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 6 of 48
- A. interactive control systems
- B. belief systems
- C. boundary systems
- D. diagnostic control systems
Explanation: Diagnostic control systems use performance measures to compare actual results with targets and identify corrective action.
Correct answer: diagnostic control systems- A. $142,020
- B. $172,020
- C. $162,020
- D. $152,020
Explanation: EVA equals after-tax operating income minus the capital charge: $185,000 − [11% × ($485,000 − $367,000)] = $172,020.
Correct answer: $172,020- A. congruent costs
- B. imputed costs
- C. operating costs
- D. transfer costs
Explanation: Imputed costs are not recorded through ordinary accounting entries but are assigned for decision-making or performance measurement, such…
Correct answer: imputed costs- A. return on sales * investment turnover
- B. return on sales + investment turnover
- C. return on sales - investment turnover
- D. investment turnover + residual incomeCompare Investment Apps
Explanation: Under the DuPont method, ROI is decomposed as return on sales multiplied by investment turnover.
Correct answer: return on sales * investment turnover- A. congruent cost of investment
- B. transfer cost of investment
- C. operating cost of investment
- D. imputed cost of investmentHire An Accountant
Explanation: Multiplying the investment base by the required rate of return produces an imputed cost of investment, also called a capital charge.
Correct answer: imputed cost of investmentHire An Accountant- A. flexible costs
- B. variable costs
- C. overhead costs
- D. fixed costs
Explanation: Standard costing allocates overhead by applying the standard overhead rate to the standard quantity or activity level allowed for actual…
Correct answer: overhead costs- A. variable overhead cost
- B. fixed overhead cost
- C. fixed batch cost
- D. variable batch costGet Executive Coaching
Explanation: Energy, machine maintenance, indirect materials and engineering support generally change with production activity, so they are classified…
Correct answer: variable overhead cost- A. overhead flexible budget variance
- B. overhead fixed budget variance
- C. overhead flexible cost variance
- D. overhead flexible price variance
Explanation: The difference between actual variable overhead and the variable overhead allowed by the flexible budget is the variable overhead…
Correct answer: overhead flexible budget variance- A. machine hours
- B. flexible hours
- C. variable hours
- D. fixed hours
Explanation: Machine hours are a common cost-allocation base when machine use drives overhead consumption.
Correct answer: machine hours- A. constant costing
- B. standard costing
- C. unit costing
- D. batch costingGet Executive Coaching
Explanation: Standard costing applies predetermined standard price or rate and quantity amounts to actual output, allowing actual results to be…
Correct answer: standard costing- A. manufacturing costs incurred
- B. variable costs incurred
- C. fixed costs incurred
- D. actual costs incurredCompare Credit Cards
Explanation: The flexible-budget amount plus an unfavorable variable-overhead flexible-budget variance gives the actual variable overhead incurred.
Correct answer: actual costs incurredCompare Credit Cards- A. fixed batch cost
- B. variable batch cost
- C. variable overhead cost
- D. fixed overhead cost
Explanation: Plant depreciation, plant-manager salaries and plant leasing costs do not normally change with short-term production volume.
Correct answer: fixed overhead cost- A. anticipated budgeting
- B. number budgeting
- C. predict budgeting
- D. kaizen budgeting
Explanation: Kaizen budgeting incorporates continuous, incremental improvements expected during the budget period into budgeted costs and revenues.
Correct answer: kaizen budgeting- A. financial budget
- B. capital budget
- C. cash flows budget
- D. balanced budgetSearch Public Records
Explanation: A financial budget covers capital expenditure and projected financial statements, including the cash-flow statement and balance sheet.
Correct answer: financial budget- A. analysis of batches
- B. analysis of batches
- C. analysis of products
- D. making predictions about future
Explanation: After analysing products and batches, the budgeting process makes predictions about future conditions such as sales, costs and production…
Correct answer: making predictions about future- A. $5,000
- B. $35,000
- C. $15,000
- D. $45,000
Explanation: The manufacturing overhead budget combines indirect manufacturing labour, power, maintenance and supplies: $20,000 + $5,000 + $10,000 =…
Correct answer: $35,000- A. implementing income
- B. implementing the decision
- C. efficient implementation
- D. effective implementationMonitor Fiscal Updates
Explanation: Once operating decisions have been developed, the final step is to implement those decisions through the operating budget.
Correct answer: implementing the decision- A. bill of materials
- B. bill of sequence
- C. bill of detail
- D. bill of raw materials
Explanation: A bill of materials lists the raw materials required, their quantities and often the sequence or structure in which they are used to make…
Correct answer: bill of materials- A. focused statement
- B. slack statement
- C. budgeted income statement
- D. operating budget
Explanation: An operating budget includes the budgeted income statement together with supporting schedules such as sales, production, direct materials…
Correct answer: operating budget- A. budget production
- B. planned production
- C. setup production
- D. stand by production
Explanation: Required production equals budgeted sales plus desired ending finished-goods inventory minus beginning finished-goods inventory.
Correct answer: budget production