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 46 of 48
- A. indirect wages
- B. health wages
- C. idle time wages
- D. shortage time wages
Explanation: Wages paid for time when workers cannot perform productive work because materials are unavailable are idle time wages.
Correct answer: idle time wages- A. $13,500
- B. $55,600
- C. $60,000
- D. $110,000
Explanation: Prime cost consists only of direct materials plus direct manufacturing labor: $85,000 + $25,000 = $110,000.
Correct answer: $110,000- A. $19,500
- B. $30,500
- C. $45,500
- D. $22,500
Explanation: Direct manufacturing labor equals prime cost minus direct materials: $25,000 − $5,500 = $19,500.
Correct answer: $19,500- A. payroll fringe costs
- B. health costs
- C. premium costs
- D. workers costs
Explanation: Payroll fringe costs are indirect employee-related costs, including health-care premiums, pension contributions, insurance, and similar…
Correct answer: payroll fringe costs- A. finished goods inventory
- B. indirect material inventory
- C. direct materials inventory
- D. work in process inventory
Explanation: Finished goods inventory consists of completed products that remain unsold at the reporting date.
Correct answer: finished goods inventory- A. direct material costs
- B. indirect material costs
- C. direct labor costs
- D. indirect labor costs
Explanation: Raw material that can be specifically traced to the manufactured product becomes part of the cost object, so it is a direct material cost.
Correct answer: direct material costs- A. $55,000
- B. $37,500
- C. $95,000
- D. $26,000
Explanation: Prime cost combines direct materials and direct manufacturing labour. Thus, $75,000 + $20,000 = $95,000.
Correct answer: $95,000- A. information accounting
- B. cost accounting
- C. analyzing accounts
- D. marketing costs
Explanation: Cost accounting determines product costs and supplies information for planning, control, and managerial decisions.
Correct answer: cost accounting- A. $5,850
- B. $5,950
- C. $9,950
- D. $10,050
Explanation: The stated total is found by adding direct service labour, idle-time wages, and overtime premium: $7,000 + $2,000 + $950 = $9,950.
Correct answer: $9,950- A. discuss costs
- B. prime costs
- C. resale cost
- D. merchandise costs
Explanation: Prime cost consists of direct materials plus direct manufacturing labour.
Correct answer: prime costs- A. $4,450
- B. $6,450
- C. $21,500
- D. $14,300
Explanation: Adding the three stated amounts gives $5,000 + $1,000 + $450 = $6,450. Idle-time wages and overtime premium are included in the requested…
Correct answer: $6,450- A. $40,000
- B. $60,000
- C. $52,000
- D. $20,000
Explanation: Prime cost equals direct material cost plus direct manufacturing labour.
Correct answer: $40,000- A. inventoriable costs
- B. finished costs
- C. factory overhead costs
- D. manufacturing overhead costs
Explanation: Inventoriable costs are initially recorded in inventory and transferred to cost of goods sold when the manufactured products are sold.
Correct answer: inventoriable costs- A. manufacturing costs
- B. prime costs
- C. conversion costs
- D. both B and C
Explanation: Prime cost and conversion cost are standard terms used to analyse manufacturing costs: prime cost is direct materials plus direct labour…
Correct answer: both B and C- A. transaction costs
- B. conversion costs
- C. resale costs
- D. merchandise costs
Explanation: Conversion cost equals direct manufacturing labor plus manufacturing overhead because these are the costs of converting raw materials into…
Correct answer: conversion costs- A. manufacturing costs
- B. prime costs
- C. conversion costs
- D. both B and C
Explanation: Direct labor forms part of prime cost with direct materials and part of conversion cost with manufacturing overhead.
Correct answer: both B and C- A. labor costs
- B. factory overhead costs
- C. finished costs
- D. manufacturing costs
Explanation: Supplies, plant maintenance, rent, insurance and cleaning labor support production but cannot normally be traced conveniently to one unit.
Correct answer: factory overhead costs- A. $47,000
- B. $33,000
- C. $57,000
- D. $18,000
Explanation: Conversion cost is calculated as direct manufacturing labor plus manufacturing overhead: $40,000 + $7,000 = $47,000.
Correct answer: $47,000- A. contracting costs
- B. product cost
- C. government costs
- D. marketing costs
Explanation: Costs assigned to units produced are product costs, such as direct materials, direct labor and manufacturing overhead.
Correct answer: product cost920. The costs which are considered as expenses in the accounting period are also known as ____________?
- A. inventory costs
- B. period costs
- C. timed costs
- D. labor overheads
Explanation: Period costs are charged as expenses in the accounting period in which they are incurred rather than being attached to inventory.
Correct answer: period costs