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MCQOPTIONS
This section includes 146 Mcqs, each offering curated multiple-choice questions to sharpen your Cost Accounting knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
The quantity of manufactured goods are sold at which the total cost equal, is known as |
| A. | breakeven point |
| B. | cost point |
| C. | revenue point |
| D. | quantity point |
| Answer» B. cost point | |
| 2. |
The first ranked product, in incremental revenue allocation method, is classified as |
| A. | primary product |
| B. | First incremental product |
| C. | Second incremental product |
| D. | Third incremental product |
| Answer» B. First incremental product | |
| 3. |
Buying of goods or services from suppliers or vendors of some other country instead of local supplier is classified as |
| A. | outsourcing |
| B. | insourcing |
| C. | idle sourcing |
| D. | sunk sourcing |
| Answer» B. insourcing | |
| 4. |
The difference between variable cost per unit and the selling price can be classified as |
| A. | contribution margin per unit |
| B. | variable margin per unit |
| C. | selling margin per unit |
| D. | sale per unit |
| Answer» B. variable margin per unit | |
| 5. |
The difference that exists between total revenues, can be earned from two different alternatives is termed as |
| A. | independent revenue |
| B. | incremental revenue |
| C. | differential revenue |
| D. | dependent revenue |
| Answer» D. dependent revenue | |
| 6. |
An amount of additional cost incurred for any particular activity is classified as |
| A. | incremental cost |
| B. | differential cost |
| C. | dependent cost |
| D. | independent cost |
| Answer» B. differential cost | |
| 7. |
The cost allocation base used by an operating manager is classified as |
| A. | machine hours |
| B. | flexible hours |
| C. | variable hours |
| D. | fixed hours |
| Answer» B. flexible hours | |
| 8. |
In broader categories, the outcomes of decisions are classified as |
| A. | sunk factors |
| B. | quantitative factors |
| C. | qualitative factors |
| D. | both b and c |
| Answer» E. | |
| 9. |
An example of qualitative factor is |
| A. | employee morale |
| B. | cost of materials |
| C. | cost of workers |
| D. | cost of marketing |
| Answer» B. cost of materials | |
| 10. |
The second ranked product in incremental revenue allocation method is termed as |
| A. | primary product |
| B. | First incremental product |
| C. | Second incremental product |
| D. | Third incremental product |
| Answer» C. Second incremental product | |
| 11. |
The type of outcomes, which can never be measured in numerical terms in books of accounts are classified as |
| A. | expected factors |
| B. | recorded factors |
| C. | qualitative factors |
| D. | quantitative factors |
| Answer» D. quantitative factors | |
| 12. |
The method of revenue allocation, which ranks products included in bundle according to predetermined criteria of management is known as |
| A. | step down allocation method |
| B. | stand-alone revenue allocation method |
| C. | incremental revenue allocation method |
| D. | revenue mix allocation method |
| Answer» D. revenue mix allocation method | |
| 13. |
A company must eliminate all those activities that do not add value to all the products or services in planning of |
| A. | variable overhead cost |
| B. | fixed overhead cost |
| C. | fixed batch cost |
| D. | variable batch cost |
| Answer» B. fixed overhead cost | |
| 14. |
The process in which earned revenue is related to specific revenue object, which can cannot trace it in cost effective way is known as |
| A. | revenue allocation |
| B. | revenue object |
| C. | revenue increment |
| D. | reciprocal revenue |
| Answer» B. revenue object | |
| 15. |
The second step in decision making process is |
| A. | multi-collinearity information |
| B. | quantitative information |
| C. | qualitative analysis |
| D. | obtaining information |
| Answer» E. | |
| 16. |
In incremental cost allocation method, the cost object user who is ranked third in ranking order is classified as |
| A. | First incremental user |
| B. | primary user |
| C. | secondary user |
