Cost Accounting MCQs
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A company must eliminate all those activities that do not add value to all products or services in planning of
- A. variable overhead cost
- B. fixed overhead cost
- C. fixed batch cost
- D. variable batch cost
- Correct Answer: Option A
A concept used to define learning curve in broader application is called
- A. discrete curve
- B. fixed curve
- C. mixed curve
- D. experience curve
- Correct Answer: Option D
A concept which explains a received money in present time, is more valuable than money received in future is called
- A. lead value of money
- B. storage value of money
- C. time value of money
- D. cash value of money
- Correct Answer: Option C
A cost, consists of some fixed and some variable cost with respect to machine setup hours is termed as
- A. setup cost
- B. batch cost
- C. facility cost
- D. lump sum cost
- Correct Answer: Option A
A costing system, which focuses on individual activities as particular cost object is classified as
- A. activity based costing
- B. improved costing
- C. learned improvements
- D. positive effectiveness
- Correct Answer: Option A
A desire of an individual to give good performance for self-satisfaction is known as
- A. intrinsic motivation
- B. extrinsic motivation
- C. monetary motivation
- D. bounded motivation
- Correct Answer: Option A
A desire to achieve a particular goal with pursuit of that goal is called
- A. motivation
- B. goal congruence
- C. effort
- D. autonomy
- Correct Answer: Option A
A document which consists information about labor time usage, for specific job in a specific department, is known as
- A. selling time record
- B. labor time record
- C. buying time record
- D. direct time record
- Correct Answer: Option B
A document which contains information about materials of specific product, in specific department comes under
- A. costing method
- B. selling method
- C. material acquisition method
- D. none of above
- Correct Answer: Option C
A group of individual indirect cost item is defined as
- A. direct pool
- B. cost pool
- C. indirect pool
- D. item pool
- Correct Answer: Option B
A helpful technique, for accurate forecasts about costs to be incurred in future is a part of
- A. unit estimation
- B. production estimation
- C. cost estimation
- D. price estimation
- Correct Answer: Option C
A joint cost allocation method is based on relative value of total sales, at point of split off is classified as
- A. sales value at split off method
- B. joint costs at split off point method
- C. joint products value at split off method
- D. main product cost at split off method
- Correct Answer: Option A
A manager who is responsible for only cost of company belongs to
- A. cost center
- B. revenue center
- C. profit center
- D. investment center
- Correct Answer: Option A
A manager, who is responsible for both cost and revenues belongs to department of
- A. cost center
- B. revenue center
- C. profit center
- D. investment center
- Correct Answer: Option C
A measure which evaluates overall tradeoff and effect among non-financial performance measure is
- A. non-financial measures
- B. financial measures
- C. effective measure
- D. lump sum measure
- Correct Answer: Option B
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
- Correct Answer: Option B
A problem which arises because of presence of systematic pattern in residual value sequence is considered as
- A. parallel correlation
- B. serial correlation
- C. auto correlation
- D. both B and C
- Correct Answer: Option D
A process by which employees can make decisions is divided by total number of processes to calculate
- A. employee turnover ratio
- B. employee empowerment ratio
- C. employee satisfaction ratio
- D. employee training percentage
- Correct Answer: Option B
A product performance in comparison to its features and design is classified as
- A. learning quality
- B. design quality
- C. conformance quality
- D. business process quality
- Correct Answer: Option C
A push through system, according to which goods are manufactured for finished inventory solely, on basis of forecasted demand can be classified as
- A. in-time production
- B. materials requirement planning
- C. on-time production
- D. pull strategy of production
- Correct Answer: Option B
A situation when groups and individuals work together for achieving a particular goal can be classified as
- A. motivation
- B. goal congruence
- C. effort
- D. autonomy
- Correct Answer: Option B
A technique for estimating regression line, which minimizes sum of vertical deviations squares is classified as
- A. variable technique
- B. least square technique
- C. indexed technique
- D. fixed technique
- Correct Answer: Option B
A technique which minimizes sum of squared vertical difference, to determine regression line is considered as
- A. negative square technique
- B. positive square technique
- C. least square technique
- D. most square technique
- Correct Answer: Option C
A technique, which accumulates and tracks costs 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
- Correct Answer: Option C
A theory which describes techniques of operating income maximization, facing with non-bottleneck and bottle neck operations is
- A. theory of contribution
- B. theory of constraints
- C. theory of conflicts
- D. theory of maximization
- Correct Answer: Option B
A unit cost calculated in costing system, by assigning total costs incurred to many similar units is categorized as
- A. accounting period costing system
- B. process costing system
- C. job costing system
- D. none of above
- Correct Answer: Option B
According to incremental method, party which receives 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
- Correct Answer: Option C
According to net present value, projects that would be acceptable must have a
- A. negative net present value
- B. zero net present value
- C. positive net present value
- D. both b and c
- Correct Answer: Option D
Activities related to coordinating, controlling and planning flow of inventory are classified as
- A. decisional management
- B. throughput management
- C. inventory management
- D. manufacturing management
- Correct Answer: Option C
Actual price of material is less than budgeted price, this means that
- A. price variance is favorable
- B. price variance is unfavorable
- C. cost variance is favorable
- D. cost variance is unfavorable
- Correct Answer: Option A
After-tax average cost of funds used by company in long run is equal to
- A. weighted average cost of capital
- B. economic value added
- C. after-tax operating income
- D. net income
- Correct Answer: Option A
All choices for decision that are easily available to managers are classified as
- A. outcome
- B. actions
- C. events
- D. distribution
- Correct Answer: Option B
All costs, which are assigned to manufactured products for specific calculations are classified as
- A. contracting costs
- B. product cost
- C. government costs
- D. marketing costs
- Correct Answer: Option B
All salaries are paid to supervisors and engineers and cost of leasing equipment are classified as
- A. variable setup costs
- B. fixed setup costs
- C. variable batch costs
- D. fixed batch costs
- Correct Answer: Option B
Amount of money by which total revenues exceed breakeven revenues is classified as
- A. margin of safety
- B. margin of profit
- C. margin of loss
- D. margin of income
- Correct Answer: Option A
An ability of an accounting system, to point out use of resources in every step of production process is called
- A. back-flush trails
- B. audit trails
- C. trigger trails
- D. lead manufacturing trails
- Correct Answer: Option B
An ability of an organization, to offer its services or products that must be perceived by customers as unique and superior, in comparison to its competitors is called
- A. inelastic demand
- B. product differentiation
- C. cost leadership
- D. elastic demand
- Correct Answer: Option B
An accounting approach, in which expected benefits exceed expected cost is classified as
- A. benefit approach
- B. cost approach
- C. cost-benefit approach
- D. accounting approach
- Correct Answer: Option C
An accounting which records and measures business transactions and is followed by general accepted accounting principles is classified as
- A. external accounting
- B. internal accounting
- C. business accounting
- D. financial accounting
- Correct Answer: Option D
An acquisition cost of raw material is to be used in manufacturing, and becoming a component of cost object is classified as
- A. direct material costs
- B. indirect material costs
- C. direct labor costs
- D. indirect labor costs
- Correct Answer: Option A