Cost Accounting MCQs
Cost Accounting MCQs
Our team has conducted extensive research to compile a set of Cost Accounting MCQs. We encourage you to test your Cost Accounting knowledge by answering these multiple-choice questions provided below.
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1: Comparing budgeted costs to actual costs helps managers to improve ________.
A. Coordination
B. Control
C. Implementation
D. Planning
2: Which of the following is NOT a main objective of cost accounting?
A. Determining the cost of goods or services
B. Providing information for decision-making
C. Assessing the financial performance of a company
D. Maximizing shareholder wealth
3: What is the formula for calculating the cost of goods sold?
A. Opening stock + Purchases - Closing stock
B. Opening stock + Sales - Closing stock
C. Opening stock - Purchases + Closing stock
D. Opening stock - Sales + Closing stock
4: Which of the following is an example of a variable cost?
A. Rent expense
B. Insurance premium
C. Direct labor cost
D. Depreciation expense
5: What is the purpose of overhead allocation in cost accounting?
A. To assign indirect costs to specific cost objects
B. To calculate the breakeven point for a product or service
C. To determine the profit margin of a company
D. To analyze the return on investment for a project
6: What is the formula for calculating the contribution margin?
A. Sales - Cost of goods sold
B. Sales - Variable expenses
C. Sales - Fixed expenses
D. Sales - Total expenses
7: What is the concept of break-even analysis in cost accounting?
A. The point at which total revenue equals total expenses
B. The point at which variable expenses exceed fixed expenses
C. The point at which total costs exceed total revenue
D. The point at which fixed expenses are covered by contribution margin
8: Which method allocates overhead based on the actual consumption of cost drivers?
A. Absorption costing
B. Variable costing
C. Activity-based costing
D. Standard costing
9: What is the formula for calculating the predetermined overhead rate?
A. Estimated total overhead / Estimated total units of cost driver
B. Actual total overhead / Actual total units of cost driver
C. Budgeted total overhead / Budgeted total units of cost driver
D. Applied total overhead / Applied total units of cost driver
10: Which of the following is an example of a sunk cost?
A. Direct material cost
B. Future cash flows
C. Rent expense for the upcoming month
D. Research and development expenses
11: What is the purpose of variance analysis in cost accounting?
A. To compare actual costs with budgeted costs and identify discrepancies
B. To calculate the cost of goods sold
C. To allocate overhead expenses to specific cost objects
D. To determine the contribution margin for a product or service
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Cost Accounting MCQs
