MCQOPTIONS
Saved Bookmarks
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.
| 51. |
The selection of target price, understanding customer requirements, improving product designs and use of cross functional teams are considered as aspects of |
| A. | target pricing |
| B. | target costing |
| C. | value engineering |
| D. | all of above |
| Answer» E. | |
| 52. |
When an essential information for calculation of income statement is missing, then the costs that can be considered for this purpose is called |
| A. | expected cost |
| B. | expected revenues |
| C. | irrelevant costs |
| D. | relevant costs |
| Answer» E. | |
| 53. |
The costs that are unavoidable and remain unchanged no matter what done are classified as |
| A. | sunk costs |
| B. | bunked costs |
| C. | unrecorded costs |
| D. | recorded costs |
| Answer» B. bunked costs | |
| 54. |
If the contribution margin per unit is $40 per unit and selling price is $200, then the contribution margin percentage would be |
| A. | 20% |
| B. | 10% |
| C. | 22% |
| D. | 16% |
| Answer» B. 10% | |
| 55. |
The factor, which is largely considered in making or buying decisions is |
| A. | quality of suppliers |
| B. | dependability of suppliers |
| C. | production irrelevancy |
| D. | both a and b |
| Answer» E. | |
| 56. |
If the contribution margin per unit is $1000 and the contribution margin percentage is 25%, then the selling price would be |
| A. | $2,500 |
| B. | $4,000 |
| C. | $3,800 |
| D. | $3,800 |
| Answer» C. $3,800 | |
| 57. |
If the fixed cost is $40000 and the contribution margin per unit is $800 per unit, then the breakeven of units will be |
| A. | 60 units |
| B. | 30 units |
| C. | 50 units |
| D. | 70 units |
| Answer» D. 70 units | |
| 58. |
The book value of existing equipment is a historical cost and not necessary for deciding equipment replacement, thus it can be considered as |
| A. | operating cost |
| B. | sunk cost |
| C. | in-house cost |
| D. | out-house cost |
| Answer» C. in-house cost | |
| 59. |
The cost such as dispose value of an old machine is $6000 is classified as |
| A. | irrelevant |
| B. | depreciated cost |
| C. | salvages |
| D. | relevant |
| Answer» E. | |
| 60. |
An investment of money in idle inventory, in place of investing the same amount of money somewhere else is an example of |
| A. | offshore cost |
| B. | outsource cost |
| C. | in-source cost |
| D. | opportunity cost |
| Answer» E. | |
| 61. |
The major approaches to make decisions about pricing include |
| A. | market based |
| B. | sunk cost |
| C. | cost based |
| D. | both a and c |
| Answer» E. | |
| 62. |
The companies that perform in competitive markets using the pricing approach are known as |
| A. | independent revenue approach |
| B. | market based approach |
| C. | dependent revenue approach |
| D. | cost based approach |
| Answer» C. dependent revenue approach | |
| 63. |
An income, which a company aims to earn by selling each unit of market offering is classified as |
| A. | target operating income per unit |
| B. | target cost per unit |
| C. | total current full cost |
| D. | total cost per unit |
| Answer» B. target cost per unit | |
| 64. |
The kind of cost which on elimination, would not reduce the perceived usefulness that customers can obtain by using the market offering is known as |
| A. | designed-in costs |
| B. | locked-in costs |
| C. | value added cost |
| D. | non-value added cost |
| Answer» E. | |
| 65. |
The companies that perform in less competitive markets and their market offerings significantly differ are classified as |
| A. | independent revenue approach |
| B. | market based approach |
| C. | cost based approach |
| D. | dependent revenue approach |
| Answer» D. dependent revenue approach | |
| 66. |
The technique, which accumulates and tracks revenues 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» C. life cycle costing | |
| 67. |
The process which leads to disassembling and analysis of competitors, operating activities to become acquainted with competitors' technologies is called |
