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 37 of 48
- A. recording of liabilities
- B. costing of current assets
- C. costing of machinery
- D. costing of inventories
Explanation: Variable and absorption costing determine which manufacturing costs are included in the cost of inventory.
Correct answer: costing of inventories- A. $4,000
- B. $2,500
- C. $1,000
- D. $15,000
Explanation: Contribution margin per unit equals selling price minus all variable costs: $2,500 − $1,000 − $500 = $1,000.
Correct answer: $1,000- A. $40,000
- B. $60,000
- C. $70,000
- D. $50,000
Explanation: Using the stated per-unit cost, total budgeted manufacturing cost is $200 × 350 units = $70,000.
Correct answer: $70,000- A. $315,000
- B. $415,000
- C. $615,000
- D. $515,000
Explanation: The change in operating income equals contribution margin per unit multiplied by the change in units sold: $12,300 × 50 = $615,000.
Correct answer: $615,000- A. fixed margin per unit
- B. variable margin per unit
- C. contribution margin per batch
- D. contribution margin per unit
Explanation: Subtracting variable manufacturing and variable marketing costs from selling price leaves the contribution margin generated by one unit.
Correct answer: contribution margin per unit- A. $1,250
- B. $1,350
- C. $1,450
- D. $1,550
Explanation: Budgeted production units equal total budgeted fixed manufacturing cost divided by the stated per-unit cost: $150,000 ÷ $120 = 1,250…
Correct answer: $1,250- A. higher income
- B. zero dividends
- C. negative income value
- D. lower income
Explanation: With production greater than sales, absorption costing defers part of fixed manufacturing overhead in ending inventory.
Correct answer: higher income- A. investment decisions
- B. pricing decisions
- C. product mix decisions
- D. Both B and C
Explanation: Normal costing and standard costing provide cost information useful for setting prices and evaluating alternative product mixes.
Correct answer: Both B and C- A. 100 units
- B. 110 units
- C. 120 units
- D. 140 units
Explanation: Required units are calculated as target operating income divided by contribution margin per unit when no fixed costs are provided: $84,000…
Correct answer: 140 units- A. output costing
- B. standard costing
- C. achieved costing
- D. input costing
Explanation: In standard costing, the standard quantity allowed for the actual output is multiplied by the standard price to determine the standard…
Correct answer: standard costing- A. $20
- B. $5
- C. $10
- D. $15
Explanation: Budgeted fixed manufacturing cost per unit equals total fixed manufacturing cost divided by budgeted production: $35,000 ÷ 7,000 = $5 per…
Correct answer: $5- A. $21,300
- B. $148,700
- C. $138,700
- D. $118,700
Explanation: Throughput contribution equals revenue minus direct material cost, so direct material cost of goods sold is $85,000 − $63,700 = $21,300.
Correct answer: $21,300- A. $36,000
- B. $66,000
- C. $56,000
- D. $46,000
Explanation: Multiplying the budgeted per-unit cost by planned production gives $165 × 400 = $66,000.
Correct answer: $66,000- A. seasonal capacity utilization
- B. normal capacity utilization
- C. standard capacity utilization
- D. theoretical capacity utilization
Explanation: Normal capacity is based on the average customer demand expected over a representative period, including ordinary fluctuations in…
Correct answer: normal capacity utilization- A. standard capacity
- B. actual capacity
- C. practical capacity
- D. theoretical costing
Explanation: Practical capacity allows for unavoidable operating interruptions such as holidays, maintenance, and normal downtime.
Correct answer: practical capacity- A. must
- B. not a must
- C. non-inventoriable
- D. inventoriable
Explanation: Under variable costing, fixed manufacturing overhead is expensed in the period rather than included in inventory, so a production-volume…
Correct answer: not a must- A. inventoriable
- B. non-inventoriable
- C. high dividend
- D. low dividend
Explanation: Under variable costing, only variable manufacturing costs are included in inventory; fixed manufacturing overhead is expensed in the…
Correct answer: non-inventoriable- A. $7,000
- B. $3,000
- C. $4,000
- D. $5,000
Explanation: Contribution margin per unit equals selling price less all variable costs: $5,000 − $1,500 − $500 = $3,000.
Correct answer: $3,000- A. manufacturing costing
- B. absorption costing
- C. variable costing
- D. labor costing
Explanation: Variable costing treats variable manufacturing costs as inventoriable and charges fixed manufacturing overhead to the period.
Correct answer: variable costing- A. more sales
- B. more inventory units
- C. less inventory units
- D. less sales
Explanation: Absorption costing assigns fixed manufacturing overhead to units produced, so producing more units can place more fixed cost in inventory…
Correct answer: more inventory units