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 20 of 48
- A. $409,000
- B. $109,000
- C. $209,000
- D. $309,000
Explanation: Flexible budget variance is the difference between actual cost and flexible-budget cost: $265,000 − $156,000 = $109,000.
Correct answer: $109,000- A. direct variance
- B. rate variance
- C. labor variance
- D. manufacturing variance
Explanation: For direct manufacturing labor, the price variance measures the difference between the actual and standard hourly wage rate.
Correct answer: rate variance- A. $400,000
- B. $500,000
- C. $100,000
- D. $600,000Try Statistical Software
Explanation: Static budget variance equals the actual result minus the static-budget amount: $250,000 − $150,000 = $100,000.
Correct answer: $100,000- A. correspondent budget
- B. full budget variance
- C. methodology variance
- D. static budget variance
Explanation: Static budget variance is the difference between the actual result and the corresponding amount in the original static budget.
Correct answer: static budget variance- A. actual quantity manufactured
- B. budgeted quantity manufactures
- C. budgeted quantity sold
- D. budgeted input quantity
Explanation: When efficiency variance is expressed in input-quantity terms, subtracting it from actual input gives the standard or budgeted input…
Correct answer: budgeted input quantity- A. flexible budget cost
- B. flexible investment cost
- C. static budget cost
- D. static variable cost
Explanation: Flexible budget variance reconciles actual cost with the cost allowed for the actual activity level, so subtracting it from actual cost…
Correct answer: flexible budget cost- A. efficiency
- B. effectiveness
- C. growth evaluation
- D. performance evaluationAccounting & Auditing
Explanation: Efficiency measures how much input was used to achieve a specified output, usually by comparing actual input with the standard input…
Correct answer: efficiency- A. functioning
- B. variance
- C. variation
- D. deviation
Explanation: Variance analysis links management planning with control by comparing actual results with planned or standard results.
Correct answer: variance- A. static budget receipts
- B. static budget deviation
- C. static budget variance
- D. multiple budget variance
Explanation: The difference between actual results and the static budget amount is the static budget variance.
Correct answer: static budget variance- A. $23,800
- B. $11,200
- C. $12,200
- D. $13,200
Explanation: Efficiency variance is calculated as (standard quantity allowed minus actual quantity) multiplied by the standard price: (90 − 250) × $70…
Correct answer: $11,200- A. control variance
- B. uncontrolled variance
- C. usage variance
- D. effective variance
Explanation: Efficiency variance measures the cost effect of using more or fewer input units than the standard quantity allowed, so it is also called…
Correct answer: usage variance- A. understand variance reason
- B. improve future performance
- C. learning of improvement
- D. all of above
Explanation: Variance analysis identifies the reasons for deviations, helps management improve future performance, and supports organisational…
Correct answer: all of above- A. price variance is favorable
- B. price variance is unfavorable
- C. cost variance is favorable
- D. cost variance is unfavorable
Explanation: Paying less than the standard or budgeted material price creates a favorable price variance.
Correct answer: price variance is favorable- A. marketing budget
- B. methodological budget
- C. static budget
- D. varied budget
Explanation: A static budget is prepared for one predetermined level of activity or output and does not change when actual output changes.
Correct answer: static budget- A. 300 units
- B. 700 units
- C. 800 units
- D. 500 units
Explanation: Treating the stated efficiency variance as the excess of actual input over budgeted input, the budgeted quantity is 500 − 200 = 300 units.
Correct answer: 300 units396. The difference between actual input variance and the budgeted input variance is called __________?
- A. price variance
- B. actual output price
- C. budgeted output price
- D. actual selling priceHire An Accountant
Explanation: Price variance measures the difference between the actual input price and the budgeted or standard input price, usually multiplied by the…
Correct answer: price variance- A. activity based costing
- B. improved costing
- C. learned improvements
- D. positive effectiveness
Explanation: Activity-based costing treats activities as cost objects and assigns costs according to the resources those activities consume.
Correct answer: activity based costing- A. revenue planning
- B. actual results
- C. marketing results
- D. cost planning
Explanation: A variance is the difference between an expected or standard amount and the actual result achieved.
Correct answer: actual results- A. output unit
- B. input unit
- C. standard input
- D. standard output
Explanation: Standard input is the quantity of input predetermined as necessary to produce a specified level of output under expected operating…
Correct answer: standard input- A. growth evaluation
- B. performance evaluation
- C. efficiency
- D. effectiveness
Explanation: Effectiveness measures the extent to which predetermined targets or objectives are achieved, including an income target.
Correct answer: effectiveness