# Cost Accounting MCQs

AccountingQnA.com has 925 Cost Accounting MCQs

## Level of used input to achieve a determined level of output is termed as

• A. efficiency
• B. effectiveness
• C. growth evaluation
• D. performance evaluation
• Correct Answer: Option
A

## Difference between an actual budget and corresponding amount in static budget is classified as

• A. correspondent budget
• B. full budget variance
• C. methodology variance
• D. static budget variance
• Correct Answer: Option
D

## Master budget, which is based on planned output level at start of budget period is considered as

• A. static budget
• B. varied budget
• C. marketing budget
• D. methodological budget
• Correct Answer: Option
A

## If budgeted input price is \$80 and price variance is \$40, then an actual price will be

• A. \$20
• B. \$120
• C. \$40
• D. \$60
• Correct Answer: Option
B

## Type of distribution, which describes whether events to be occurred are mutually exclusive or collectively exhaustive can be classified as

• A. mutual distribution
• B. probability distribution
• C. collective distribution
• D. marginal distribution
• Correct Answer: Option
B

## If total units of product A, B and C are as 200,300 and 400 respectively then sales mix would be

• A. 100 units
• B. 900 units
• C. 400 units
• D. 500 units
• Correct Answer: Option
B

## If budgeted sales in unit is 50 and breakeven sales in unit is 12, then margin of safety in units will be

• A. 62
• B. 38
• C. 48
• D. 58
• Correct Answer: Option
B

## Fixed cost, and contribution margin percentage for bundle are divided to calculate

• A. breakeven costs
• B. breakeven revenues
• C. breakeven units
• D. breakeven sales
• Correct Answer: Option
B

## If contribution margin is \$3000 and revenues are \$9000, then all variable costs will be

• A. \$12,000
• B. \$6,000
• C. −\$6000
• D. −\$12000
• Correct Answer: Option
B

## If contribution margin is \$3000 and revenues are \$9000, then all variable costs will be

• A. \$12,000
• B. \$6,000
• C. −\$6000
• D. −\$12000
• Correct Answer: Option
B

## Gross margin is \$7000 and revenues are \$16000, then cost of goods sold would be

• A. \$23,000
• B. −\$23000
• C. −\$9000
• D. \$9,000
• Correct Answer: Option
D

## If target net income is \$36000 and tax rate is 40%, then target operating income will be

• A. \$10,000
• B. \$20,000
• C. \$40,000
• D. \$60,000
• Correct Answer: Option
D

## If fixed cost is \$10000, target operating income is \$8000 and contribution margin per unit is \$900, then required units to be sold will be

• A. 45 units
• B. 30 units
• C. 20 units
• D. 52 units
• Correct Answer: Option
C

## If contribution margin is \$72000 and operating income is \$12000, then degree of operating leverage would be

• A. 8
• B. 7
• C. 6
• D. 5
• Correct Answer: Option
C

## Amount of money by which total revenues exceed breakeven revenues is classified as

• A. margin of safety
• B. margin of profit
• C. margin of loss
• D. margin of income
• Correct Answer: Option
A

## Amount of money by which total revenues exceed breakeven revenues is classified as

• A. margin of safety
• B. margin of profit
• C. margin of loss
• D. margin of income
• Correct Answer: Option
A

## If actual result is \$26000, flexible budget amount is \$13000, then flexible budget amount will be

• A. \$39,000
• B. \$49,000
• C. \$13,000
• D. \$15,000
• Correct Answer: Option
C

## Sales budget variance is subtracted from flexible budget amount to calculate

• A. static budget amount
• B. unstated amount
• C. constant amount
• D. variable amount
• Correct Answer: Option
A

## If sales budget variance is \$57000 and flexible budget amount is \$97000, then static budget amount will be

• A. \$40,000
• B. \$154,000
• C. \$164,000
• D. \$124,000
• Correct Answer: Option
A

## Budget which calculates expected revenues and expected costs, based on actual output quantity is named as

• A. flexible budget
• B. fixed budget
• C. variable budget
• D. multiplied budget
• Correct Answer: Option
A

## Difference between flexible budget amount and corresponding static budget amount is classified as

• A. sales revenue variance
• B. cost profit variance
• C. profit volume variance
• D. sales volume variance
• Correct Answer: Option
D

## An actual quantity of cost allocation base is \$56000, budgeted quantity of cost allocation base is \$17000 then variable overhead efficiency variance is

• A. \$39,000
• B. \$49,000
• C. \$59,000
• D. \$73,000
• Correct Answer: Option
A

## An actual quantity of cost allocation base is \$56000, budgeted quantity of cost allocation base is \$17000 then variable overhead efficiency variance is

• A. \$39,000
• B. \$49,000
• C. \$59,000
• D. \$73,000
• Correct Answer: Option
A

## Flexible budget amount is added in to fixed overhead flexible budget variance to calculate

• A. incurred manufacturing
• B. incurred production cost
• C. actual incurred cost
• D. incurred labor cost
• Correct Answer: Option
C

## Flexible budget amount is added in to fixed overhead flexible budget variance to calculate

• A. incurred manufacturing
• B. incurred production cost
• C. actual incurred cost
• D. incurred labor cost
• Correct Answer: Option
C

