Cost Accounting Test Questions Help
Business Finance
10 questions for the cost accounting test.
.Budgetary slack is created when:
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1. |
When the difference between actual and budgeted amounts are accidental |
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2. |
When the difference between actual and budgeted amounts are the result of deliberately introduced bias in the budgetary process. |
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3. |
When the difference between actual and budgeted amounts are based on unforeseen events. |
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4. |
When the difference between actual and budgeted amounts are the result of management’s inability to be clairvoyant. |
Direct materials combined with Direct Labor is referred to as
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1. |
conversion cost |
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2. |
variable cost |
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3. |
prime cost |
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4. |
fixed cost |
Operating budgets and financial budgets:
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1. |
combined form the master budget |
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2. |
are prepared before the master budget |
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3. |
are prepared after the master budget |
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4. |
have nothing to do with the master budget |
A cost system determines the cost of a cost object by:
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1. |
accumulating and then assigning costs |
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2. |
accumulating costs |
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3. |
assigning and then accumulating costs |
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4. |
assigning costs |
Crimson Services, Inc., employs 8 individuals. They are all paid $16.50 per hour. How would total costs of personnel be classified?
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1. |
variable cost |
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2. |
mixed cost |
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3. |
irrelevant cost |
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4. |
fixed cost |
The account analysis method estimates cost functions ________.
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by classifying cost accounts as variable, fixed, or mixed based on qualitative analysis |
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2. |
using time-and-motion studies |
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at a high cost, which renders it seldom used |
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4. |
in a manner that cannot be usefully combined with any other cost estimation methods |
The fundamental cost objects of ABC are ________.
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1. |
activities |
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2. |
cost drivers |
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3. |
products |
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4. |
services |
Extreme Manufacturing Company provides the following ABC costing information:
Activities Total CostsActivity-cost drivers
Account inquiry $390,000 13,000 hours
Account billing $275,000 5,000,000 lines
Account verification accounts $130,500 60,000 accounts
Correspondence letters $22,000 4,000 letters
Total costs $817,500
The above activities are used by Departments A and B as follows:
Department ADepartment B
Account inquiry hours 2,500 hours 4,000 hours
Account billing lines 800,000 lines 650,000 lines
Account verification accounts 9,000 accounts 7,000 accounts
Correspondence letters 2,000 letters 2,400 letters
How much of correspondence costs will be assigned to Department A?
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$22,000 |
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2. |
$49,500 |
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3. |
$11,000 |
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4. |
11,242 |
A variance is ________.
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the difference between actual fixed cost per unit and standard variable cost per unit |
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2. |
the standard units of inputs for one output |
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3. |
the difference between an actual result and a budgeted performance |
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4. |
the difference between actual variable cost per unit and standard fixed cost per unit |
Which of the following costs is inventoried when using variable costing?
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1. |
rent on factory building |
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2. |
electricity consumed in manufacturing process |
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3. |
sales commission paid on each sale |
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4. |
advertising costs incurred for the product |
Budgeted production equals ________.
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beginning finished goods inventory + budgeted unit sales – targeted ending finished goods inventory |
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2. |
targeted ending finished goods inventory + beginning finished goods inventory – budgeted unit sales |
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3. |
budgeted unit sales + targeted ending finished goods inventory – beginning finished goods inventory |
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4. |
budgeted unit sales + targeted ending finished goods inventory + beginning finished goods inventory |
Cost structure
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refers to the relative proportion of fixed versus variable costs that a company incurs. |
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2. |
generally has little impact on profitability. |
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cannot be significantly changed by companies. |
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4. |
refers to the relative proportion of operating versus nonoperating costs that a company incurs. |
