Cost Accounting MCQs

Option A: unadjusted allocation rate approach

Option B: adjusted budget rate approach

Option C: unadjusted budget rate approach

Option D: adjusted allocation rate approach

Correct Answer: adjusted allocation rate approach ✔

Option A: actual manufacturing overhead rate

Option B: manufacturing overhead costs

Option C: overhead rate

Option D: direct rate

Correct Answer: actual manufacturing overhead rate ✔

Option A: under applied indirect cost

Option B: under absorbed indirect cost

Option C: absorbed indirect cost

Option D: both a and b

Correct Answer: both a and b ✔

Option A: 15.67 per piece

Option B: 16.67 per piece

Option C: 14.67 per piece

Option D: 13.67 per piece

Correct Answer: 16.67 per piece ✔

Option A: costing method

Option B: selling method

Option C: material acquisition method

Option D: none of above

Correct Answer: material acquisition method ✔

Option A: expected total direct labor cost

Option B: budgeted total direct labor cost

Option C: budgeted total indirect labor cost

Option D: expected labor hours

Correct Answer: budgeted total direct labor cost ✔

Option A: budgeted indirect labor cost rate

Option B: expected direct labor cost rate

Option C: budgeted direct labor cost rate

Option D: expected indirect labor cost rate

Correct Answer: budgeted direct labor cost rate ✔

Option A: applied indirect cost

Option B: applied direct cost

Option C: incurred indirect cost

Option D: over allocated indirect cost

Correct Answer: over allocated indirect cost ✔

Option A: expected indirect cost rate

Option B: expected direct cost rate

Option C: budgeted indirect cost rate

Option D: budgeted direct cost rate

Correct Answer: budgeted indirect cost rate ✔

Option A: sale costing system

Option B: job costing system

Option C: price costing system

Option D: process costing system

Correct Answer: process costing system ✔

Option A: proration approach

Option B: appreciation approach

Option C: depreciation approach

Option D: adjusted approach

Correct Answer: proration approach ✔

Option A: cost document

Option B: priced document

Option C: source document

Option D: direct document

Correct Answer: source document ✔

Option A: $48,000

Option B: −$2000

Option C: $2,000

Option D: −$48000

Correct Answer: $2,000 ✔

Option A: unadjusted budget rate approach

Option B: adjusted allocation rate approach

Option C: unadjusted allocation rate approach

Option D: adjusted budget rate approach

Correct Answer: adjusted allocation rate approach ✔

Option A: manufacturing overhead applied

Option B: labor overhead applied

Option C: cost overhead applied

Option D: budget overhead applied

Correct Answer: manufacturing overhead applied ✔

Option A: $60

Option B: $90

Option C: $80

Option D: $70

Correct Answer: $90 ✔

Option A: over allocated budget

Option B: under allocated budget

Option C: under allocated indirect cost

Option D: over allocated direct cost

Correct Answer: under allocated indirect cost ✔

Option A: job cost record

Option B: job cost sheet

Option C: source document

Option D: both a and b

Correct Answer: both a and b ✔

Option A: cost

Option B: job

Option C: post

Option D: price

Correct Answer: job ✔

Option A: per unit cost

Option B: per post cost

Option C: per price cost

Option D: application cost

Correct Answer: per unit cost ✔

Option A: direct pool

Option B: cost pool

Option C: indirect pool

Option D: item pool

Correct Answer: cost pool ✔

Option A: incurred indirect cost

Option B: over allocated indirect cost

Option C: applied indirect cost

Option D: applied direct cost

Correct Answer: over allocated indirect cost ✔

Option A: cost allocation

Option B: sales tracing

Option C: sales allocation

Option D: cost tracing

Correct Answer: cost allocation ✔

Option A: relevant total costs

Option B: contribution costs

Option C: throughput costs

Option D: optimized costs

Correct Answer: relevant total costs ✔

Option A: carrying costs

Option B: relevant total costs

Option C: economic order quantity

Option D: reorder point

Correct Answer: reorder point ✔

Option A: relevant carrying cost

Option B: relevant ordering cost

Option C: purchase order lease time

Option D: number of purchase orders

Correct Answer: purchase order lease time ✔

Option A: chaining point

Option B: recording point

Option C: lead point

Option D: trigger point

Correct Answer: trigger point ✔

Option A: in-time costing

Option B: trigger costing

Option C: back flush costing

Option D: lead time costing

Correct Answer: back flush costing ✔

Option A: purchase order costs

Option B: relevant inventory carrying costs

Option C: irrelevant inventory carrying costs

Option D: relevant ordering costs

Correct Answer: relevant inventory carrying costs ✔

Option A: annual irrelevant ordering costs

Option B: annual relevant carrying costs

Option C: annual relevant ordering costs

Option D: annual irrelevant carrying costs

Correct Answer: annual relevant carrying costs ✔

Option A: $200

Option B: $190

Option C: $160

Option D: $180

Correct Answer: $180 ✔

Option A: supply chain

Option B: value chain

Option C: material flow chain

