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 21 of 48
- A. 275 units
- B. 250 units
- C. 150 units
- D. 650 units
Explanation: The difference between actual input of 200 units and budgeted input of 50 units is 200 − 50 = 150 units, representing excess usage.
Correct answer: 150 units- A. revenue variance
- B. cost variance
- C. favorable variance
- D. unfavorable varianceCompare Credit Cards
Explanation: A decrease in operating income compared with the budget is unfavorable because the business earned less than planned.
Correct answer: unfavorable varianceCompare Credit Cards- A. standard price per input unit
- B. standard price per output unit
- C. standard cost per input unit
- D. standard cost per output unitHire An Accountant
Explanation: Dividing the standard cost per output unit by the standard input quantity required per output unit gives the standard price per input…
Correct answer: standard price per input unit- A. $15,000
- B. $13,000
- C. $11,000
- D. $9,000
Explanation: Price variance equals (actual price − standard price) × actual quantity: ($700 − $400) × 50 = $15,000.
Correct answer: $15,000- A. favorable variance
- B. unfavorable variance
- C. revenue variance
- D. cost varianceCompare Credit Cards
Explanation: Operating income above the budget is favorable because actual profitability exceeded the planned amount.
Correct answer: favorable variance- A. standard price
- B. input price
- C. actual input
- D. output price
Explanation: The standard price is the predetermined price or rate the company expects to pay for one unit of an input.
Correct answer: standard price- A. fixed manufacturing cost
- B. batch level cost
- C. per unit cost
- D. factory overall cost
Explanation: Material handling is commonly driven by the number of material movements or batches, so it is classified as a batch-level cost in…
Correct answer: batch level cost- A. actual result
- B. expected results
- C. expected cost
- D. expected revenue
Explanation: Static budget variance reconciles the planned operating income with the actual operating income.
Correct answer: actual result- A. lesser effective
- B. greater efficiency
- C. smaller efficiency
- D. greater effective
Explanation: Using fewer inputs to produce more output indicates that resources are being used more productively.
Correct answer: greater efficiency- A. static budget
- B. varied budget
- C. marketing budget
- D. methodological budgetAccounting & Auditing
Explanation: A master budget fixed at the output level planned at the beginning of the period is a static budget.
Correct answer: static budget- A. $4,000
- B. $6,000
- C. $8,000
- D. $10,000
Explanation: Price variance equals the price difference multiplied by the actual quantity: ($500 − $300) × 50 = $10,000.
Correct answer: $10,000- A. $120
- B. $50
- C. $110
- D. $30
Explanation: The difference between the actual and budgeted input prices is $70 − $40 = $30.
Correct answer: $30- A. positive cost variance
- B. negative cost variance
- C. flexible budget variance
- D. flexible cost variance
Explanation: Comparing actual cost with the cost allowed by the flexible budget measures the flexible-budget variance.
Correct answer: flexible budget variance- A. $4,500
- B. $3,500
- C. $2,500
- D. $1,500
Explanation: Efficiency variance is calculated as the standard input price multiplied by the difference between actual and allowed quantities: $50 ×…
Correct answer: $4,500- A. actual input quantity
- B. actual output quantity
- C. actual input price
- D. actual output priceAccess Government Careers
Explanation: The actual input quantity is found by combining the budgeted or standard input quantity with the efficiency difference.
Correct answer: actual input quantity- A. 275 units
- B. 125 units
- C. 550 units
- D. 650 units
Explanation: When actual input exceeds the budgeted input by 200 units, the budgeted quantity is 750 minus 200, or 550 units.
Correct answer: 550 units- A. variable growth of company
- B. constant growth of company
- C. company is inefficient
- D. company is efficient
Explanation: Using more input than the budget allows for the achieved output indicates inefficient resource use.
Correct answer: company is inefficient- A. revenue allocation
- B. revenue object
- C. revenue increment
- D. reciprocal revenue
Explanation: Revenue allocation assigns revenue to particular revenue objects when the revenue cannot be traced to them economically or…
Correct answer: revenue allocation- A. direct method
- B. step down
- C. reciprocal method
- D. all of aboveHire An Accountant
Explanation: Support-department costs may be allocated using the direct method, step-down method, or reciprocal method.
Correct answer: all of aboveHire An Accountant- A. indirect method
- B. direct method
- C. step down method
- D. reciprocal method
Explanation: The step-down method allocates a support department's cost to operating departments and may also allocate it to other support departments.
Correct answer: step down method