## To calculate fixed overhead flexible budget variance, an actual incurred cost is subtracted from

• A. flexible budget amount
• B. constant amount
• C. variable amount
• D. production amount
• Correct Answer: Option
A

## If total setup cost is \$35000 and fixed setup cost is \$19000, then variable fixed cost would be

• A. \$16,000
• B. \$54,000
• C. \$64,000
• D. \$74,000
• Correct Answer: Option
A

## An unfavorable volume-production variance is used to measure amount of

• A. fixed setup cost
• B. total setup cost
• C. variable setup cost
• D. total overhead cost
• Correct Answer: Option
A

## An unfavorable volume-production variance is used to measure amount of

• A. fixed setup cost
• B. total setup cost
• C. variable setup cost
• D. total overhead cost
• Correct Answer: Option
A

## Higher plant leasing, higher administrative costs and higher depreciation on equipment and plants are all factors of

• A. favorable spending variance
• B. unfavorable spending variance
• C. favorable price variance
• D. unfavorable price variance
• Correct Answer: Option
B

## If budgeted quantity of output unit is 450 and budgeted overhead fixed cost is \$250, then budgeted fixed overhead output unit will be

• A. \$142,500
• B. \$112,500
• C. \$122,500
• D. \$132,500
• Correct Answer: Option
B

## If variable overhead flexible budget variance is \$37000 and flexible budget amount is \$10000, then actual incurred costs would be

• A. \$27,000
• B. \$25,000
• C. \$47,000
• D. \$57,000
• Correct Answer: Option
C

## Of cost allocation base, difference between actual and budgeted variable overhead cost multiplied by actual quantity for actual output is classified as

• A. variable overhead spending variance
• B. fixed overhead spending variance
• C. constant spending variance
• D. potential spending variance
• Correct Answer: Option
A

## In manufacturing settings, budgeted fixed overhead rate is classified as

• A. production numerator level
• B. production denominator level
• C. production cost level
• D. production fixed level
• Correct Answer: Option
B

## If fixed overhead allocated for actual output units is \$36000 and production volume variance is \$7000, then budgeted fixed overhead will be

• A. \$43,000
• B. \$42,000
• C. \$29,000
• D. \$19,000
• Correct Answer: Option
A

## If fixed setup cost is \$21000 and variable setup cost is \$11000, then setup cost would be

• A. \$12,000
• B. \$15,000
• C. \$10,000
• D. \$32,000
• Correct Answer: Option
D

## Service sector companies include

• A. cellular phone producers
• B. mutual fund companies
• C. radio stations
• D. wholesalers
• Correct Answer: Option
B

## If cost per unit is \$50 and total number of units manufactured in company are 5000, then total manufacturing cost will be

• A. \$220,000
• B. \$232,000
• C. \$250,000
• D. \$25,000
• Correct Answer: Option
C

## Cost computed by dividing total manufacturing cost and total manufactured units is known as

• A. per unit cost
• B. total cost
• C. total indirect cost
• D. total effective cost
• Correct Answer: Option
A

## Cost of product failure, error prevention and appraisals can be classified under

• A. stocking costs
• B. stock-out costs
• C. costs of quality
• D. shrinkage costs
• Correct Answer: Option
C

## Costs associated with storage of finished goods such as spoilage, obsolescence and insurance of goods are classified as

• A. carrying costs
• B. purchasing costs
• C. stock-out costs
• D. ordering costs
• Correct Answer: Option
A

## Costs associated with storage of finished goods such as spoilage, obsolescence and insurance of goods are classified as

• A. carrying costs
• B. purchasing costs
• C. stock-out costs
• D. ordering costs
• Correct Answer: Option
A

## An example of shrinkage costs is

• A. incoming freight
• B. storage costs
• C. insurance
• D. clerical errors
• Correct Answer: Option
D

## If economic order quantity for one year is 15000 packages and demand in units for one year are 1500 units, then number of deliveries in a year will be

• A. 16
• B. 12
• C. 10
• D. 14
• Correct Answer: Option
C

## If required rate of return is 12% and per unit cost of units purchased is \$35, then relevant opportunity cost of capital will be

• A. \$6.20
• B. \$7.20
• C. \$4.20
• D. \$5.20
• Correct Answer: Option
C

## Costs of issuing purchase orders, making of delivery records for tracking payments and costs of inspection of items are classified as

• A. stock-out costs
• B. ordering costs
• C. carrying costs
• D. purchasing costs
• Correct Answer: Option
B

## A document which contains information about materials of specific product, in specific department comes under

• A. costing method
• B. selling method
• C. material acquisition method
• D. none of above
• Correct Answer: Option
C

## Total indirect cost in pool by an actual quantity of cost allocation base is used to calculate

• A. actual manufacturing overhead rate
• B. manufacturing overhead costs
• C. overhead rate
• D. direct rate
• Correct Answer: Option
A

## If an overhead cost of operating a machine is \$500000 for 1000 hours, then cost allocation rate will be

• A. \$1500 per machine hour
• B. \$250 per machine hour
• C. \$500 per machine hour
• D. \$1000 per machine hour
• Correct Answer: Option
C

## In accounting system, a document which consists of all assigned cost for specific job is classified as

• A. job cost record
• B. job cost sheet
• C. source document
• D. both a and b
• Correct Answer: Option
D