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 41 of 48
- A. budgeted accounting
- B. action accounting
- C. planned accounting
- D. responsibility accounting
Explanation: Responsibility accounting measures and reports the budgets, actions, and performance of individual responsibility centers.
Correct answer: responsibility accounting- A. strategic implementation
- B. proper implementation
- C. performance evaluation
- D. well evaluated
Explanation: Performance evaluation uses variances and other measures to judge whether managers achieved planned results and implemented strategies…
Correct answer: performance evaluation- A. varied warning
- B. times warning
- C. managers warning
- D. early warning
Explanation: An early-warning variance signals a developing deviation soon enough for managers to take corrective action.
Correct answer: early warning- A. subunit center
- B. instruction center
- C. responsibility center
- D. activity segment
Explanation: A responsibility center is an organizational subunit whose manager is accountable for specified activities, costs, revenues, or…
Correct answer: responsibility center- A. profit center
- B. investment center
- C. cost center
- D. revenue center
Explanation: An investment center manager is accountable for revenues, costs, and the assets or investments used to generate them.
Correct answer: investment center- A. measurement object
- B. cost object
- C. accounting object
- D. budget object
Explanation: A cost object is anything for which costs are measured, such as a product, service, department, customer, or project.
Correct answer: cost object- A. actual cost
- B. budgeted cost
- C. past cost
- D. incurred cost
Explanation: Actual cost is the cost that has already been incurred and is reported from historical records.
Correct answer: actual cost- A. cost object line cost
- B. cost tracing
- C. cost object indirect cost
- D. cost object staff cost
Explanation: Cost tracing assigns a cost directly to a specific cost object when the relationship can be identified economically, such as direct…
Correct answer: cost tracing- A. cost drivers
- B. timed drivers
- C. variable drivers
- D. fixed drivers
Explanation: A cost driver is a factor that causes or influences the amount of cost, such as production volume, machine hours, or activity level.
Correct answer: cost drivers- A. source cost
- B. sacrifice cost
- C. treated cost
- D. cost
Explanation: Cost is the monetary measure of resources sacrificed or forgone to achieve a specific objective.
Correct answer: cost- A. line cost
- B. staff cost
- C. direct cost
- D. indirect cost
Explanation: An indirect cost relates to a cost object but cannot be traced to it economically, so it must be allocated using a reasonable basis.
Correct answer: indirect cost- A. total cost
- B. infeasible cost
- C. fixed cost
- D. variable cost
Explanation: A fixed cost remains constant in total within the relevant production range, even though its cost per unit changes as output changes.
Correct answer: fixed cost- A. specific activity
- B. given time period
- C. common activity
- D. both a and b
Explanation: Whether a cost is fixed or variable depends on the specified activity level and the particular time period being considered.
Correct answer: both a and b- A. direct cost
- B. indirect cost
- C. line cost
- D. staff cost
Explanation: A direct cost can be economically traced to a particular cost object, such as a product, job, or department.
Correct answer: direct cost- A. fixed cost
- B. variable cost
- C. total cost
- D. infeasible cost
Explanation: A variable cost changes in total in proportion to changes in production or activity volume, while its cost per unit generally remains…
Correct answer: variable cost816. The process of tracing the direct costs and allocation of indirect costs is known as __________?
- A. cost assignment
- B. direct assignment
- C. indirect assignment
- D. economic assignment
Explanation: Cost assignment is the broad process of assigning costs to cost objects, including tracing direct costs and allocating indirect costs.
Correct answer: cost assignment- A. past cost
- B. incurred cost
- C. actual cost
- D. budgeted cost
Explanation: A budgeted cost is a cost expected or planned to be incurred in the future.
Correct answer: budgeted cost818. The process of assigning the indirect costs to any specific cost object is known as ___________?
- A. economic cost
- B. cost tracing
- C. cost allocation
- D. non-economic costs
Explanation: Cost allocation means assigning an indirect cost to a cost object using a reasonable allocation base.
Correct answer: cost allocation819. The relationship between change in activity and change in total costs is considered as __________?
- A. fixed relationship
- B. cause and effect relationship
- C. ineffective relationship
- D. variable relationship
Explanation: A cause-and-effect relationship explains how a change in an activity, such as production volume, causes a change in total cost.
Correct answer: cause and effect relationship- A. system accumulation
- B. accumulated data
- C. cost accumulation
- D. organized accumulation
Explanation: Cost accumulation is the systematic collection and organization of cost data in an accounting system.
Correct answer: cost accumulation