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 19 of 48
- A. sales margin
- B. cost margin
- C. Gross margin
- D. income margin
Explanation: Gross margin is the excess of selling revenue over the cost of goods sold, representing the amount earned above the product’s acquisition…
Correct answer: Gross margin- A. 10%
- B. 15%
- C. 25%
- D. 35%Compare Credit Cards
Explanation: Contribution margin percentage equals contribution margin divided by revenue: $4,000 ÷ $16,000 = 0.25, or 25%.
Correct answer: 25%- A. 23.08%
- B. 24.08%
- C. 25.08%
- D. 26.08%
Explanation: Gross margin percentage is calculated as gross margin divided by total revenue: $6,000 ÷ $26,000 × 100 = 23.08%.
Correct answer: 23.08%- A. −$17000
- B. $17,000
- C. $5,000
- D. −$5000
Explanation: Contribution margin equals revenue minus total variable cost, so $11,000 − $6,000 = $5,000.
Correct answer: $5,000- A. target net cost
- B. target net income
- C. target net gain
- D. target net lossCompare Credit Cards
Explanation: Tax on target operating income is deducted from that operating income to obtain target net income: operating income minus income tax…
Correct answer: target net income- A. uncertain margin
- B. certain margin
- C. operating margin
- D. operating leverage
Explanation: Operating leverage describes how fixed operating costs magnify changes in operating income when sales change.
Correct answer: operating leverage- A. 62
- B. 38
- C. 48
- D. 58
Explanation: Margin of safety in units equals budgeted sales units minus breakeven sales units: 50 − 12 = 38 units.
Correct answer: 38- A. event table
- B. outcome table
- C. decision table
- D. probability table
Explanation: A decision table lists alternative decisions or outcomes together with possible events and their probabilities, helping compare expected…
Correct answer: decision table- A. 4.84
- B. 2.84
- C. 3.84
- D. 5.84
Explanation: The degree of operating leverage is contribution margin divided by operating income: $34,000 ÷ $12,000 = 2.83, rounded to 2.84.
Correct answer: 2.84- A. quantity of units required to sold
- B. selling of units
- C. sold units
- D. contributed units
Explanation: Required unit sales are calculated as (fixed cost + target operating income) ÷ contribution margin per unit.
Correct answer: quantity of units required to sold- A. mutual distribution
- B. probability distribution
- C. collective distribution
- D. marginal distribution
Explanation: A probability distribution assigns probabilities to possible outcomes, whose events are normally mutually exclusive and collectively…
Correct answer: probability distribution- A. 45 units
- B. 30 units
- C. 20 units
- D. 52 units
Explanation: Required units equal (fixed cost + target operating income) ÷ contribution margin per unit: ($10,000 + $8,000) ÷ $900 = 20 units.
Correct answer: 20 units- A. 33.34%
- B. 43.34%
- C. 23%
- D. 25%
Explanation: The contribution margin ratio is fixed costs divided by break-even revenue: $15,000 ÷ $45,000 = 33.33%, which rounds to 33.34%.
Correct answer: 33.34%- A. margin of safety
- B. margin of profit
- C. margin of loss
- D. margin of income
Explanation: Margin of safety is the excess of actual or expected revenue over break-even revenue.
Correct answer: margin of safety- A. $35,000
- B. $13,000
- C. $5,000
- D. $10,000
Explanation: Margin of safety equals budgeted revenue minus break-even revenue: $20,000 − $15,000 = $5,000.
Correct answer: $5,000- A. initial offering cost
- B. batch marketing cost
- C. product marketing cost
- D. product design cost
Explanation: Product-sustaining costs support an entire product line, regardless of the number of batches or units produced; product design is an…
Correct answer: product design cost- A. cost variance is favorable
- B. cost variance is unfavorable
- C. price variance is favorable
- D. price variance is unfavorable
Explanation: When actual material price is below the budgeted price, the price variance reduces cost and is favorable.
Correct answer: price variance is favorable- A. price requirements
- B. supply requirements
- C. budgeted performance
- D. demand requirements
Explanation: Budgeted performance is the expected level of performance established in advance through the budgeting process.
Correct answer: budgeted performance- A. less than zero
- B. equal to zero
- C. favorable
- D. unfavorable
Explanation: Labor price variance compares the actual labor rate with the budgeted rate.
Correct answer: unfavorable- A. focused performance
- B. merchandise performance
- C. distribution performance
- D. expected performanceHire Grant Writers
Explanation: Management control compares actual performance with expected performance, such as a budget, standard, or target.
Correct answer: expected performanceHire Grant Writers