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 38 of 48
- A. variable manufacturing cost
- B. budgeted fixed manufacturing cost
- C. adjusted manufacturing cost
- D. unadjusted labor cost
Explanation: A fixed manufacturing cost rate is calculated as budgeted fixed manufacturing cost divided by the selected allocation base.
Correct answer: budgeted fixed manufacturing cost- A. fixed manufacturing overhead cost
- B. variable manufacturing overhead cost
- C. indirect manufacturing overhead cost
- D. direct manufacturing overhead cost
Explanation: Multiplying the actual allocation base quantity by the actual fixed overhead rate gives the fixed manufacturing overhead cost allocated to…
Correct answer: fixed manufacturing overhead cost- A. $200
- B. $150
- C. $50
- D. $100
Explanation: Budgeted fixed manufacturing cost per unit is found by dividing total budgeted fixed cost by budgeted production: $45,000 ÷ 900 = $50.
Correct answer: $50- A. marginal cost per unit
- B. variable cost per unit
- C. fixed cost per unit
- D. contribution margin per unit
Explanation: Target-profit units equal total fixed costs plus target operating income, divided by contribution margin per unit.
Correct answer: contribution margin per unit- A. input costing
- B. output costing
- C. standard costing
- D. achieved costing
Explanation: Standard costing calculates cost by applying standard prices to the standard quantity of input allowed for the actual output.
Correct answer: standard costing- A. cyclical factors
- B. seasonal factors
- C. trend factors
- D. all of above
Explanation: Customer demand may vary because of cyclical movements, seasonal patterns, and long-term trends.
Correct answer: all of above- A. fixed cost does not change
- B. inventory changes
- C. inventory does not change
- D. fixed cost changes
Explanation: Under absorption and variable costing, operating income differs when inventory changes because absorption costing carries some fixed…
Correct answer: inventory changes- A. indirect manufacturing overhead cost
- B. direct manufacturing overhead cost
- C. fixed manufacturing overhead cost
- D. variable manufacturing overhead cost
Explanation: Normal costing applies the actual quantity of the allocation base to the budgeted fixed-overhead rate.
Correct answer: fixed manufacturing overhead cost- A. 3500 units
- B. 2500 units
- C. 3900 units
- D. 4900 units
Explanation: The budgeted denominator level is calculated as budgeted fixed cost divided by the fixed cost rate per unit: $40,000 ÷ $16 = 2,500 units.
Correct answer: 2500 units- A. $27,100
- B. $37,100
- C. $10,200
- D. $12,200
Explanation: Throughput contribution equals revenue minus direct material cost, the only cost treated as totally variable in throughput accounting.
Correct answer: $27,100- A. normal capacity utilization
- B. abnormal capacity utilization
- C. standard capacity utilization
- D. infinite capacity utilization
Explanation: Normal capacity utilization represents an average level of activity expected over a relevant period, usually allowing for ordinary…
Correct answer: normal capacity utilization- A. indirect manufacturing overhead cost
- B. direct manufacturing overhead cost
- C. fixed manufacturing overhead cost
- D. variable manufacturing overhead cost
Explanation: Standard quantity of the allocation base allowed for actual output, multiplied by the standard variable-overhead rate, gives applied…
Correct answer: variable manufacturing overhead cost- A. accrual contribution
- B. indirect contribution
- C. throughput contribution
- D. direct contribution
Explanation: Throughput contribution is calculated by subtracting direct material cost from revenue, because direct material is treated as the only…
Correct answer: throughput contribution- A. absorption costing
- B. variable costing
- C. fixed costing
- D. manufacturing cost
Explanation: Absorption costing treats both variable and fixed manufacturing costs as product costs and includes them in inventory until the goods are…
Correct answer: absorption costing- A. direct overhead
- B. indirect overhead cost
- C. fixed manufacturing cost
- D. variable manufacturing cost
Explanation: The key difference is the treatment of fixed manufacturing overhead: absorption costing assigns it to inventory, whereas variable costing…
Correct answer: fixed manufacturing cost- A. manufacturing in period
- B. expenses of period
- C. incurred in period
- D. accrual in period
Explanation: Period costs are not attached to units of inventory; they are charged as expenses in the period in which they are incurred.
Correct answer: expenses of period- A. $57,000
- B. $37,000
- C. $47,000
- D. $13,000
Explanation: Throughput contribution equals sales revenue minus direct material cost, so direct material cost is $25,000 − $12,000 = $13,000.
Correct answer: $13,000- A. for short run
- B. for long run
- C. for one day
- D. for few days
Explanation: Holding capacity utilization and its cost constant is a short-run assumption because capacity cannot normally be changed immediately.
Correct answer: for short run- A. more
- B. less
- C. zero
- D. none of above
Explanation: When inventory decreases, absorption costing releases fixed manufacturing overhead from inventory, reducing its income relative to…
Correct answer: more- A. $50
- B. $30
- C. $20
- D. $40
Explanation: The budgeted fixed overhead rate is calculated by dividing budgeted fixed cost by the denominator activity level: $26,000 ÷ 1,300 units =…
Correct answer: $20