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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 44 of 48

861. In operating income strategic analysis, the strategic component which measures change in operating income, attributed for change in price of outputs and inputs is classified as __________?

  • A. internal process component
  • B. growth component
  • C. price recovery component
  • D. productivity component

Explanation: The price recovery component measures the operating-income change caused by changes in the selling prices of outputs and the purchase…

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Correct answer: price recovery component

862. The quantity of produced output is divided by quantity of used input to calculate __________?

  • A. targeted productivity
  • B. total factor productivity
  • C. partial productivity
  • D. unused productivity

Explanation: Partial productivity is calculated as a specific output quantity divided by the quantity of one input used, such as units produced per…

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Correct answer: partial productivity

863. If the quantity of manufactured jackets is 2250000 units and the leather used to produce the output is 3500000 m², then direct partial productivity of material will be ___________?

  • A. 0.642 unit of jacket per ² of leather
  • B. 0.342 unit of jacket per ² of leather
  • C. 0.442 unit of jacket per ² of leather
  • D. 0.542 unit of jacket per ² of leather

Explanation: Direct material productivity equals output divided by material input: 2,250,000 ÷ 3,500,000 = 0.642857, or approximately 0.642 jacket per…

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Correct answer: 0.642 unit of jacket per ² of leather

864. An example of financial perspective in balanced scorecard is ___________?

  • A. employee turnover rates
  • B. operating capabilities and number of patents
  • C. operating income and revenue growth
  • D. customer satisfaction and market share

Explanation: The financial perspective tracks outcomes such as operating income, revenue growth, profitability, and return on investment.

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Correct answer: operating income and revenue growth

865. The quantity of produced output is divided with the cost of all used inputs to calculate ____________?

  • A. engineered productivity
  • B. targeted productivity
  • C. partial productivity
  • D. total factor productivity

Explanation: Total factor productivity compares output with the combined cost of all inputs used, rather than with only one input.

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Correct answer: total factor productivity

866. An organization's ability to offer market offerings at lower prices, in comparison with its competitors is known as __________?

  • A. inelastic demand
  • B. product differentiation
  • C. cost leadership
  • D. elastic demand

Explanation: Cost leadership is the strategy of achieving a lower cost structure so the organization can offer products at lower prices than…

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Correct answer: cost leadership

867. An amount of available capacity other than employed capacity, to meet the customer's demand, is classified as _________?

  • A. targeted capacity
  • B. budgeted capacity
  • C. recovery capacity
  • D. unused capacity

Explanation: Unused capacity is the available capacity that is not currently employed and can potentially be used to meet additional customer demand.

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Correct answer: unused capacity

868. Considering two fiscal years 2013 and 2014, the actual units sold in 2013 and 2014 are 11000 and 12500 units respectively, and selling price in year 2013 is $50, then revenue effect of growth will be _________?

  • A. $70,000
  • B. $75,000
  • C. $65,000
  • D. $73,000

Explanation: The growth effect uses the increase in units sold valued at the earlier selling price: (12,500 − 11,000) × $50 = $75,000.

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Correct answer: $75,000

869. The way an organization matches its capabilities with available opportunities to accomplish its goals is called _______?

  • A. elasticity incurrence
  • B. off shoring
  • C. strategy
  • D. engineering

Explanation: Strategy is the way an organization aligns its capabilities and resources with opportunities to achieve its objectives.

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Correct answer: strategy

870. An example of customer perspective in balanced scorecard is __________?

  • A. employee turnover rates
  • B. operating capabilities and number of patents
  • C. operating income and revenue growth
  • D. customer satisfaction and market share

Explanation: The customer perspective measures outcomes such as customer satisfaction, retention, and market share.

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Correct answer: customer satisfaction and market share

871. Considering the balanced scorecard, the perspective in which performance of organization includes is ___________?

  • A. financial perspective
  • B. learning and growth perspective
  • C. customer perspective
  • D. all of above

Explanation: The balanced scorecard evaluates organizational performance through several linked perspectives, including financial results, customer…

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Correct answer: all of above

872. Considering two years 2013 and 2014, the quantity of output produced in 2014 is divided by cost of input used in 2013, to produce output in 2014 to calculate ___________?

  • A. benchmark engineered productivity
  • B. benchmark total factor productivity
  • C. benchmark partial productivity
  • D. benchmark total productivity

Explanation: Benchmark total factor productivity compares output with the combined input resources used to produce it, using prior-year input cost as…

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Correct answer: benchmark total factor productivity

873. An ability of an organization, to offer its services or products that must be perceived by customers as unique and superior, in comparison to its competitors is called __________?

  • A. inelastic demand
  • B. product differentiation
  • C. cost leadership
  • D. elastic demand

Explanation: Product differentiation means making a product or service appear distinct and superior through features, quality, design, or service.

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Correct answer: product differentiation

874. In operating income strategic analysis, a component which measures the change in operating income attributed to the change in output quantity is classified as ________?

  • A. internal process component
  • B. growth component
  • C. price recovery component
  • D. productivity component

Explanation: The growth component measures the operating-income change caused by producing or selling a different quantity of output.

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Correct answer: growth component

875. The balanced scorecard perspective focuses on all the operations, and it leads to value creation process for customers, can be categorized as ___________?

  • A. learning perspective
  • B. financial perspective
  • C. internal business process perspective
  • D. customer perspective

Explanation: The internal business process perspective examines activities such as operations, innovation, and delivery that create value for…

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Correct answer: internal business process perspective

876. The balanced scorecard perspective measures company's success in targeted segments of customers, this perspective can also be classified as _________?

  • A. internal business process perspective
  • B. customer perspective
  • C. learning perspective
  • D. financial perspective

Explanation: The customer perspective measures performance in the market segments the company targets, using indicators such as customer satisfaction…

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Correct answer: customer perspective

877. In response to challenges arisen by competitors and new entrants, the strategy which must be considered by the company does include __________?

  • A. cost leadership
  • B. demand inelasticity
  • C. differentiated products
  • D. both A and C

Explanation: A company facing competitors and new entrants may seek cost leadership, differentiation, or both to build a competitive advantage.

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Correct answer: both A and C

878. Which of the following is an example of internal business perspective in balanced scorecard?

  • A. employee turnover rates
  • B. operating capabilities and number of patents
  • C. operating income and revenue growth
  • D. customer satisfaction and market share

Explanation: Internal business measures relate to operating capabilities and innovation activities, such as patents.

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Correct answer: operating capabilities and number of patents

879. An approach which is used to manage unused capacity is __________?

  • A. reengineering
  • B. downsizing
  • C. upgrading
  • D. none of above

Explanation: Downsizing reduces the organization’s workforce or operating scale and can therefore align resources with lower demand and unused…

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Correct answer: downsizing

880. An example of learning and growth perspective in balanced scorecard is _________?

  • A. employee turnover rates
  • B. operating capabilities and number of patents
  • C. operating income and revenue growth
  • D. customer satisfaction and market share

Explanation: Learning and growth measures focus on employee capability, retention and development, so employee turnover rates fit this perspective.

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Correct answer: employee turnover rates
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