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 23 of 48
- A. step down allocation method
- B. stand-alone revenue allocation method
- C. incremental revenue allocation method
- D. revenue mix allocation methodAccess Government Careers
Explanation: The incremental revenue allocation method ranks bundled products using management’s predetermined order and allocates revenue…
Correct answer: incremental revenue allocation method- A. production department
- B. operating department
- C. allocation base department
- D. both a and b
Explanation: A production department directly works on the product, while an operating department is the broader term for a department involved in the…
Correct answer: both a and b- A. supply department
- B. support department
- C. production department
- D. allocation base department
Explanation: A support department serves other internal departments rather than directly manufacturing the main product or delivering the main service.
Correct answer: support department- A. relevant
- B. bunk
- C. dispose value
- D. sunk
Explanation: The cost of a machine that will be acquired in the future is a relevant cost because it changes depending on the decision being…
Correct answer: relevant- A. outsourcing
- B. insourcing
- C. idle sourcing
- D. sunk sourcing
Explanation: Outsourcing means obtaining goods or services from an external supplier instead of producing or obtaining them internally.
Correct answer: outsourcing- A. parallel revenues
- B. abnormal revenues
- C. expected future revenues
- D. serial revenuesHire An Accountant
Explanation: Relevant revenue must relate to future outcomes and differ between the alternatives under consideration.
Correct answer: expected future revenues- A. sunk costs
- B. bunked costs
- C. unrecorded costs
- D. recorded costsHire An Accountant
Explanation: A sunk cost cannot be recovered or changed by a current decision, so it remains the same regardless of the selected alternative.
Correct answer: sunk costs448. An amount of additional cost incurred for any particular activity is classified as ____________?
- A. incremental cost
- B. differential cost
- C. dependent cost
- D. independent cost
Explanation: Incremental cost is the extra cost caused by undertaking an additional activity or increasing the level of activity.
Correct answer: incremental cost- A. multi-collinearity information
- B. quantitative information
- C. qualitative analysis
- D. obtaining information
Explanation: After identifying a decision problem, the next step is to obtain the information needed to evaluate the available alternatives.
Correct answer: obtaining information- A. qualitative factors
- B. quantitative factors
- C. expected factors
- D. recorded factors
Explanation: Quantitative factors are outcomes that can be expressed numerically, such as costs, revenues, quantities, or profits.
Correct answer: quantitative factors- A. irrelevant
- B. depreciated cost
- C. salvages
- D. relevantSearch Public Records
Explanation: The disposal or salvage value of an old machine affects the comparison between alternatives, so it is relevant to a replacement decision.
Correct answer: relevantSearch Public Records- A. incremental decisions
- B. outsource decisions
- C. product mix decisions
- D. in-source decisions
Explanation: A product mix decision determines which products to make and sell and the quantity of each when resources are limited.
Correct answer: product mix decisions- A. quantitative analysis
- B. decision method
- C. qualitative method
- D. linearity methodTry Prep Courses
Explanation: A decision method combines quantitative analysis, such as costs and profits, with qualitative analysis, such as quality or employee…
Correct answer: decision method- A. employee morale
- B. cost of materials
- C. cost of workers
- D. cost of marketing
Explanation: Employee morale is qualitative because it describes an attitude or workplace condition that is not directly measured in monetary terms.
Correct answer: employee morale- A. dependent cost
- B. independent cost
- C. incremental cost
- D. differential costHire An Accountant
Explanation: Differential cost is the difference in cost between two or more alternatives.
Correct answer: differential costHire An Accountant- A. qualitative factors
- B. quantitative factors
- C. expected factors
- D. recorded factors
Explanation: Financial factors with a measurable monetary value are quantitative factors because they can be expressed numerically, such as rupees…
Correct answer: quantitative factors- A. employee behavior at workplace
- B. employee satisfaction
- C. employee morale
- D. cost of materials
Explanation: The cost of materials is a quantitative factor because it can be measured in units and money.
Correct answer: cost of materials- A. demand or supply decisions
- B. make or buy decisions
- C. relevant or irrelevant decision
- D. idle or busy decisions
Explanation: A make-or-buy decision compares producing a product internally with purchasing it from an outside supplier.
Correct answer: make or buy decisions- A. linear predictions
- B. dependent predictions
- C. making predictions
- D. independent predictions
Explanation: After identifying the decision and considering the available alternatives, the process proceeds to making predictions about the costs and…
Correct answer: making predictions- A. unrecorded costs
- B. recorded costs
- C. sunk costs
- D. bunked costs
Explanation: Costs already incurred in the past cannot be changed by a current decision, so they are called sunk costs.
Correct answer: sunk costs