| D. | second incremental user |
| Answer» E. | |
| 17. |
If the contribution margin percentage is 20% and the selling price is $4000, then contribution margin per unit will be |
| A. | $200 |
| B. | $400 |
| C. | $600 |
| D. | $800 |
| Answer» E. | |
| 18. |
The financial factors measured in numerical terms, having some monetary value are considered as |
| A. | qualitative factors |
| B. | quantitative factors |
| C. | expected factors |
| D. | recorded factors |
| Answer» C. expected factors | |
| 19. |
The kind of costs that has been occurred in past are also known as |
| A. | unrecorded costs |
| B. | recorded costs |
| C. | sunk costs |
| D. | bunked costs |
| Answer» D. bunked costs | |
| 20. |
The cost of operating activity, facility or any cost object which usually shares by two or more than two users is classified as |
| A. | bundled cost |
| B. | common cost |
| C. | stand-alone cost |
| D. | incremental cost |
| Answer» C. stand-alone cost | |
| 21. |
The method which determines weights of cost allocation by considering cost of each user, as separate entity is known as |
| A. | bundled products allocation method |
| B. | variable cost allocation method |
| C. | stand-alone cost allocation method |
| D. | incremental cost allocation method |
| Answer» D. incremental cost allocation method | |
| 22. |
The costs such as book value of old machines are $25000 can be a classified as an example of |
| A. | salvages |
| B. | relevant |
| C. | irrelevant |
| D. | depreciated cost |
| Answer» D. depreciated cost | |
| 23. |
In today's global world, an outsourcing of products or services from lower cost countries is classified as |
| A. | differential in-sourcing |
| B. | off-shoring |
| C. | incremental outsourcing |
| D. | differential outsourcing |
| Answer» C. incremental outsourcing | |
| 24. |
The difference between actual variable overhead cost and flexible budget variable overhead amount is termed as |
| A. | overhead flexible budget variance |
| B. | overhead fixed budget variance |
| C. | overhead flexible cost variance |
| D. | overhead flexible price variance |
| Answer» B. overhead fixed budget variance | |
| 25. |
In manufacturing companies, the revenue and cost drivers are categorized under |
| A. | variable costs |
| B. | costs of goods sold |
| C. | number of units sold |
| D. | all of above |
| Answer» D. all of above | |
| 26. |
The contribution margin per unit is divided by the selling price of the product to calculate |
| A. | selling margin percentage |
| B. | cost margin percentage |
| C. | discount percentage |
| D. | contribution margin percentage |
| Answer» E. | |
| 27. |
In the standard costing, the standard quantity allocation is multiplied to standard overhead rates for allocating |
| A. | flexible costs |
| B. | variable costs |
| C. | overhead costs |
| D. | fixed costs |
| Answer» D. fixed costs | |
| 28. |
The department which provides assisting services to internal departments is classified as |
| A. | supply department |
| B. | support department |
| C. | production department |
| D. | allocation base department |
| Answer» C. production department | |
| 29. |
The costing technique, which traces direct costs by multiplying price rate for producing actual outputs is known as |
| A. | constant costing |
| B. | standard costing |
| C. | unit costing |
| D. | batch costing |
| Answer» C. unit costing | |
| 30. |
If the selling price is $2000 and the contribution margin per unit is $800, then the contribution margin percentage would be |
| A. | $14,000 |
| B. | $25,700 |
| C. | $16,000 |
| D. | $25,000 |
| Answer» B. $25,700 | |
| 31. |
Considering dual rate method, if employees work for 8500 budgeted hours at $120 per hour, and work for 9500 actual hours at $110 per hour, then the total cost would be |
| A. | $2,078,000 |
| B. | $3,078,000 |
| C. | $2,065,000 |
| D. | $3,065,000 |
| Answer» D. $3,065,000 | |
| 32. |
The approaches to allocate costs of support department do not include |
| A. | sales mix allocation method |
| B. | dual-rate cost-allocation method |
| C. | single rate cost allocation method |
| D. | both b and c |
| Answer» E. | |
| 33. |
