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 45 of 48
- A. reengineering
- B. differentiation
- C. bargaining
- D. targeting
Explanation: Reengineering means fundamentally redesigning and rethinking business processes to achieve major improvements in quality, speed, cost and…
Correct answer: reengineering- A. differentiation scorecard
- B. bargaining scorecard
- C. leadership scorecard
- D. balanced scorecard
Explanation: A balanced scorecard converts an organisation’s mission and strategy into a connected set of performance measures across financial…
Correct answer: balanced scorecard- A. $60,000
- B. $6,000
- C. $65,000
- D. $6,500
Explanation: The price increase is $11 − $9 = $2 per unit, and applying it to 30,000 units gives a price-recovery effect of $2 × 30,000 = $60,000.
Correct answer: $60,000- A. internal business process perspective
- B. external business process perspective
- C. leadership perspective
- D. reengineering perspective
Explanation: Innovation, operations, and post-sales service are the three commonly discussed sub-processes of the balanced scorecard’s internal…
Correct answer: internal business process perspective- A. product under costing
- B. product over costing
- C. expected under cost
- D. expected over cost
Explanation: A product is undercosted when it consumes relatively large amounts of resources but is assigned too little cost per unit.
Correct answer: product under costing- A. manufactured costing
- B. activity based costing
- C. allocation costing
- D. base costing
Explanation: Activity-based costing treats activities as cost objects and assigns their costs to products or services according to the activities…
Correct answer: activity based costing- A. no cost pool
- B. One or two cost pools
- C. sustained tracing
- D. support tracing
Explanation: Activity-based costing normally uses several cost pools, each linked to an activity and its cost driver, rather than one broad overhead…
Correct answer: One or two cost pools- A. increase in product diversity
- B. increase in indirect costs
- C. product market competitions
- D. all of above
Explanation: Greater product diversity, rising indirect costs, and stronger market competition all increase the need for a more refined costing system.
Correct answer: all of above- A. expected under cost
- B. expected over cost
- C. product under costing
- D. product over costing
Explanation: A product is overcosted when it is assigned more cost than the resources it actually consumes.
Correct answer: product over costing890. In an activity based costing implementation, the product's diverse demand is based on _________?
- A. batch size
- B. complexity
- C. process steps
- D. all of above
Explanation: Activity-based costing recognises that products may differ in batch sizes, complexity and the number of process steps they require.
Correct answer: all of above- A. different task
- B. purpose cost
- C. an activity
- D. an allocation cost
Explanation: An activity is a unit of work or task performed for a specific purpose, such as setting up a machine or inspecting a batch.
Correct answer: an activity- A. service-cost across subsidizing
- B. product-price cross subsidizing
- C. product-cost cross subsidizing
- D. product cross subsidizing
Explanation: Product-cost cross-subsidising occurs when one product is undercosted and at least one other product is overcosted.
Correct answer: product-cost cross subsidizing- A. budgeted direct cost rate
- B. budgeted indirect cost rate
- C. expected indirect cost rate
- D. direct budget percentage
Explanation: An indirect cost rate is calculated by dividing the budgeted indirect cost pool by the budgeted quantity of its allocation base.
Correct answer: budgeted indirect cost rate- A. purpose level costs
- B. output-unit level costs
- C. input-unit level costs
- D. activity level costs
Explanation: Output-unit-level costs arise from activities performed for each individual unit of a product or service, so they increase with the number…
Correct answer: output-unit level costs- A. indirect costs
- B. direct cost
- C. labor cost
- D. raw material cost
Explanation: In ABC, output-unit-level activity costs are commonly treated as indirect costs and allocated to products using an activity driver such as…
Correct answer: indirect costs896. The costs of undertaken activities is to support individual products and are known as __________?
- A. expected sustaining
- B. input sustaining
- C. output sustaining
- D. product sustaining costs
Explanation: Product-sustaining costs support an individual product or service regardless of how many units or batches are produced.
Correct answer: product sustaining costs- A. cost hierarchy
- B. price hierarchy
- C. activity hierarchy
- D. purpose hierarchy
Explanation: A cost hierarchy groups activities according to the level at which their costs are incurred, such as unit-level, batch-level…
Correct answer: cost hierarchy- A. individual sustaining costs
- B. facility sustaining costs
- C. sustained tracing
- D. support tracing
Explanation: Facility-sustaining costs support the organization as a whole and cannot be traced economically to individual products.
Correct answer: facility sustaining costs- A. heterogeneous price pool
- B. homogenous cost pool
- C. heterogeneous cost pool
- D. homogenous price pool
Explanation: A homogeneous cost pool contains costs with similar cause-and-effect relationships, so one cost driver can reasonably serve as its…
Correct answer: homogenous cost pool- A. activity level costs
- B. input level costs
- C. batch level costs
- D. output level costs
Explanation: Batch-level costs arise from performing activities for a group or batch of products, rather than for each individual unit.
Correct answer: batch level costs