WorksheetsCost Accounting Quiz
Total questions: 42
Worksheet time: 38mins
Which of the following costs are considered indirect costs?
Direct materials
Direct labor
Overhead
Selling expenses
What type of cost is a factory supervisor's salary?
Direct cost
Indirect cost
Variable cost
Mixed cost
A cost that remains constant in total but decreases per unit as production increases is called:
Variable cost
Fixed cost
Mixed cost
Step cost
A cost that changes in total in direct proportion to changes in the level of activity is called:
Fixed cost
Variable cost
Sunk cost
Opportunity cost
Which of the following best describes a "sunk cost"?
A cost that varies with production
A cost that has already been incurred and cannot be recovered
A future cost that is expected to be incurred
A cost that is part of the opportunity cost
Which costing method allocates overhead costs based on multiple cost drivers?
Absorption costing
Activity-based costing (ABC)
Job-order costing
Process costing
What is the primary purpose of a cost allocation base?
To determine the selling price of a product
To allocate direct labor to a job
To distribute indirect costs to cost objects
To assign direct materials to production
A cost that cannot be easily traced to a specific product or department is called:
Direct cost
Indirect cost
Sunk cost
Variable cost
Cost accounting involves the measuring, recording, and reporting of:
product costs
manufacturing process
future costs
managerial accounting decisions
Sunk costs
Are relevant to long-term decisions but not to short-term decisions
Are relevant to decision making
Are subtitles for opportunity costs
In themselves are not relevant to decision making
An opportunity cost is
The difference in total costs which results from selecting one choice instead of another.
A cost that may be shifted to the future with little or no effect on current operations
A cost that may be saved by not adopting an alternative
The profit foregone by selecting one choice instead of another
Controllable costs are
Costs are likely to respond to the amount of attention devoted to them by a specified manager.
Costs that are governed mainly by past decisions that established the present levels of operating and organizational capacity and that only charge slowly in response to small change in capacity
Cost that fluctuate in total in response to small changes in rate of utilization capacity
Costs that management decides to incur in the current period to enable the company to achieve objectives other than the filling orders placed by customers
The salary that is sacrificed by a college student who pursues a degree full time is a(n):
sunk cost
out-of-pocket cost
opportunity cost
differential cost
Which of the following equations is used to calculate the cost of goods sold during the period?
Beginning finished goods + cost of goods manufactured + ending finished goods.
Beginning finished goods - ending finished goods.
Beginning finished goods + cost of goods manufactured.
Beginning finished goods + cost of goods manufactured - ending finished goods.
Work-in-process inventory is composed of:
direct material and direct labor.
direct labor and manufacturing overhead.
direct material and manufacturing overhead.
direct material, direct labor, and manufacturing overhead.
If a predetermined overhead rate is not employed and the volume of production is increased over the level planned, the cost per unit would be expected to
Decrease for fixed costs and remain unchanged for variable costs.
Remain unchanged for fixed costs and increase for variable costs.
Decrease for fixed costs and increase for variable costs.
Increase for fixed costs and increase for variable costs.
Costs that increase as the volume of activity decreases within the relevant range are
Average cost per unit.
Total fixed costs.
Average variable cost per unit.
Total variable costs.
A cost that remains constant in total but varies on a per-unit basis with changes in activity is called a(n)
expired cost.
fixed cost.
variable cost.
mixed cost.
Which of the following is a term more descriptive of the type of cost accounting often called direct costing.
Relevant Costing
Variable Costing
Out-of-pocket costing
Prime Costing
Inventory under the variable costing includes
Direct materials cost, direct labor cost, but no factory overhead cost.
Direct materials cost, direct labor cost, and variable factory overhead.
Prime cost but not conversion cost.
Prime cost and all conversion cost.
Which of the following is the purpose of standard costing?
Determine "breakeven" production level
Control costs
Eliminate the need for subjective decisions by management
Allocate cost with more accuracy
A difference between standard costs used for cost control and the budgeted costs representing the same manufacturing effort can exist because
standard costs must be determined after the budget is completed
standard costs represent what costs should be while budgeted costs represent expected actual costs
budgeted costs are historical costs while standard costs are based on engineering studies
budgeted costs include some "slack" or "padding" while standard costs do not
The budgeted overhead costs for standard hours allowed and the overhead costs applied to product are the same amount
for both variable and fixed overhead costs.
only when standard hours allowed is less than normal capacity.
for variable overhead costs.
for fixed overhead costs.
