Free Cost Accounting MCQs with Answers
941 Cost Accounting MCQs from Accounting, each with the correct answer and a written explanation of why it is correct. Free and unlimited, with no account needed.
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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941 questions · page 11 of 48
201. The systematic way of linking group of indirect cost to a cost object is classified as ___________?
- A. linked allocation base
- B. direct allocation base
- C. indirect allocation base
- D. cost allocation base
Explanation: A cost allocation base is the measure used to systematically assign a pool of indirect costs to a cost object, such as labor hours or…
Correct answer: cost allocation base- A. manufacturing overhead allocated
- B. cost overhead applied
- C. manufacturing overhead applied
- D. both A and C
Explanation: Manufacturing overhead assigned to jobs is commonly called manufacturing overhead applied, and it is also described as allocated…
Correct answer: both A and C- A. $138 per labor hour
- B. $137.27 per hour
- C. $140 per labor hour
- D. $142 per labor hour
Explanation: The direct labor cost rate equals budgeted direct labor cost divided by budgeted labor hours: $755,000 ÷ 5,500 = $137.27 per hour.
Correct answer: $137.27 per hour- A. $126.32 per labor hour
- B. $128.32 per labor hour
- C. $130 per labor hour
- D. $132 per labor hour
Explanation: Divide the budgeted direct labor cost by the budgeted hours: $480,000 ÷ 3,800 = $126.32 per labor hour. This gives option a.
Correct answer: $126.32 per labor hour- A. selling time record
- B. labor time record
- C. buying time record
- D. direct time record
Explanation: A labor time record documents the time employees spend on particular jobs and departments, supporting the assignment of direct labor…
Correct answer: labor time record- A. $1500 per machine hour
- B. $250 per machine hour
- C. $500 per machine hour
- D. $1000 per machine hour
Explanation: The allocation rate is calculated as total overhead divided by machine hours: $500,000 ÷ 1,000 = $500 per machine hour.
Correct answer: $500 per machine hour- A. $4,730,000
- B. $3,730,000
- C. $2,730,000
- D. $1,730,000Government & Public Sector Jobs
Explanation: Total direct labor cost equals labor hours multiplied by the cost per hour: 4,550 × $600 = $2,730,000.
Correct answer: $2,730,000208. The process of assigning the direct or indirect cost to any cost object is known as ____________?
- A. cost assignment
- B. cost expectation
- C. event assignment
- D. probability assignment
Explanation: Cost assignment is the process of attaching a direct or indirect cost to a cost object, such as a product, service, department, or…
Correct answer: cost assignment- A. unadjusted allocation rate approach
- B. adjusted budget rate approach
- C. unadjusted budget rate approach
- D. adjusted allocation rate approachFinance
Explanation: The adjusted allocation rate approach combines normal costing's systematic allocation with the use of actual manufacturing overhead…
Correct answer: adjusted allocation rate approachFinance- A. actual manufacturing overhead rate
- B. manufacturing overhead costs
- C. overhead rate
- D. direct rate
Explanation: Dividing the indirect cost pool by the actual quantity of the allocation base gives the actual manufacturing overhead rate.
Correct answer: actual manufacturing overhead rate- A. under applied indirect cost
- B. under absorbed indirect cost
- C. absorbed indirect cost
- D. both a and bAccounting & Auditing
Explanation: An underallocated indirect cost means that the amount applied to products was less than the actual indirect cost incurred.
Correct answer: both a and bAccounting & Auditing- A. 15.67 per piece
- B. 16.67 per piece
- C. 14.67 per piece
- D. 13.67 per piece
Explanation: The budgeted indirect cost rate is calculated as budgeted indirect cost divided by the budgeted allocation base: $60,000 ÷ 3,600 = $16.67…
Correct answer: 16.67 per piece213. The budgeted direct labor hours are multiplied to direct labor cost rate, to calculate ____________?
- A. expected total direct labor cost
- B. budgeted total direct labor cost
- C. budgeted total indirect labor cost
- D. expected labor hours
Explanation: Multiplying budgeted direct labor hours by the direct labor cost rate estimates the total direct labor cost planned for the period.
Correct answer: budgeted total direct labor cost- A. budgeted indirect labor cost rate
- B. expected direct labor cost rate
- C. budgeted direct labor cost rate
- D. expected indirect labor cost rate
Explanation: Dividing budgeted total direct labor cost by budgeted direct labor hours produces the budgeted direct labor cost rate per hour.
Correct answer: budgeted direct labor cost rate- A. applied indirect cost
- B. applied direct cost
- C. incurred indirect cost
- D. over allocated indirect cost
Explanation: Allocated overhead of $1,500 exceeds the actual incurred overhead of $1,200 by $300, so the overhead is overallocated.
Correct answer: over allocated indirect cost- A. expected indirect cost rate
- B. expected direct cost rate
- C. budgeted indirect cost rate
- D. budgeted direct cost rateSearch Public Records
Explanation: Dividing budgeted indirect costs by the budgeted quantity of the allocation base gives the budgeted indirect cost rate.
Correct answer: budgeted indirect cost rate- A. sale costing system
- B. job costing system
- C. price costing system
- D. process costing system
Explanation: Process costing accumulates the total cost of similar or homogeneous products and divides it by units produced to obtain an average unit…
Correct answer: process costing system- A. proration approach
- B. appreciation approach
- C. depreciation approach
- D. adjusted approachCompare Credit Cards
Explanation: Proration distributes underallocated or overallocated overhead among work in process, finished goods, and cost of goods sold.
Correct answer: proration approach- A. unadjusted budget rate approach
- B. adjusted allocation rate approach
- C. unadjusted allocation rate approach
- D. adjusted budget rate approach
Explanation: Restating overhead entries using actual rates instead of budgeted rates is the adjusted allocation rate approach.
Correct answer: adjusted allocation rate approach- A. manufacturing overhead applied
- B. labor overhead applied
- C. cost overhead applied
- D. budget overhead appliedGet Executive Coaching
Explanation: In normal costing, manufacturing overhead is assigned to products using a predetermined overhead rate, so it is called manufacturing…
Correct answer: manufacturing overhead applied