| A. | outsource engineering |
| B. | reverse engineering |
| C. | target engineering |
| D. | off shore engineering |
| Answer» C. target engineering | |
| 68. |
The major influential factors on supply and demand include |
| A. | customers |
| B. | costs |
| C. | competitors |
| D. | all of above |
| Answer» B. costs | |
| 69. |
The formal method of making choices, considering help of quantitative and qualitative analysis is classified as |
| A. | quantitative analysis |
| B. | decision method |
| C. | qualitative method |
| D. | linearity method |
| Answer» C. qualitative method | |
| 70. |
If the contribution margin percentage is 30%, the selling price is $5000, then the contribution margin per unit will be |
| A. | $900 |
| B. | $1,200 |
| C. | $1,500 |
| D. | $1,600 |
| Answer» D. $1,600 | |
| 71. |
The decisions made by company, which products to manufacture and sell and in what quantities, of many product lines are called |
| A. | incremental decisions |
| B. | outsource decisions |
| C. | product mix decisions |
| D. | in-source decisions |
| Answer» D. in-source decisions | |
| 72. |
The products, divisions and customers are the examples of |
| A. | revenue increment |
| B. | reciprocal revenue |
| C. | revenue allocation |
| D. | revenue object |
| Answer» E. | |
| 73. |
If the contribution margin per unit is $700 per unit and the break-even per unit is $40, then the fixed cost would be |
| A. | $35,000 |
| B. | $28,000 |
| C. | $17,500 |
| D. | $82,000 |
| Answer» C. $17,500 | |
| 74. |
The methods used to allocate costs of reciprocal support departments include |
| A. | direct method |
| B. | step down |
| C. | reciprocal method |
| D. | all of above |
| Answer» E. | |
| 75. |
The method which allocates the cost of support department to only operating departments is called |
| A. | indirect method |
| B. | direct method |
| C. | step down method |
| D. | reciprocal method |
| Answer» C. step down method | |
| 76. |
According to incremental method, the party which receives the highest ranking in allocation of common cost is classified as |
| A. | Third incremental party |
| B. | second incremental party |
| C. | primary party |
| D. | First incremental party |
| Answer» D. First incremental party | |
| 77. |
The package which consists of two or more products to be sold for single price, but components of products in package have separate stand-alone price is called |
| A. | step down product |
| B. | dual mix product |
| C. | bundled product |
| D. | reciprocal product |
| Answer» D. reciprocal product | |
| 78. |
If the variable cost per unit is $25 and the quantity of units sold is 5000, then the total variable cost would be |
| A. | $155,000 |
| B. | $125,000 |
| C. | $135,000 |
| D. | $145,000 |
| Answer» C. $135,000 | |
| 79. |
The product costing technique in which markup component is added into cost base, to set a target price is known as |
| A. | market based approach |
| B. | cost incurrence pricing |
| C. | cost plus pricing |
| D. | locked-in cost pricing |
| Answer» D. locked-in cost pricing | |
| 80. |
In cost-plus pricing, the 'plus' refers to a component named as |
| A. | off shore cost |
| B. | markup |
| C. | sunk cost |
| D. | outsource cost |
| Answer» C. sunk cost | |
| 81. |
If the invested capital is $150000 and target rate of return on investment is 16%, then the targeted annual operating income would be |
| A. | $27,000 |
| B. | $26,000 |
| C. | $24,000 |
| D. | $25,000 |
| Answer» D. $25,000 | |
| 82. |
The span time from initial research and development of product till support and customer service, if not offered for that particular product will be called |
| A. | product life cycle |
| B. | life cycle budgeting |
| C. | life cycle costing |
| D. | target costing |
| Answer» B. life cycle budgeting | |
| 83. |
If the selling price is $5000, the contribution margin per unit is $1000, then the contribution margin percentage will be |
| A. | 12% |
| B. | 20% |