A cost that will differ depending on the course of action chosen is known as a:
Sunk cost
Opportunity cost
Relevant cost
Fixed cost
Which of the following is an example of a sunk cost?
Future cost of new machinery
Depreciation on existing equipment
Salaries of new hires
Raw materials yet to be purchased
Which document is used to record the materials, labor, and overhead for each job in job order costing?
Production order
Job cost sheet
Materials requisition form
Labor time ticket
Under absorption costing, when production exceeds sales, net operating income will:
Increase
Decrease
Stay the same
Fluctuate randomly
Under variable costing, when production exceeds sales, net operating income will typically:
Increase
Decrease
Stay the same
Fluctuate randomly
Process costing typically uses which method to assign costs to products?
Job cost sheet
Weighted-average or FIFO methods
ABC analysis
Standard costing
In activity-based costing, the primary goal is to:
Assign overhead based on direct labor hours
Provide more accurate cost allocation by using multiple cost drivers
Allocate costs equally among departments
Simplify the costing process
Which of the following is a likely cost driver in an activity-based costing system?
Machine hours
Direct materials cost
Supervisor salaries
Finished goods inventory
Variable costing is most useful for which of the following purposes?
External financial reporting
Managerial decision-making
Income tax reporting
Budget preparation
Absorption costing is required for which of the following purposes?
Internal decision making
Income tax reporting
Variable costing analysis
Only for cash flow forecasting
The primary difference between variable costing and absorption costing is the treatment of:
Direct materials
Fixed manufacturing overhead
Variable selling expenses
Depreciation
Mat company estimated its material handling costs at two activity levels as follows: Kilos Handled Cost 80,000 P160,000 60,000 132,000 What is Mat's estimated cost of handling 75,000 kilos?
P 150,000
P 153,000
P 157,500
P 132,000
Britney Company has unit costs of P10 for materials and P30 for conversion costs. If there are 2,500 units in ending work in process, 40% complete as to conversion costs, and fully complete as to materials cost, the total cost assignable to the ending work in process inventory is
P 45,000
P 55,000
P 75,000
P100,000
XYZ Co., had 3,000 units of work in process on April 1 that were 60% complete. During April, 10,000 units were completed and as of April 30, 4,000 units that were 40% complete remained in production. How many units were started during April?
8,600.
9,800.
11,000.
12,200.
Nite Corporation has developed the following flexible budget formula for annual indirect labor costs: Total Cost = P480,000 + P5.00 per machine hour Operating budgets for the current month are based upon 20,000 machine hours of planned machine time. Indirect labor costs included in this planning budget are:
P 48,333
P100,000
P580,000
P140,000
Sams Company wants to develop a single predetermined overhead rate. The company's expected annual fixed overhead is P340,000 and its variable overhead cost per machine hour is P2. The company's relevant range is from 200,000 to 600,000 machine hours. Sams Company expects to operate at 425,000 machine hours for the coming year. The plant's theoretical capacity is 850,000. The predetermined overhead rate per machine hour should be
P2.40.
P2.57.
P2.80.
P2.85.
El Andre Co. uses a standard costing system in connection with the manufacture of a line of T-shirts. Each unit of finished product contains 2.25 yards of direct material. However, a 25 percent direct material spoilage calculated on input quantities occurs during the manufacturing process. The cost of the direct materials is P150 per yard. The standard direct material cost per unit of finished product is
P253
P422
P450
P405
The standard hourly rate was P4.10. Standard hours for the level of production are 4,000. The actual rate was P4.27. The labor rate variance was P654.50, unfavorable. What were the actual labor hours?
3,847
4,150
3,850
4,000
CTV Company has a standard fixed cost of P6 per unit. At an actual production of 8,000 units a favorable volume variance of P12,000 resulted. What were the total budgeted fixed costs?
P36,000
P60,000
P48,000
P75,000