considered as ________?
- A. normal used capacity
- B. unplanned and unused capacity
- C. planned unused capacity
- D. unplanned used capacity
Explanation: Practical capacity exceeds the activity planned in the master budget; their difference is the capacity deliberately left unused in the…
Correct answer: planned unused capacity- A. $50
- B. $45
- C. $55
- D. $40
Explanation: The fixed overhead rate per denominator-level unit is calculated as $48,000 ÷ 1,200 units = $40 per unit.
Correct answer: $40- A. $2.5 per unit
- B. $1.5 per unit
- C. $3.5 per unit
- D. $5.5 per unit
Explanation: The change in units sold equals the change in operating income divided by contribution margin per unit: $9,000 ÷ $6,000 = 1.5 units.
Correct answer: $1.5 per unit