| C. | 5% |
| D. | 15% |
| Answer» C. 5% | |
| 84. |
If the contribution margin is $13000, the total variable cost is $7000 then the total revenue will be |
| A. | $6,000 |
| B. | −$6000 |
| C. | $20,000 |
| D. | −$20000 |
| Answer» B. −$6000 | |
| 85. |
If the total revenue is $9000, the total variable cost is $2000, then the contribution margin will be |
| A. | $11,000 |
| B. | −$7000 |
| C. | $4,500 |
| D. | $7,000 |
| Answer» E. | |
| 86. |
If the revenue is $15000, the total variable cost is $5000 and the fixed cost $2000 then the operating income will be |
| A. | $4,000 |
| B. | $8,000 |
| C. | $5,000 |
| D. | $3,000 |
| Answer» C. $5,000 | |
| 87. |
An estimated price, which is expected to be paid by customers for particular market offering is classified as |
| A. | target price |
| B. | target cost |
| C. | outsource price |
| D. | off shore price |
| Answer» B. target cost | |
| 88. |
A particular term for which specific revenue measurement is required is known as |
| A. | revenue allocation |
| B. | revenue object |
| C. | revenue increment |
| D. | reciprocal revenue |
| Answer» C. revenue increment | |
| 89. |
The fourth step in decision making process is |
| A. | linear correlation |
| B. | making decisions |
| C. | implement decisions |
| D. | evaluate performance |
| Answer» C. implement decisions | |
| 90. |
In relevance concepts, the relevant revenues are also termed as |
| A. | parallel revenues |
| B. | abnormal revenues |
| C. | expected future revenues |
| D. | serial revenues |
| Answer» D. serial revenues | |
| 91. |
If the fixed cost is $30000 and the contribution margin per unit is $600 per unit, then the breakeven in units will be |
| A. | 50 units |
| B. | 60 units |
| C. | 70 units |
| D. | 65 units |
| Answer» B. 60 units | |
| 92. |
The fixed cost is divided to contribution margin to calculate |
| A. | breakeven revenue |
| B. | total revenue |
| C. | fixed revenue |
| D. | variable revenue |
| Answer» B. total revenue | |
| 93. |
The first step in decision making process is to |
| A. | identify the problem |
| B. | identify the linear variable |
| C. | identify the certainty |
| D. | identify the multiplier |
| Answer» B. identify the linear variable | |
| 94. |
The third ranked product in incremental revenue-allocation method is known as |
| A. | primary product |
| B. | First incremental product |
| C. | Second incremental product |
| D. | Third incremental product |
| Answer» E. | |
| 95. |
The target price is subtracted from per unit target operating income to calculate |
| A. | total current full cost |
| B. | total cost per unit |
| C. | target operating income per unit |
| D. | target cost per unit |
| Answer» E. | |
| 96. |
The method, which allocates cost of support department for operating departments by recognizing all the mutual services provided is classified as |
| A. | indirect method |
| B. | direct method |
| C. | step down method |
| D. | reciprocal method |
| Answer» E. | |
| 97. |
If break-even number of units are 120 units and the fixed cost is $62000, then the contribution margin per unit will be |
| A. | $74,400 |
| B. | $7,440,000 |
| C. | $516.67 |
| D. | $51,667 |
| Answer» D. $51,667 | |
| 98. |
If the contribution margin per unit is $500 and the contribution margin percentage is 25%, then the selling price will be |
| A. | $2,000 |
| B. | $5,250 |
| C. | $4,280 |
| D. | $3,860 |
| Answer» B. $5,250 | |
| 99. |
The decisions made by team of individuals or single person, whether to outsource the products or in-source are classified as |
| A. | demand or supply decisions |
| B. | make or buy decisions |
| C. | relevant or irrelevant decision |
| D. | idle or busy decisions |
| Answer» C. relevant or irrelevant decision | |
| 100. |
The contribution margin per unit is divided by selling price to calculate |
| A. | fixed margin percentage |
| B. | contribution margin percentage |
| C. | variable margin percentage |
| D. | breakeven margin percentage |
| Answer» C. variable margin percentage | |