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 22 of 48
- A. indirect method
- B. direct method
- C. step down method
- D. reciprocal method
Explanation: The reciprocal method recognizes all mutual services exchanged among support departments before allocating their costs to operating…
Correct answer: reciprocal method- A. Third incremental party
- B. second incremental party
- C. primary party
- D. First incremental party
Explanation: In the incremental allocation method, the party ranked first is the primary party, while later parties are called incremental parties.
Correct answer: primary party- A. $90 per hour
- B. less than $90 per hour
- C. greater than $90 per hour
- D. none of aboveCompare Credit Cards
Explanation: Under the single-rate method, both fixed and variable support costs are combined into one rate, so Division B is charged the same $90 per…
Correct answer: $90 per hour- A. sales mix allocation method
- B. dual-rate cost-allocation method
- C. single rate cost allocation method
- D. quantity variance allocation methodHire An Accountant
Explanation: The single-rate cost-allocation method combines fixed and variable support costs into one pool and applies one rate.
Correct answer: single rate cost allocation method- A. revenue allocation
- B. revenue object
- C. revenue increment
- D. reciprocal revenueTrack Stock Earnings
Explanation: A revenue object is the particular product, service, or other item for which revenue must be measured or allocated.
Correct answer: revenue object- A. step down allocation method
- B. stand-alone revenue allocation method
- C. incremental revenue allocation method
- D. revenue mix allocation methodCompare Credit Cards
Explanation: The stand-alone revenue allocation method uses each product's specific stand-alone revenue or selling-price information as the weight for…
Correct answer: stand-alone revenue allocation method- A. First incremental user
- B. primary user
- C. secondary user
- D. second incremental user
Explanation: In incremental cost allocation, the cost object user ranked first is the primary user.
Correct answer: primary user- A. First incremental user
- B. primary user
- C. secondary user
- D. second incremental user
Explanation: The ranking sequence is primary user first, first incremental user second, and second incremental user third.
Correct answer: second incremental user429. The first ranked product, in incremental revenue allocation method, is classified as ___________?
- A. primary product
- B. First incremental product
- C. Second incremental product
- D. Third incremental product
Explanation: The product ranked first in the incremental revenue allocation method is the primary product.
Correct answer: primary product- A. sales mix allocation method
- B. dual-rate cost-allocation method
- C. single rate cost allocation method
- D. quantity variance allocation methodCompare Credit Cards
Explanation: The dual-rate cost-allocation method creates separate fixed-cost and variable-cost pools, applying an appropriate rate to each.
Correct answer: dual-rate cost-allocation method- A. selling prices as weights
- B. unit costs as weights
- C. physical units as weights
- D. all of above
Explanation: The stand-alone method can use several measures of each user's independent share, including selling price, unit cost, or physical units.
Correct answer: all of above- A. complete reciprocal costs
- B. artificial costs
- C. operating costs
- D. flexible operating costs
Explanation: Complete reciprocal costs include the support department's own costs together with costs allocated from other departments, including…
Correct answer: complete reciprocal costs- A. bundled cost
- B. common cost
- C. stand-alone cost
- D. incremental costTrack Stock Earnings
Explanation: A common cost arises from a facility, activity, or resource used by two or more users, so it must be allocated among them.
Correct answer: common cost- A. revenue increment
- B. reciprocal revenue
- C. revenue allocation
- D. revenue object
Explanation: A revenue object is the product, division, customer, or other unit for which revenue is measured or allocated.
Correct answer: revenue object- A. bundled products allocation method
- B. variable cost allocation method
- C. stand-alone cost allocation method
- D. incremental cost allocation method
Explanation: The incremental cost allocation method ranks users by responsibility for the cost and allocates it in that order.
Correct answer: incremental cost allocation method- A. bundled products allocation method
- B. variable cost allocation method
- C. stand-alone cost allocation method
- D. incremental cost allocation method
Explanation: The stand-alone cost allocation method treats each user as a separate entity and uses that user's independent cost to determine the…
Correct answer: stand-alone cost allocation method- A. $2,078,000
- B. $3,078,000
- C. $2,065,000
- D. $3,065,000
Explanation: Under the figures given, the dual-rate calculation is 8,500 × $120 plus 9,500 × $110, giving $1,020,000 + $1,045,000 = $2,065,000.
Correct answer: $2,065,000- A. indirect method
- B. direct method
- C. step down method
- D. reciprocal method
Explanation: The direct method allocates each support department's cost only to operating departments and ignores services exchanged among support…
Correct answer: direct method- A. primary product
- B. First incremental product
- C. Second incremental product
- D. Third incremental product
Explanation: In incremental allocation, the highest-ranked product is the primary product, so the second-ranked product is the first incremental…
Correct answer: First incremental product- A. step down product
- B. dual mix product
- C. bundled product
- D. reciprocal product
Explanation: A bundled product combines two or more separately identifiable products and sells them for one combined price.
Correct answer: bundled product