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 16 of 48
- A. production numerator level
- B. production denominator level
- C. production cost level
- D. production fixed levelFinance
Explanation: A fixed overhead rate is calculated using a budgeted denominator level of production, such as expected machine hours or units.
Correct answer: production denominator level- A. $67,500
- B. $57,500
- C. $47,500
- D. $37,500
Explanation: Using the question's intended calculation, budgeted fixed overhead is 250 output units × $150 per unit = $37,500.
Correct answer: $37,500303. The variance is solely because of the difference between budgeted quantity and the ___________?
- A. flexible hours
- B. actual cost
- C. actual quantity
- D. actual priceCompare Credit Cards
Explanation: A quantity or efficiency variance compares the budgeted quantity with the actual quantity used, while price variances concern differences…
Correct answer: actual quantity- A. variable overhead spending variance
- B. fixed overhead spending variance
- C. constant spending variance
- D. potential spending varianceHire An Accountant
Explanation: Variable overhead spending variance compares actual variable overhead with the flexible-budget variable overhead allowed for the actual…
Correct answer: variable overhead spending variance- A. variable setup costs
- B. fixed setup costs
- C. variable batch costs
- D. fixed batch costsCompare Credit Cards
Explanation: Supervisors' and engineers' salaries and equipment leasing do not normally change with the number of batches set up, so they are fixed…
Correct answer: fixed setup costs- A. $21,000
- B. $11,000
- C. $31,000
- D. $41,000
Explanation: Flexible-budget variance equals actual incurred cost minus flexible-budget cost.
Correct answer: $41,000- A. effectively measure
- B. lump sum measure
- C. non-financial measures
- D. financial measures
Explanation: Non-financial measures give focused feedback on individual operating aspects, such as quality, delivery time, or customer satisfaction.
Correct answer: non-financial measures- A. $10,000
- B. $1,000
- C. $7,000
- D. $4,000
Explanation: Fixed setup costs include all three listed amounts: $3,000 for engineers, $4,000 for supervisors, and $3,000 for equipment leasing.
Correct answer: $10,000- A. $142,500
- B. $112,500
- C. $122,500
- D. $132,500
Explanation: Budgeted fixed overhead based on the stated unit calculation is 450 output units × $250 = $112,500. This gives option b.
Correct answer: $112,500- A. $518,750
- B. $418,750
- C. $218,750
- D. $318,750
Explanation: The flexible-budget variance is the difference between actual incurred cost and the flexible-budget amount: $387,500 − $168,750 =…
Correct answer: $218,750- A. $16,500
- B. $15,500
- C. $14,500
- D. $13,500
Explanation: Production volume variance compares budgeted fixed overhead with fixed overhead applied to actual output.
Correct answer: $13,500- A. setup cost
- B. batch cost
- C. facility cost
- D. lump sum cost
Explanation: A setup cost is incurred when preparing a machine or production batch and may contain both fixed and variable elements in relation to…
Correct answer: setup cost- A. fixed setup cost
- B. total setup cost
- C. variable setup cost
- D. total overhead cost
Explanation: An unfavorable production volume variance indicates that actual production was below the denominator level, causing fixed overhead to be…
Correct answer: fixed setup cost- A. $218,750
- B. $238,750
- C. $258,750
- D. $268,750Standardized & Admissions Tests
Explanation: The flexible-budget variance is the difference between actual cost and the flexible-budget amount: $627,500 − $358,750 = $268,750.
Correct answer: $268,750Standardized & Admissions Tests315. The process of ensuring preventive measure to be done in all machines is classified as _________?
- A. potential price response
- B. potential cost response
- C. potential budget response
- D. potential management response
Explanation: Ensuring preventive maintenance or preventive measures across machines is a management action designed to prevent breakdowns and improve…
Correct answer: potential management response- A. potential cost response
- B. potential budget response
- C. potential management response
- D. potential price responseAccounting & Auditing
Explanation: Installing a production-scheduling procedure changes how management plans and controls plant operations.
Correct answer: potential management response- A. denominator level
- B. numerator level
- C. fixed level
- D. variable level
Explanation: The budgeted fixed-overhead rate is calculated using budgeted fixed overhead divided by the denominator activity level, such as budgeted…
Correct answer: denominator level- A. denominator level variance
- B. numerator level variance
- C. price level variance
- D. cost level variance
Explanation: Production volume variance arises because actual output differs from the denominator activity level used to set the fixed-overhead rate.
Correct answer: denominator level variance- A. $43,000
- B. $73,000
- C. $63,000
- D. $53,000
Explanation: The sales budget variance equals flexible-budget operating income minus static-budget operating income.
Correct answer: $73,000- A. $27,000
- B. $15,000
- C. $39,000
- D. $49,000Government
Explanation: Actual result is obtained by adding the flexible budget variance to the flexible budget amount: $27,000 + $12,000 = $39,000.
Correct answer: $39,000