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 14 of 48
- A. $40
- B. $20
- C. $60
- D. $80
Explanation: Per-unit manufacturing cost is calculated as total manufacturing cost divided by units manufactured: $60,000 ÷ 3,000 = $20 per unit.
Correct answer: $20- A. manufacturing sector companies
- B. merchandising sector companies
- C. service sector companies
- D. raw material companies
Explanation: An industry made up of businesses that provide services is the service sector.
Correct answer: service sector companies- A. service sector companies
- B. raw material companies
- C. manufacturing sector companies
- D. merchandising sector companies
Explanation: Merchandising companies purchase finished goods and resell them in the market without substantially changing them.
Correct answer: merchandising sector companies- A. finished goods inventory
- B. indirect material inventory
- C. direct materials inventory
- D. work in process inventory
Explanation: Direct materials inventory consists of raw materials held for use in manufacturing and traceable to the finished product.
Correct answer: direct materials inventory- A. per unit cost
- B. total cost
- C. total indirect cost
- D. total effective costCompare Credit Cards
Explanation: Per-unit cost is found by dividing total manufacturing cost by the number of units manufactured.
Correct answer: per unit cost- A. direct materials inventory
- B. work in process inventory
- C. finished goods inventory
- D. indirect material inventory
Explanation: Manufacturing cost accounting normally identifies direct materials, work in process, and finished goods as the three main inventory…
Correct answer: indirect material inventory- A. priced budget
- B. exceeding budget
- C. fixed budget
- D. variable budget
Explanation: An excessively tight machine-time standard allows too little time for the work, so actual machine time can exceed the budgeted standard.
Correct answer: exceeding budget- A. $660,500
- B. $560,500
- C. $460,500
- D. $360,500
Explanation: Variable overhead spending variance is calculated as actual quantity multiplied by the difference between the actual and budgeted…
Correct answer: $360,500- A. choose the budgeting period
- B. select allocation bases
- C. identify variable overhead cost
- D. compute the per unit rateFinance
Explanation: The budgeting process begins by choosing the period for which the variable overhead will be estimated.
Correct answer: choose the budgeting period- A. $34,000
- B. $24,000
- C. $16,000
- D. $18,000
Explanation: Production volume variance is the difference between budgeted fixed overhead and fixed overhead applied to actual output.
Correct answer: $34,000- A. potential budget response
- B. potential management response
- C. potential price response
- D. potential cost responseAccounting & Auditing
Explanation: Fundamental or ideal standards require extensive analysis and resources to establish realistic benchmarks.
Correct answer: potential management response- A. incurred manufacturing
- B. incurred production cost
- C. actual incurred cost
- D. incurred labor cost
Explanation: A flexible-budget variance measures the difference between actual cost and the flexible-budget amount.
Correct answer: actual incurred cost- A. $38,500
- B. $48,500
- C. $58,500
- D. $13,500
Explanation: Actual incurred cost equals the flexible-budget amount plus the fixed-overhead flexible-budget variance: $26,000 + $12,500 = $38,500.
Correct answer: $38,500- A. $57.21 per unit
- B. $67.21 per unit
- C. $77.21 per unit
- D. $87.21 per unit
Explanation: Budgeted fixed overhead per unit is found by dividing total budgeted fixed overhead by budgeted output: $385,000 ÷ 6,730 = approximately…
Correct answer: $57.21 per unit- A. actual cost incurred
- B. fixed cost incurred
- C. variable cost incurred
- D. manufacturing cost incurredFinance
Explanation: The variable-overhead flexible-budget variance reconciles the flexible-budget amount with the actual variable overhead incurred.
Correct answer: actual cost incurred- A. $20,000
- B. $34,000
- C. $44,000
- D. $35,000
Explanation: Total setup cost combines fixed and variable setup costs: $32,000 + $12,000 = $44,000.
Correct answer: $44,000- A. $43,000
- B. $42,000
- C. $29,000
- D. $19,000Government
Explanation: Production volume variance is the difference between budgeted fixed overhead and fixed overhead applied to actual output.
Correct answer: $43,000- A. fixed overhead efficiency variance
- B. variable overhead efficiency variance
- C. variable overhead manufacturing variance
- D. fixed overhead manufacturing variance
Explanation: A difference between actual and budgeted quantities of the allocation base measures efficiency in using that base.
Correct answer: variable overhead efficiency variance- A. unchanged price
- B. unchanged cost
- C. fixed overhead cost
- D. variable overhead costFinance
Explanation: A fixed overhead cost remains constant in total within the relevant activity range, even when production volume changes.
Correct answer: fixed overhead cost- A. choose the budgeting period
- B. select allocation bases
- C. identify variable overhead cost
- D. compute the per unit rate
Explanation: After choosing the budgeting period and allocation base, the next step is to identify the variable overhead costs.
Correct answer: identify variable overhead cost