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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- A. cost per good units transferred out
- B. cost per good units transferred in
- C. revenue per good units transferred out
- D. revenue per good units transferred in
Explanation: Adding the cost of normal spoilage to transferred-out cost spreads the production cost over the good units produced.
Correct answer: cost per good units transferred out- A. inventory costing
- B. conversion costing
- C. normal scrap costing
- D. abnormal scrap costingHire An Accountant
Explanation: Inventory costing explains how scrap is recorded and when its proceeds or cost effect is recognized in operating income.
Correct answer: inventory costing- A. physical tracking
- B. non-inventoriable costing
- C. inventory costing
- D. both a and c
Explanation: Scrap accounting covers both physical tracking of scrap units and inventory costing, which determines the financial effect of scrap.
Correct answer: both a and c- A. rework point
- B. inspection point
- C. spoilage point
- D. scrap point
Explanation: An inspection point is the stage at which completed or partly completed units are examined against quality standards and accepted or…
Correct answer: inspection point- A. normal scrap
- B. normal spoilage
- C. abnormal spoilage
- D. weighted spoilage
Explanation: Abnormal spoilage is the excess spoilage that is not expected under efficient operating conditions or the normal production process.
Correct answer: abnormal spoilage- A. short lengths from wood work
- B. defective aluminum cans recycled by manufacturer
- C. detection of defective pieces before shipment
- D. all of above
Explanation: Defective aluminum cans that cannot be sold as intended and are recycled are treated as spoilage.
Correct answer: defective aluminum cans recycled by manufacturer- A. conversion costs
- B. sunk costs
- C. inventoriable costs
- D. non inventoriable costs
Explanation: Normal spoilage is an expected part of production, so its cost is absorbed into the cost of the good units produced and remains…
Correct answer: inventoriable costs- A. Gross weighted margin
- B. weighted average revenue
- C. weighted average cost
- D. weighted average conversion cost
Explanation: Weighted-average cost per equivalent unit is calculated by dividing total costs assigned to work in process and current production by…
Correct answer: weighted average cost- A. conversion expense costing system
- B. inventory costing system
- C. process costing system
- D. job costing systemAccounting & Auditing
Explanation: A process costing system accumulates and classifies costs by production process or department, which is appropriate when similar units are…
Correct answer: process costing system- A. summarize flow of output
- B. compute output in units
- C. summarize total costs
- D. compute cost for each equivalent unit
Explanation: The usual process-costing sequence is to trace physical flow, calculate equivalent units, summarize total costs, compute cost per…
Correct answer: summarize total costs- A. $10
- B. $100
- C. $1,000
- D. $1,200Finance
Explanation: Weighted-average cost per equivalent unit equals total cost divided by equivalent units: $350,000 ÷ 3,500 = $100.
Correct answer: $100- A. $16
- B. $60
- C. $6
- D. $26
Explanation: Unit cost is found by dividing total production cost by output: $30,000 ÷ 5,000 units = $6 per unit.
Correct answer: $6- A. summarize total costs
- B. compute cost for each equivalent unit
- C. summarize flow of output
- D. compute output in units
Explanation: After identifying the physical flow of production, the second process-costing step is to compute the output in equivalent units.
Correct answer: compute output in units- A. weighted average method
- B. net present value method
- C. Gross production method
- D. net present value method
Explanation: The weighted-average method combines beginning work-in-process costs with current-period costs and divides them by equivalent units…
Correct answer: weighted average method- A. summarize total costs
- B. compute cost for each equivalent unit
- C. summarize flow of output
- D. compute output in unitsGet Executive Coaching
Explanation: After summarizing output, computing equivalent units, and summarizing total costs, the fourth step is to compute the cost per equivalent…
Correct answer: compute cost for each equivalent unit- A. allocate separable costs
- B. allocate joint costs
- C. compute gross margin
- D. assign total cost to completed unitsHire An Accountant
Explanation: The fifth process-costing step assigns the total cost to completed units and the ending work in process.
Correct answer: assign total cost to completed unitsHire An Accountant- A. partial work costs
- B. transferred-in costs
- C. transferred-out costs
- D. weighted average costsCompare Credit Cards
Explanation: Transferred-in costs are the costs brought into a department from the preceding department after processing there.
Correct answer: transferred-in costs- A. 1800 units
- B. 2300 units
- C. 10300 units
- D. 1500 units
Explanation: Under the equivalent-unit flow equation, beginning WIP plus current-period work equals completed units plus ending WIP.
Correct answer: 2300 units- A. 1800 units
- B. 1500 units
- C. 1300 units
- D. 1500 units
Explanation: Equivalent units completed during the current period equal beginning WIP plus work done during the period minus ending WIP.
Correct answer: 1300 units- A. transferred-in costs
- B. transferred-out costs
- C. FIFO costs
- D. LIFO costsCompare Credit Cards
Explanation: Costs incurred by a previous department become transferred-in costs when the partially completed product enters the next department.
Correct answer: transferred-in costs