Cost Accounting Quiz | Cost Accounting Online Test for Practice

31. What is "cost-plus pricing"?

1. Setting a product price based on the cost of production plus a markup
2. Setting a price based on competitor prices
3. Setting a price based on the perceived value to the customer
4. Setting a price based on market demand

32. What is the "work-in-progress" (WIP) inventory?

1. The raw materials waiting to be processed
2. The goods that are partially completed during the production process
3. Finished goods ready for sale
4. The cost of direct labor

33. What is the formula for calculating the break-even point in units?

1. Fixed costs / Contribution margin per unit
2. Sales price per unit - Variable cost per unit
3. Total fixed costs / Sales price per unit
4. Contribution margin per unit / Fixed costs

34. What is "relevant cost" in decision-making?

1. Costs that are incurred in the past and cannot be changed
2. Costs that are avoidable and differ between alternatives
3. Fixed costs that remain the same regardless of production level
4. Costs that are not considered in the decision-making process

35. Which of the following is a fixed cost?

1. Rent for factory premises
2. Direct labor
3. Direct materials
4. Sales commission

36. Which of the following is an example of an "avoidable cost"?

1. Depreciation on old machinery
2. Direct materials for a specific product
3. Salaries of the permanent staff
4. Rent for the factory

37. What is a "variable cost"?

1. A cost that changes with the level of production
2. A cost that does not change with production level
3. A fixed cost that is independent of output
4. The direct cost of labor

38. What is the "cost of quality" in manufacturing?

1. The cost associated with producing goods of high quality
2. The costs of quality control and inspection
3. The cost of defects, repairs, and scrap
4. All of the above

39. What is "standard costing" used for?

1. To compare actual costs with budgeted costs
2. To calculate gross margin
3. To allocate fixed costs to products
4. To compute contribution margin

40. In a "flexible budget," costs are adjusted based on:

1. The level of sales
2. The level of production or activity
3. The amount of inventory
4. The fixed costs

41. What is the "direct costing method"?

1. A method where only variable costs are assigned to products
2. A method that allocates both fixed and variable costs
3. A method that excludes fixed costs from product costing
4. A method used for external financial reporting

42. What does "cost control" involve in cost accounting?

1. The process of reducing fixed costs
2. Managing and reducing costs without affecting production
3. Assigning costs to each product
4. Allocating overhead costs to products

43. What is "target costing"?

1. Setting a product price based on the company's cost structure
2. Determining the cost reduction required to achieve a desired profit margin
3. Pricing a product based on market demand
4. Calculating the cost of direct materials

44. What is "profit center" in cost accounting?

1. A department responsible for generating profits
2. A unit or department where costs are tracked
3. A place where all fixed costs are recorded
4. A unit where costs are controlled and allocated

45. What does "direct labor cost" include?

1. Wages and salaries of workers directly involved in production
2. Salaries of management staff
3. The cost of electricity used in production
4. The cost of factory rent