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 18 of 48
- A. $10,000
- B. $20,000
- C. $40,000
- D. $60,000
Explanation: Operating income before tax must be grossed up from after-tax income: $36,000 ÷ (1 − 0.40) = $60,000.
Correct answer: $60,000- A. 4500 units
- B. 5500 units
- C. 8500 units
- D. 9500 units
Explanation: Margin of safety in units equals actual or expected sales units minus breakeven units: 7,000 − 1,500 = 5,500 units.
Correct answer: 5500 units- A. 32 bundle
- B. 22 bundle
- C. 42 bundle
- D. 38 bundle
Explanation: Breakeven bundles are found by dividing breakeven revenue by revenue per bundle: $220,000 ÷ $10,000 = 22 bundles.
Correct answer: 22 bundle- A. $12,000
- B. $6,000
- C. −$6000
- D. −$12000
Explanation: Contribution margin equals revenue minus variable cost, so variable costs are $9,000 − $3,000 = $6,000.
Correct answer: $6,000- A. 32.75%
- B. 43.75%
- C. 53%
- D. 22%
Explanation: Margin of safety percentage equals margin of safety divided by budgeted revenue: $35,000 ÷ $80,000 × 100 = 43.75%.
Correct answer: 43.75%- A. degree of operating leverage
- B. degree of change
- C. degree of change in margin
- D. degree of change in income
Explanation: The contribution margin divided by operating income measures the degree of operating leverage, showing how strongly operating income…
Correct answer: degree of operating leverage- A. PV graph
- B. CV graph
- C. SO graph
- D. QI graph
Explanation: A profit-volume graph shows how changes in sales quantity affect operating income.
Correct answer: PV graph- A. $113,043.48
- B. $1,200,000
- C. $130,000
- D. $140,000
Explanation: Breakeven revenue equals fixed cost divided by contribution margin percentage: $65,000 ÷ 0.575 = $113,043.48.
Correct answer: $113,043.48- A. −$85000
- B. −$35000
- C. $85,000
- D. $35,000
Explanation: Variable costs equal revenue minus contribution margin: $60,000 − $25,000 = $35,000.
Correct answer: $35,000- A. 8
- B. 7
- C. 6
- D. 5
Explanation: Degree of operating leverage equals contribution margin divided by operating income: $72,000 ÷ $12,000 = 6.
Correct answer: 6- A. 52 bundles
- B. 48 bundles
- C. 45 bundles
- D. 30 bundles
Explanation: Breakeven bundles equal breakeven revenue divided by revenue per bundle: $360,000 ÷ $12,000 = 30 bundles.
Correct answer: 30 bundles- A. 55.56%
- B. 25.50%
- C. 28%
- D. 45.00%
Explanation: Margin of safety percentage is calculated as margin of safety divided by budgeted revenue, multiplied by 100: $25,000 ÷ $45,000 × 100 =…
Correct answer: 55.56%- A. revenue - all variable cost
- B. revenue + all variable cost
- C. cost + revenue
- D. revenue - breakeven units
Explanation: Contribution margin is the amount remaining from revenue after deducting all variable costs, so it is revenue minus all variable cost.
Correct answer: revenue - all variable cost- A. events
- B. distribution
- C. outcome
- D. actions
Explanation: An event is an occurrence that may happen at a future or specified time.
Correct answer: events- A. $12,000
- B. $14,000
- C. $15,000
- D. $16,000
Explanation: Margin of safety is budgeted revenue minus breakeven revenue: $50,000 − $35,000 = $15,000.
Correct answer: $15,000- A. 55 units
- B. 45 units
- C. 35 units
- D. 25 units
Explanation: Required units equal fixed cost plus target operating income, divided by contribution margin per unit: ($20,000 + $10,000) ÷ $1,200 = 25…
Correct answer: 25 units- A. $10,000
- B. $12,000
- C. $16,000
- D. $14,000
Explanation: With a 40% tax rate, net income is 60% of operating income, so target operating income is $9,600 ÷ 0.60 = $16,000.
Correct answer: $16,000- A. contribution
- B. certainty
- C. uncertainty
- D. margin
Explanation: Uncertainty exists when the actual amount may deviate from the expected amount.
Correct answer: uncertainty- A. expected value
- B. expected decision value
- C. expected outcome value
- D. expected monetary value
Explanation: Expected monetary value is the probability-weighted monetary value of possible outcomes, calculated by multiplying each outcome by its…
Correct answer: expected monetary value- A. sales mix
- B. product mix
- C. unit mix
- D. quantity mix
Explanation: Sales mix is the relative quantity or proportion of different products included in a company’s total sales.
Correct answer: sales mix