Option D: manufacturing flow chain

Correct Answer: supply chain ✔

Option A: irrelevant inventory carrying costs

Option B: relevant opportunity cost of capital

Option C: relevant purchase order costs

Option D: relevant inventory carrying costs

Correct Answer: relevant opportunity cost of capital ✔

Option A: stocking costs

Option B: stock-out costs

Option C: costs of quality

Option D: shrinkage costs

Correct Answer: costs of quality ✔

Option A: $5,000

Option B: $4,500

Option C: $5,500

Option D: $6,000

Correct Answer: $5,000 ✔

Option A: incoming freight

Option B: storage costs

Option C: insurance

Option D: spoilage

Correct Answer: insurance ✔

Option A: 678 packages

Option B: 648 packages

Option C: 658 packages

Option D: 668 packages

Correct Answer: 648 packages ✔

Option A: decisional management

Option B: throughput management

Option C: inventory management

Option D: manufacturing management

Correct Answer: inventory management ✔

Option A: stock-out costs

Option B: ordering costs

Option C: carrying costs

Option D: purchasing costs

Correct Answer: purchasing costs ✔

Option A: relevant purchase order costs

Option B: relevant inventory carrying costs

Option C: irrelevant inventory carrying costs

Option D: relevant opportunity cost of capital

Correct Answer: relevant opportunity cost of capital ✔

Option A: $7,500

Option B: $7,000

Option C: $6,500

Option D: $6,000

Correct Answer: $7,500 ✔

Option A: annual irrelevant ordering costs

Option B: annual relevant carrying costs

Option C: annual relevant ordering costs

Option D: annual irrelevant carrying costs

Correct Answer: annual relevant ordering costs ✔

Option A: economic accounting

Option B: back-flush accounting

Option C: lean accounting

Option D: lead accounting

Correct Answer: lean accounting ✔

Option A: 14000 units

Option B: 14500 units

Option C: 15000 units

Option D: 15500 units

Correct Answer: 14000 units ✔

Option A: stock-out costs

Option B: ordering costs

Option C: carrying costs

Option D: purchasing costs

Correct Answer: ordering costs ✔

Option A: economic order quantity purchasing

Option B: annual purchasing

Option C: just in time purchasing

Option D: both a and b

Correct Answer: just in time purchasing ✔

Option A: $6.20

Option B: $7.20

Option C: $4.20

Option D: $5.20

Correct Answer: $4.20 ✔

Option A: efficient order quantity

Option B: economic order quantity

Option C: rational order quantity

Option D: optimized order quantity

Correct Answer: economic order quantity ✔

Option A: 16

Option B: 12

Option C: 10

Option D: 14

Correct Answer: 10 ✔

Option A: in-time production

Option B: materials requirement planning

Option C: on-time production

Option D: pull strategy of production

Correct Answer: materials requirement planning ✔

Option A: incoming freight

Option B: storage costs

Option C: insurance

Option D: clerical errors

Correct Answer: clerical errors ✔

Option A: $9,650

Option B: $2,350

Option C: $3,750

Option D: $2,750

Correct Answer: $3,750 ✔

Option A: carrying costs

Option B: purchasing costs

Option C: stock-out costs

Option D: ordering costs

Correct Answer: carrying costs ✔

Option A: back-flush trails

Option B: audit trails

Option C: trigger trails

Option D: lead manufacturing trails

Correct Answer: audit trails ✔

Option A: $240,000.00

Option B: $320,000

Option C: $210,000

Option D: $420,000

Correct Answer: $420,000 ✔

Option A: $80

Option B: $65

Option C: $7

Option D: $35

Correct Answer: $80 ✔

Option A: $220,000

Option B: $232,000

Option C: $250,000

Option D: $25,000

Correct Answer: $250,000 ✔

Option A: relevant range

Option B: irrelevant range

Option C: cause range

Option D: effective range

Correct Answer: relevant range ✔

Option A: manufacturing sector companies

Option B: merchandising sector companies

Option C: service sector companies

Option D: raw material companies

Correct Answer: manufacturing sector companies ✔

Option A: food processing companies

Option B: automotive companies

Option C: distribution companies

Option D: advertising agencies

Correct Answer: distribution companies ✔

Option A: distribution companies

Option B: textile companies

Option C: retailing companies

Option D: internet service providers

Correct Answer: textile companies ✔

Option A: $40

Option B: $20

Option C: $60

Option D: $80

Correct Answer: $20 ✔

Option A: cellular phone producers

Option B: mutual fund companies

Option C: radio stations

Option D: wholesalers

Correct Answer: mutual fund companies ✔

Option A: manufacturing sector companies

Option B: merchandising sector companies

Option C: service sector companies

Option D: raw material companies

Correct Answer: service sector companies ✔

Option A: service sector companies

Option B: raw material companies

Option C: manufacturing sector companies

Option D: merchandising sector companies

Correct Answer: merchandising sector companies ✔

Option A: finished goods inventory

Option B: indirect material inventory

Option C: direct materials inventory

Option D: work in process inventory

Correct Answer: direct materials inventory ✔

Option A: per unit cost

Option B: total cost

Option C: total indirect cost

