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 32 of 48
- A. price engineering method
- B. industrial engineering method
- C. measuring engineering method
- D. unit engineering method
Explanation: Work measurement estimates the time and resources required for production activities, so it is commonly called the industrial engineering…
Correct answer: industrial engineering method- A. larger residual terms
- B. zero residual terms
- C. variable residual terms
- D. smaller residual terms
Explanation: A regression line fits poorly when actual observations lie far from it, producing larger residual terms.
Correct answer: larger residual terms- A. cumulative average time learning model
- B. incremental unit time learning model
- C. incremental production learning model
- D. both a and b
Explanation: The two standard learning-curve models are the cumulative-average-time model and the incremental-unit-time model.
Correct answer: both a and b- A. $800
- B. $400
- C. $300
- D. $600
Explanation: The slope coefficient is the cost change per machine hour: $27,000 ÷ 90 = $300 per hour. This makes option c correct.
Correct answer: $300- A. 1.24
- B. 0.24
- C. 0.6
- D. 1.667
Explanation: The slope coefficient is calculated as change in cost divided by change in machine hours: $9,000 ÷ $15,000 = 0.6.
Correct answer: 0.6- A. demand allocation base
- B. supply allocation base
- C. cost allocation base
- D. price allocation base
Explanation: Indirect costs cannot be traced economically to one product or service, so they are assigned using a cost allocation base such as labour…
Correct answer: cost allocation base- A. cost and cost object
- B. price and cost driver
- C. dependent variable and cost driver
- D. independent variable and cost driver
Explanation: Quantitative cost-function analysis requires paired observations of the dependent variable, usually cost, and the independent variable…
Correct answer: dependent variable and cost driver- A. coefficient of determination
- B. coefficient of index
- C. coefficient of residual
- D. coefficient of prediction
Explanation: The coefficient of determination is calculated as 1 minus unexplained variation divided by total variation.
Correct answer: coefficient of determination- A. variable cost
- B. mixed cost
- C. semi variable cost
- D. Both B and C
Explanation: A mixed cost contains both a fixed component and a variable component. Semi-variable cost is another name for mixed cost, so both options…
Correct answer: Both B and C- A. $80,000
- B. $12,800
- C. $70,000
- D. $22,800
Explanation: The slope equals the change in cost divided by the change in machine hours, so machine-hour change equals $32,000 ÷ 0.40 = 80,000 hours.
Correct answer: $80,000- A. fixed curve
- B. learning curve
- C. linear curve
- D. mixed curve
Explanation: A learning curve measures the reduction in labour hours per unit as cumulative production increases and workers gain experience.
Correct answer: learning curve- A. predicted fixed cost
- B. predicted variable cost
- C. predicted cost
- D. predicted price
Explanation: In y = a + bx, y represents the total predicted cost, a is fixed cost, and bx is the variable-cost portion.
Correct answer: predicted cost- A. pricing method
- B. manufacturing method
- C. conference method
- D. inference method
Explanation: The conference method estimates costs through informed judgments and discussions with managers familiar with departmental costs and their…
Correct answer: conference method- A. 55
- B. 15
- C. 65
- D. 85
Explanation: The observed value equals the predicted value plus the residual error: 20 + 35 = 55.
Correct answer: 55- A. has meaning
- B. has no meaning
- C. has index values
- D. has no index values
Explanation: Economic plausibility requires the goodness-of-fit measure to be meaningful in explaining how the cost driver relates to cost.
Correct answer: has meaning- A. choose price estimation method
- B. choose dependent variable
- C. choose independent variable
- D. choose revenue estimation method
Explanation: Quantitative cost estimation begins by selecting the dependent variable, usually the cost to be estimated.
Correct answer: choose dependent variable- A. heterogeneous relationship
- B. extreme relationship
- C. no homogeneous relationship
- D. homogeneous relationship
Explanation: A homogeneous relationship exists when the dependent cost represents the activity cost associated with the same or a similar cost driver.
Correct answer: homogeneous relationship- A. cost representation
- B. irrelevant range
- C. relevant range
- D. graphical representation
Explanation: The vertical dashed boundaries in a cost-function graph mark the relevant range, the activity interval in which the assumed cost behavior…
Correct answer: relevant range- A. t-value
- B. b-value
- C. d-value
- D. c-value
Explanation: The t-value compares an estimated coefficient with its standard error, commonly calculated as coefficient divided by standard error.
Correct answer: t-value- A. time horizons are long
- B. time horizons are short
- C. time horizons are irrelevant
- D. time horizons are relevant
Explanation: Over a longer time horizon, more costs can be adjusted and therefore are likely to behave as variable costs.
Correct answer: time horizons are long