If the contribution margin is $15000 and the units sold are 500 units, then the contribution margin per unit would be |
| A. | $20 per unit |
| B. | $30 per unit |
| C. | $50 per unit |
| D. | $40 per unit |
| Answer» C. $50 per unit | |
| 34. |
As compared to irrelevant cost, the occurrence of relevant costs must |
| A. | have high correlation |
| B. | be in future |
| C. | be in past |
| D. | be zero correlated |
| Answer» C. be in past | |
| 35. |
The budget, which highlights the difference between actual quantity and budgeted quantity is termed as |
| A. | actual cost budget |
| B. | flexible budget variance |
| C. | inflexible budget |
| D. | hourly budget |
| Answer» C. inflexible budget | |
| 36. |
The relevant costs are classified in relevance concepts as |
| A. | expected future costs |
| B. | serial costs |
| C. | parallel costs |
| D. | abnormal costs |
| Answer» B. serial costs | |
| 37. |
The low level managers in organizations are to make decisions about |
| A. | net income irrelevancy |
| B. | operating income maximization |
| C. | operating income minimization |
| D. | operating income relevancy |
| Answer» C. operating income minimization | |
| 38. |
The difference of cost, which occurs while considering the alternatives can be classified as |
| A. | dependent cost |
| B. | independent cost |
| C. | incremental cost |
| D. | differential cost |
| Answer» E. | |
| 39. |
The flexible budget amount is added in to variable overhead flexible budget variance to calculate |
| A. | manufacturing costs incurred |
| B. | variable costs incurred |
| C. | fixed costs incurred |
| D. | actual costs incurred |
| Answer» E. | |
| 40. |
If the break-even number of units are 200 units and the fixed cost is $80000, then the contribution margin per unit will be |
| A. | $400 |
| B. | $600 |
| C. | $800 |
| D. | $1,000 |
| Answer» B. $600 | |
| 41. |
The production of goods or services that can be bought from outside suppliers is classified as |
| A. | idle sourcing |
| B. | sunk sourcing |
| C. | outsourcing |
| D. | in-sourcing |
| Answer» E. | |
| 42. |
The type of outcomes that can be measured in numerical terms are classified as |
| A. | qualitative factors |
| B. | quantitative factors |
| C. | expected factors |
| D. | recorded factors |
| Answer» C. expected factors | |
| 43. |
If the total revenue is $10000 and the total variable cost is $4000, then the contribution margin would be |
| A. | $25,000 |
| B. | $14,000 |
| C. | $6,000 |
| D. | $8,400 |
| Answer» C. $6,000 | |
| 44. |
The total revenues is subtracted from total variable costs to calculate |
| A. | revenue margin |
| B. | variable margin |
| C. | contribution margin |
| D. | divisor margin |
| Answer» D. divisor margin | |
| 45. |
If the cost base is $350 and the markup component is 11% then prospective selling price will be |
| A. | 388.5 |
| B. | 350 |
| C. | 362 |
| D. | 368.5 |
| Answer» B. 350 | |
| 46. |
The costs that are planned in future and has not been incurred are known as |
| A. | designed-in costs |
| B. | locked-in costs |
| C. | value added cost |
| D. | both a and b |
| Answer» B. locked-in costs | |
| 47. |
A technique, which accumulates and tracks the costs of business function in value chain attributed to each market, offering from R&D; to final customer support, is called |
| A. | product life cycle |
| B. | life cycle budgeting |
| C. | life cycle costing |
| D. | target costing |
| Answer» D. target costing | |
| 48. |
The target annual operating income is divided with invested capital to calculate |
| A. | target rate of return on investment |
| B. | operating income per unit |
| C. | operating cost per unit |
| D. | cost of goods sold |
| Answer» B. operating income per unit | |
| 49. |
An insensitivity of demand in relevance to change in price will be called |
| A. | demand elasticity |
| B. | price elasticity |
| C. | price inelasticity |
| D. | demand inelasticity |
| Answer» E. | |
| 50. |
The concept, which states that resources are used to meet particular goals is |
| A. | cost incurrence |
| B. | valued incurrence |
| C. | locked incurrence |
| D. | non valued incurrence |
| Answer» B. valued incurrence | |