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 39 of 48
- A. unplanned level
- B. budgeting level
- C. numerator level
- D. denominator level
Explanation: The fixed manufacturing overhead rate uses budgeted fixed cost divided by the denominator level, such as normal or practical capacity.
Correct answer: denominator level762. The throughput contribution is added into direct material cost of goods sold to calculate _________?
- A. indirect material
- B. revenues
- C. expenses
- D. direct material
Explanation: Throughput contribution equals revenue minus direct material cost, so adding it to direct material cost of goods sold reconstructs…
Correct answer: revenues- A. −$13500
- B. $4,500
- C. −$4500
- D. $13,500
Explanation: Contribution margin is revenue minus variable cost, so $9,000 − $4,500 = $4,500.
Correct answer: $4,500- A. upper limit
- B. lower limit
- C. zero limit
- D. minimal cost
Explanation: Capacity represents the maximum output or operating level that an organization can achieve under specified conditions, making it an upper…
Correct answer: upper limit765. The difference between master budget capacity and practical capacity is considered as ________?
- A. normal used capacity
- B. unplanned and unused capacity
- C. planned unused capacity
- D. unplanned used capacity
Explanation: Practical capacity exceeds the activity planned in the master budget; their difference is the capacity deliberately left unused in the…
Correct answer: planned unused capacity- A. $50
- B. $45
- C. $55
- D. $40
Explanation: The fixed overhead rate per denominator-level unit is calculated as $48,000 ÷ 1,200 units = $40 per unit.
Correct answer: $40- A. $2.5 per unit
- B. $1.5 per unit
- C. $3.5 per unit
- D. $5.5 per unit
Explanation: The change in units sold equals the change in operating income divided by contribution margin per unit: $9,000 ÷ $6,000 = 1.5 units.
Correct answer: $1.5 per unit- A. normal utilization
- B. standard utilization
- C. capacity utilization
- D. actual utilization
Explanation: Theoretical capacity is the ideal maximum output with no allowance for interruptions or inefficiencies, representing 100% capacity…
Correct answer: capacity utilization- A. spiral capacity
- B. supply capacity
- C. demand capacity
- D. practical capacity
Explanation: Practical capacity allows for normal unavoidable downtime, maintenance and interruptions, making it a more stable utilization benchmark…
Correct answer: practical capacity- A. production volume variance
- B. cost volume variance
- C. profit volume variance
- D. fixed cost variance
Explanation: Absorption costing assigns fixed manufacturing overhead to products, so production volume variance arises when actual output differs from…
Correct answer: production volume variance- A. direct costing
- B. indirect costing
- C. total costing
- D. One factor costing
Explanation: Variable costing is also called direct costing because only variable manufacturing costs are assigned to products, while fixed…
Correct answer: direct costing- A. of incurring
- B. of sale
- C. of manufacturing
- D. of indirect recording
Explanation: Super variable costing, also known as throughput costing, treats direct material as the only inventoriable cost.
Correct answer: of incurring- A. downward supply spiral
- B. upward supply spiral
- C. downward demand spiral
- D. upward demand spiral
Explanation: A downward demand spiral occurs when price reductions or failure to match competitors' prices cause demand to fall further.
Correct answer: downward demand spiral- A. unit level of sales
- B. unit level of production
- C. unit level of inventory
- D. unit dividends
Explanation: Under variable costing, the cost-volume-profit relationship is driven primarily by sales volume because fixed manufacturing costs are…
Correct answer: unit level of sales- A. manufacturing cost
- B. super variable costing
- C. throughput costing
- D. both B and C
Explanation: Both super variable costing and throughput costing treat direct material as the only inventoriable cost, with other manufacturing costs…
Correct answer: both B and C- A. 2500 units
- B. 2000 units
- C. 1000 units
- D. 1500 units
Explanation: The budgeted denominator level is calculated as budgeted fixed cost divided by fixed cost per unit: $55,000 ÷ $55 = 1,000 units.
Correct answer: 1000 units- A. accrual cost
- B. incurred cost
- C. period costs
- D. setup costs
Explanation: Throughput costing treats direct material as the only product cost. Variable manufacturing overhead and direct manufacturing labor are…
Correct answer: period costs- A. increase in units sold
- B. change in quantity of sold units
- C. increase in units manufactured
- D. decease in units manufactured
Explanation: Under variable costing, the change in operating income equals contribution margin per unit multiplied by the change in units sold.
Correct answer: change in quantity of sold units779. The measuring of capacity in terms of normal capacity utilization is also termed as __________?
- A. output demanded
- B. input demanded
- C. capacity supplied
- D. capacity borrowed
Explanation: Normal capacity is based on the expected average demand for the product over a representative period, so it reflects output demanded.
Correct answer: output demanded- A. actual costing method
- B. normal costing method
- C. direct costing method
- D. indirect costing method
Explanation: Actual costing uses actual input quantities multiplied by actual input prices for direct manufacturing costs.
Correct answer: actual costing method