Option D: total effective cost

Correct Answer: per unit cost ✔

Option A: direct materials inventory

Option B: work in process inventory

Option C: finished goods inventory

Option D: indirect material inventory

Correct Answer: indirect material inventory ✔

Option A: priced budget

Option B: exceeding budget

Option C: fixed budget

Option D: variable budget

Correct Answer: exceeding budget ✔

Option A: $660,500

Option B: $560,500

Option C: $460,500

Option D: $360,500

Correct Answer: $360,500 ✔

Option A: choose the budgeting period

Option B: select allocation bases

Option C: identify variable overhead cost

Option D: compute the per unit rate

Correct Answer: choose the budgeting period ✔

Option A: $34,000

Option B: $24,000

Option C: $16,000

Option D: $18,000

Correct Answer: $34,000 ✔

Option A: potential budget response

Option B: potential management response

Option C: potential price response

Option D: potential cost response

Correct Answer: potential management response ✔

Option A: incurred manufacturing

Option B: incurred production cost

Option C: actual incurred cost

Option D: incurred labor cost

Correct Answer: actual incurred cost ✔

Option A: $38,500

Option B: $48,500

Option C: $58,500

Option D: $13,500

Correct Answer: $38,500 ✔

Option A: $57.21 per unit

Option B: $67.21 per unit

Option C: $77.21 per unit

Option D: $87.21 per unit

Correct Answer: $57.21 per unit ✔

Option A: actual cost incurred

Option B: fixed cost incurred

Option C: variable cost incurred

Option D: manufacturing cost incurred

Correct Answer: actual cost incurred ✔

Option A: $20,000

Option B: $34,000

Option C: $44,000

Option D: $35,000

Correct Answer: $44,000 ✔

Option A: $43,000

Option B: $42,000

Option C: $29,000

Option D: $19,000

Correct Answer: $43,000 ✔

Option A: fixed overhead efficiency variance

Option B: variable overhead efficiency variance

Option C: variable overhead manufacturing variance

Option D: fixed overhead manufacturing variance

Correct Answer: variable overhead efficiency variance ✔

Option A: unchanged price

Option B: unchanged cost

Option C: fixed overhead cost

Option D: variable overhead cost

Correct Answer: fixed overhead cost ✔

Option A: choose the budgeting period

Option B: select allocation bases

Option C: identify variable overhead cost

Option D: compute the per unit rate

Correct Answer: identify variable overhead cost ✔

Option A: $31,800

Option B: $12,300

Option C: $12,200

Option D: $41,800

Correct Answer: $12,200 ✔

Option A: $83.17

Option B: $73.17

Option C: $53.17

Option D: $63.17

Correct Answer: $53.17 ✔

Option A: identify variable overhead cost

Option B: compute the per unit rate

Option C: choose the budgeting period

Option D: select allocation bases

Correct Answer: compute the per unit rate ✔

Option A: $27,000

Option B: $25,000

Option C: $47,000

Option D: $57,000

Correct Answer: $47,000 ✔

Option A: favorable volume variance

Option B: profit volume variance

Option C: cost volume variance

Option D: production volume variance

Correct Answer: production volume variance ✔

Option A: variable batch costs

Option B: fixed batch costs

Option C: variable setup costs

Option D: fixed setup costs

Correct Answer: variable setup costs ✔

Option A: activity based costing

Option B: non-financial costing

Option C: profit costing

Option D: lump sum costing

Correct Answer: activity based costing ✔

Option A: non-financial measures

Option B: financial measures

Option C: effective measure

Option D: lump sum measure

Correct Answer: financial measures ✔

Option A: favorable spending variance

Option B: unfavorable spending variance

Option C: favorable price variance

Option D: unfavorable price variance

Correct Answer: favorable spending variance ✔

Option A: favorable price variance

Option B: unfavorable price variance

Option C: favorable spending variance

Option D: unfavorable spending variance

Correct Answer: favorable spending variance ✔

Option A: cause for exceeding budget

Option B: cause of less employment

Option C: fixed cost variation

Option D: variable cost variation

Correct Answer: cause for exceeding budget ✔

Option A: $182,500

Option B: $152,500

Option C: $162,500

Option D: $172,500

Correct Answer: $152,500 ✔

Option A: $16,000

Option B: $54,000

Option C: $64,000

Option D: $74,000

Correct Answer: $16,000 ✔

Option A: efficiency variance

Option B: unfavorable variance

Option C: production volume variance

Option D: favorable variance

Correct Answer: efficiency variance ✔

Option A: flexible budget amount

Option B: constant amount

Option C: variable amount

Option D: production amount

Correct Answer: flexible budget amount ✔

Option A: $16,000

Option B: $12,000

Option C: $18,000

Option D: $21,000

Correct Answer: $12,000 ✔

Option A: budget variance

Option B: production volume variance

Option C: price volume variance

Option D: cost volume variance

Correct Answer: production volume variance ✔

Option A: identify variable overhead cost

Option B: compute the per unit rate

Option C: choose the budgeting period

Option D: select allocation bases

Correct Answer: select allocation bases ✔