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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.
| 101. |
If the fixed cost is $30000, the contribution margin percentage is 40%, then the breakeven revenue will be |
| A. | $120,000 |
| B. | $75,000 |
| C. | $12,000 |
| D. | $175,000 |
| Answer» C. $12,000 | |
| 102. |
If the contribution margin is $12000, the total variable cost is $7000, then the total revenue will be |
| A. | $5,000 |
| B. | −$5000 |
| C. | $19,000 |
| D. | −$19000 |
| Answer» B. −$5000 | |
| 103. |
The contribution margin per unit is multiplied to number of units sold to calculate |
| A. | revenue margin |
| B. | variable margin |
| C. | contribution margin |
| D. | divisor margin |
| Answer» D. divisor margin | |
| 104. |
If the variable cost is $50000 and the fixed cost is $30000, then the operating income would be |
| A. | $80,000 |
| B. | $160,000 |
| C. | $16,000 |
| D. | $20,000 |
| Answer» E. | |
| 105. |
The variable cost per unit is multiplied to the quantity of sold units to calculate |
| A. | per unit cost |
| B. | variable cost |
| C. | fixed cost |
| D. | multiple cost |
| Answer» C. fixed cost | |
| 106. |
Support department cost allocation method which makes no difference between variable and fixed costs is classified as |
| A. | sales mix allocation method |
| B. | dual-rate cost-allocation method |
| C. | single rate cost allocation method |
| D. | quantity variance allocation method |
| Answer» D. quantity variance allocation method | |
| 107. |
The variable cost is subtracted from fixed costs to calculate |
| A. | unit income |
| B. | fixed income |
| C. | operating income |
| D. | marginal income |
| Answer» D. marginal income | |
| 108. |
An example of quantitative factor is |
| A. | employee behavior at workplace |
| B. | employee satisfaction |
| C. | employee morale |
| D. | cost of materials |
| Answer» E. | |
| 109. |
If the employees of division A work for 8000 hours for $90 per hour, then the rate must be paid in division B in accordance of single rate method will be |
| A. | $90 per hour |
| B. | less than $90 per hour |
| C. | greater than $90 per hour |
| D. | none of above |
| Answer» B. less than $90 per hour | |
| 110. |
The costs which are related to different functions of the value chain of company, such as marketing and manufacturing costs are considered as |
| A. | value costs |
| B. | future function costs |
| C. | business function costs |
| D. | sunk function costs |
| Answer» D. sunk function costs | |
| 111. |
The costs, which consist of interdepartmental cost allocations plus cost of support department are classified as |
| A. | complete reciprocal costs |
| B. | artificial costs |
| C. | operating costs |
| D. | flexible operating costs |
| Answer» B. artificial costs | |
| 112. |
The cost of new machine is considered as |
| A. | relevant |
| B. | bunk |
| C. | dispose value |
| D. | sunk |
| Answer» B. bunk | |
| 113. |
If the flexible budget amount is $40000 and variable overhead flexible budget variance is $25000, then actual costs incur will be |
| A. | $15,000 |
| B. | $35,000 |
| C. | $65,000 |
| D. | $75,000 |
| Answer» D. $75,000 | |
| 114. |
When the fixed cost is divided into contribution margin per unit, it gives |
| A. | fixed output |
| B. | variable output |
| C. | breakeven number of units |
| D. | total number of units |
| Answer» D. total number of units | |
| 115. |
The forgone contribution of resources, into the revenues because of not using the resources, in next best use is classified as |
| A. | in-source cost |
| B. | opportunity cost |
| C. | offshore cost |
| D. | outsource cost |
| Answer» C. offshore cost | |
| 116. |
The method which divides the support department cost into two dimensions such as fixed and variable cost pool is classified as |
| A. | sales mix allocation method |
| B. | dual-rate cost-allocation method |
| C. | single rate cost allocation method |
| D. | quantity variance allocation method |
| Answer» C. single rate cost allocation method | |
| 117. |
The systematic evaluation of value chain, to reduce costs and high quality, to achieve satisfied customers is known as |
| A. | reverse engineering |
| B. | value engineering |
| C. | target engineering |
| D. | operation engineering |
| Answer» C. target engineering | |
| 118. |
The depreciation on plant equipment, salaries of plant managers and plant leasing costs are considered a |
| A. | fixed batch cost |
| B. | variable batch cost |
| C. | variable overhead cost |
| D. | fixed overhead cost |
| Answer» E. | |
| 119. |
If the fixed cost is $50000 and the contribution margin percentage is 20%, then the breakeven revenue will be |
| A. | $100,000 |
| B. | $150,000 |
| C. | $250,000 |
| D. | $225,000 |
| Answer» D. $225,000 | |
| 120. |
The third step in decision making process is |
| A. | linear predictions |
| B. | dependent predictions |
| C. | making predictions |
| D. | independent predictions |
| Answer» D. independent predictions | |
| 121. |
The contribution per unit is $1200 and the number of units sold is $80, then the contribution margin would be |
| A. | $9,650 |
| B. | $96,000 |
| C. | $15 |
| D. | $9,600 |
| Answer» C. $15 | |
| 122. |
If the contribution per unit is $900 and the number of units sold is $70, then the contribution margin will be |
| A. | $97,000 |
| B. | $83,000 |
| C. | $63,000 |
| D. | $12,860 |
| Answer» D. $12,860 | |
| 123. |
The method which ranks cost object incurred by individual users, in ranking order of more responsible users is classified as |
| A. | bundled products allocation method |
| B. | variable cost allocation method |
