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 40 of 48
- A. direct costing method
- B. indirect costing method
- C. actual costing method
- D. normal costing method
Explanation: Normal costing applies a budgeted variable-overhead rate to the actual quantity of the allocation base used.
Correct answer: normal costing method- A. capacity write down
- B. capacity write up
- C. capacity supplied
- D. capacity borrowed
Explanation: Theoretical and practical capacity describe the amount of production capacity supplied by available resources.
Correct answer: capacity supplied- A. production exceeds breakeven sales
- B. breakeven sales exceeds production
- C. price exceeds cost
- D. cost exceeds price
Explanation: When production exceeds sales, absorption costing carries some fixed manufacturing overhead in ending inventory, while variable costing…
Correct answer: production exceeds breakeven sales- A. budgeted production units
- B. indirect production units
- C. input material units
- D. accrued production units
Explanation: Budgeted fixed manufacturing cost per unit is computed by dividing total budgeted fixed manufacturing cost by the budgeted number of…
Correct answer: budgeted production units785. If the production is less than sales, then operating income under variable costing is __________?
- A. negative income value
- B. lower income
- C. higher income
- D. zero dividends
Explanation: When sales exceed production, inventory decreases and absorption costing releases previously deferred fixed manufacturing overhead.
Correct answer: higher income- A. indirect labor cost of goods sold
- B. direct labor cost of goods sold
- C. direct material cost of goods sold
- D. indirect material cost of goods sold
Explanation: Throughput contribution equals revenue minus direct material cost, so direct material cost of goods sold is found by subtracting…
Correct answer: direct material cost of goods sold- A. throughput costing
- B. unit costing
- C. batch costing
- D. manufacturing costing
Explanation: Throughput costing is another name for super-variable costing because it treats direct material as the main product cost and focuses on…
Correct answer: throughput costing- A. $4,000
- B. $1,000
- C. $2,000
- D. $3,000
Explanation: Budgeted production units are found by dividing total fixed manufacturing cost by fixed manufacturing cost per unit: $124,000 ÷ $124 =…
Correct answer: $1,000- A. denominator
- B. numerator
- C. multiplier
- D. equalizer
Explanation: Practical capacity is used as the denominator when calculating budgeted fixed manufacturing cost per unit.
Correct answer: denominator- A. $8,150
- B. $23,150
- C. $33,150
- D. $13,150
Explanation: Under throughput costing, throughput contribution equals revenue minus direct material cost, so revenue is $15,650 + $7,500 = $23,150.
Correct answer: $23,150- A. fixed material price
- B. variable materials price
- C. fixed production units
- D. budgeted production units
Explanation: Dividing budgeted fixed manufacturing cost by fixed manufacturing cost per unit removes the per-unit amount and leaves the planned number…
Correct answer: budgeted production units- A. pricing decisions
- B. marketing decisions
- C. financial decisions
- D. cost budgeting decisions
Explanation: Capacity planning focuses on available production capacity, resource use and related cost budgets rather than setting selling prices.
Correct answer: pricing decisions793. The difference between the budgeted amounts and the actual results is classified as __________?
- A. standard deviation
- B. variances
- C. mean average
- D. weighted average
Explanation: A variance is the difference between a budgeted or standard amount and the actual result.
Correct answer: variances- A. cost center
- B. revenue center
- C. profit center
- D. investment center
Explanation: A profit center manager controls both revenues and costs, so the department's profit can be evaluated.
Correct answer: profit center- A. cost center
- B. revenue center
- C. profit center
- D. investment center
Explanation: A cost center manager is accountable for controlling costs but does not directly control revenues or investment decisions.
Correct answer: cost center796. The larger number of manager subordinates and the higher level manager are termed as _________?
- A. activity subordinates
- B. broader responsibility center
- C. broader subordinates
- D. activity ordinates
Explanation: A broader responsibility center covers more subordinates and is usually managed at a higher organizational level.
Correct answer: broader responsibility center- A. evaluating strategy
- B. performing strategy
- C. warned strategy
- D. weighted strategy
Explanation: Evaluating strategy uses selected variables or indicators to determine whether strategic actions are producing the intended results.
Correct answer: evaluating strategy- A. sales department
- B. investing center
- C. marketing department
- D. segment department
Explanation: A sales department is normally a revenue center because its manager is evaluated mainly on revenues generated.
Correct answer: sales department- A. profit center
- B. investment center
- C. cost center
- D. revenue center
Explanation: A revenue center manager is responsible for generating revenues but generally has no control over the related costs.
Correct answer: revenue center- A. employee suggestion
- B. customer suggestion
- C. cost suggestion
- D. price suggestion
Explanation: Kaizen budgeting emphasizes continuous, small cost improvements, with employees suggesting practical ways to reduce waste and improve…
Correct answer: employee suggestion