Cost Accounting Objective Questions Answers for Practice

76. What is the "cost-plus pricing" method used for?

1. To calculate the selling price of a product by adding a markup to the cost
2. To determine the cost of raw materials
3. To set a price based on competition
4. To establish the fixed cost of a product

77. In cost accounting, what is "inventory costing"?

1. The method of allocating production costs to inventory
2. The process of tracking raw material costs
3. The method of allocating fixed costs to products
4. The method of pricing goods for sale

78. What is a "controllable cost" in cost accounting?

1. Costs that can be influenced or controlled by a manager
2. Costs that remain constant regardless of the decision
3. Costs that are fixed for a given period
4. Costs that cannot be influenced

79. In job order costing, how are costs assigned to each job?

1. Based on average costs
2. Based on a predetermined rate
3. Directly traced to the job
4. Using standard cost methods

80. What is "marginal cost"?

1. The additional cost incurred to produce one more unit
2. The total cost of production
3. The cost of direct materials
4. The total fixed costs for a given period

81. What is the difference between "direct materials" and "direct labor"?

1. Direct materials are variable costs, while direct labor is a fixed cost
2. Direct materials are raw materials used in production, while direct labor is the cost of workers directly involved in production
3. Direct labor is indirect, while direct materials are direct costs
4. Direct materials are used for internal purposes, while direct labor is used for production

82. What does "variable cost per unit" refer to?

1. The cost that remains constant regardless of the number of units produced
2. The cost that increases as production increases
3. The cost associated with fixed costs
4. The cost per unit for labor and materials

83. In cost accounting, "allocation" refers to:

1. The process of assigning costs to products, departments, or activities
2. The determination of the fixed costs for a given product
3. The calculation of direct labor costs
4. The estimation of sales revenue

84. What is the "cost of goods manufactured"?

1. The total cost of all products sold
2. The cost of raw materials used in production
3. The total costs incurred to produce goods during a specific period
4. The fixed cost of production

85. The term "marginal costing" refers to:

1. Including both fixed and variable costs in product costing
2. Assigning fixed costs to products
3. Calculating the additional cost of producing one more unit
4. Allocating the total cost of production across all units

86. The "direct method" of cost allocation involves:

1. Allocating costs based on specific activities
2. Assigning all fixed costs to products
3. Assigning overhead costs directly to products without using any allocation basis
4. Allocating costs based on the volume of production

87. In cost accounting, what is a "cost driver"?

1. A factor that causes costs to vary
2. The fixed cost of production
3. A unit of production
4. A manager responsible for controlling costs

88. What is the primary objective of cost accounting?

1. To determine the total profit from operations
2. To analyze and control the costs of production
3. To prepare financial statements
4. To calculate gross revenue

89. What is the "cost of capital"?

1. The cost of borrowing funds
2. The total cost of production
3. The cost of equity investments
4. The rate of return required by investors

90. What does the term "overhead" refer to in cost accounting?

1. The total direct costs of production
2. Indirect costs of production
3. Costs that cannot be traced to any product
4. Direct labor costs