| C. | stand-alone cost allocation method |
| D. | incremental cost allocation method |
| Answer» E. | |
| 124. |
In incremental cost allocation method, the cost object user who is ranked second in ranking order is known as |
| A. | First incremental user |
| B. | primary user |
| C. | secondary user |
| D. | second incremental user |
| Answer» B. primary user | |
| 125. |
An energy, machine maintenance, indirect materials and engineering support are considered as |
| A. | variable overhead cost |
| B. | fixed overhead cost |
| C. | fixed batch cost |
| D. | variable batch cost |
| Answer» B. fixed overhead cost | |
| 126. |
The selling price is multiplied to quantity of sold units to calculate |
| A. | revenues |
| B. | sold quantity |
| C. | sold price |
| D. | bulk price |
| Answer» B. sold quantity | |
| 127. |
The department which directly adds value to product or service is known as |
| A. | production department |
| B. | operating department |
| C. | allocation base department |
| D. | both a and b |
| Answer» E. | |
| 128. |
If the selling price is $20 and the number of units sold are 800, then the revenue is equal to |
| A. | $16,000 |
| B. | $40,000 |
| C. | $25,000 |
| D. | $35,700 |
| Answer» B. $40,000 | |
| 129. |
An estimated cost per unit in long run, which enables the company to achieve it's per unit target, operating income 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» C. total current full cost | |
| 130. |
At the break-even point, an operating income must be equal to |
| A. | $3,000 |
| B. | $2,000 |
| C. | $1,000 |
| D. | zero |
| Answer» E. | |
| 131. |
In a relevant range, the variable cost per unit, selling price and total fixed costs are |
| A. | unknown and variable |
| B. | known and variable |
| C. | unknown and constant |
| D. | known and constant |
| Answer» E. | |
| 132. |
The cost object user, who is ranked first in incremental cost allocation method is known as |
| A. | First incremental user |
| B. | primary user |
| C. | secondary user |
| D. | second incremental user |
| Answer» C. secondary user | |
| 133. |
In stand-alone revenue-allocation method, the type of weights available for this method are |
| A. | selling prices as weights |
| B. | unit costs as weights |
| C. | physical units as weights |
| D. | all of above |
| Answer» E. | |
| 134. |
The contribution margin per unit is divided by contribution margin percentage to calculate |
| A. | percentage price |
| B. | margin price |
| C. | contribute price |
| D. | selling price |
| Answer» E. | |
| 135. |
The costs that behaves as irrelevant costs in process of decision making are classified as |
| A. | past costs |
| B. | future costs |
| C. | expected costs |
| D. | sunk costs |
| Answer» B. future costs | |
| 136. |
The method, which allocates the cost of support department, to operating and support departments is known as |
| A. | indirect method |
| B. | direct method |
| C. | step down method |
| D. | reciprocal method |
| Answer» D. reciprocal method | |
| 137. |
The method, which uses specific information on products as weights to allocate bundled revenues for each product in bundle is classified as |
| A. | step down allocation method |
| B. | stand-alone revenue allocation method |
| C. | incremental revenue allocation method |
| D. | revenue mix allocation method |
| Answer» C. incremental revenue allocation method | |
| 138. |
The contribution margin per unit is $500 per unit and the breakeven per unit is $35, then the fixed cost would be |
| A. | $13,500 |
| B. | $14,280 |
| C. | $18,500 |
| D. | $17,500 |
| Answer» E. | |
| 139. |
The practice of seller to charge higher price for same market offering is classified as |
| A. | peak-load pricing |
| B. | elastic pricing |
| C. | elastic demand |
| D. | inelastic demand |
| Answer» B. elastic pricing | |
| 140. |
In the process of examining, occurred changes in total revenues, operating income and costs is known as |
| A. | revenue analysis |
| B. | costs analysis |
| C. | operating income analysis |
| D. | cost volume profit analysis |
| Answer» E. | |
| 141. |
If the contribution margin per unit is $800 and the selling price is $20000, then the contribution margin percentage will be |
| A. | 17% |
| B. | 14% |
| C. | 4% |
| D. | 25% |
| Answer» D. 25% | |
| 142. |
The practice by seller, about offering same product at different prices, to the different customers is known as |
| A. | price incurrence |
| B. | price discrimination |
| C. | price targeting |
| D. | price engineering |
| Answer» C. price targeting | |
| 143. |
The pricing method used by services companies, such as home repair services, architectural firms and automobile repair services is known as |
| A. | product life cycle method |
| B. | life cycle budgeting method |
| C. | life cycle costing method |
| D. | time and material method |
| Answer» E. | |
| 144. |
If cost is eliminated, then reducing the perceived usefulness that customers can obtain by using the market offering will come under |
| A. | designed-in costs |
| B. | locked-in costs |
| C. | value added cost |
| D. | non-value added cost |
| Answer» D. non-value added cost | |
| 145. |
The total cost incur by customer to use, acquire, maintain and dispose service or product is classified as |
| A. | budgeted life cycle |
| B. | targeted life cycle |
| C. | customer life cycle |
| D. | operating life cycle |
| Answer» D. operating life cycle | |
| 146. |
If total production is 25000 units and target annual operating income is $300000, then target operating income per unit would be |
| A. | $15 |
| B. | $12 |
| C. | $16 |
| D. | $18 |
| Answer» C. $16 | |