Cost Accounting Test Questions
Course Introduction
Cost Accounting is a foundational course that explores the principles, methods, and techniques used to capture, analyze, and report financial information related to the costs of producing goods and services. Students will learn about cost determination, cost allocation, overhead analysis, job and process costing, standard and variance analysis, and activity-based costing. Emphasis is placed on the use of cost data for planning, control, decision-making, and performance evaluation within organizations. The course equips students with skills to effectively manage resources, optimize operations, and support strategic business objectives through cost control and informed financial planning.
Recommended Textbook
Cornerstones of Managerial Accounting 3rd Canadian Edition by Maryanne Mowen
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14 Chapters
2190 Verified Questions
2190 Flashcards
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Chapter 1: Introduction to Managerial Accounting
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66 Flashcards
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Sample Questions
Q1) CMA,CGA and CA organizations have recently have been brought together under a new professional body called CPA Canada.
A)True
B)False
Answer: True
Q2) Which of the following is a characteristic of financial accounting?
A)It has no regulatory or mandatory rules.
B)It is internally focused.
C)It is concerned with the firm as a whole.
D)It has an emphasis on the future.
Answer: C
Q3) What is a primary activity in the value chain?
A)procurement
B)marketing and sales
C)human resources management
D)technology developmentA pr
Answer: B
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Page 3
Chapter 2: Basic Managerial Accounting Concepts
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222 Flashcards
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Sample Questions
Q1) Refer to the Figure.What was the conversion cost per unit?
A)$50
B)$75
C)$95
D)$125
Answer: B
Q2) Number of units sold multiplied by sales price per unit
A)Gross margin
B)Selling expenses
C)Sales revenue
D)Cost of goods sold
E)Operating income
Answer: C
Q3) Refer to the Figure.What were the total product costs?
A)$100,000
B)$150,000
C)$190,000
D)$236,000
Answer: C
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Page 4
Chapter 3: Cost Behaviour
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Sample Questions
Q1) Explain the difference between a committed fixed cost and a discretionary fixed cost. Answer: A committed fixed cost is normally unchangeable by management.A committed fixed cost usually is the result of a long-term contract.An example of a committed fixed cost would be a lease agreement.If output decreases,the lease payments are generally still required.A discretionary fixed cost can easily be changed at management discretion.An example of a discretionary fixed cost would be the cost of advertising.Management may make the decision to cut costs by reducing advertising costs.
Q2) The range of output over which the assumed cost relationship is valid
A)Relevant range
B)Cost behaviour
C)Driver
D)Variable cost
E)Fixed cost
Answer: A
Q3) Controller's salary
A)Variable
B)Fixed Answer: B
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Page 5
Chapter 4: Costvolumeprofit Analysis: a Managerial Planning Tool
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161 Verified Questions
161 Flashcards
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Sample Questions
Q1) Refer to the Figure.What is the contribution margin ratio?
A)33%
B)40%
C)50%
D)60%
Q2) Assume the following information: How many units must be sold to generate a before-tax profit of $45,000?
\(\begin{array}{lr}
\text { Selling price per unit } & \$ 100 \\
\text { Contribution margin ratio } & 50 \% \\
\text { Total fixed costs } & \$ 250,000
\end{array}\)
A)2,500 units
B)3,000 units
C)3,750 units
D)5,900 units
Q3) Managers can use CVP analysis to handle risk and uncertainty.
A)True
B)False
Q4) How can a multi-product firm determine its break-even point?
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Chapter 5: Job-Order Costing
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177 Verified Questions
177 Flashcards
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Sample Questions
Q1) Cost of materials is removed from materials account and added to work in process
A)Completion of job
B)End of each accounting period
C)Materials are removed from storage into production
D)Product is sold
E)End of year
Q2) Budgeted overhead is $40,000,budgeted direct labour hours are 2,000,actual overhead is $40,400,and direct labour hours are 3,230.Unadjusted cost of goods sold is $140,800.Calculate the following:
A. Calculate the overhead variance.
B. What is adjusted cost of goods sold?
Q3) Form headed by the job order number,or name
A)Job-order cost sheet
B)Time ticket
C)Materials requisition form
Q4) Consider two costing systems,normal costing and actual costing.
A. Which costing system do most firms use to assign costs to units of product or service? What does this costing system include?
B. What is the other costing system? What does this costing system include?
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Chapter 6: Process Costing
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157 Flashcards
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Sample Questions
Q1) Which two methods determine the equivalent units of production in process costing?
A)weighted average and FIFO
B)FIFO and LIFO
C)actual costing and LIFO
D)weighted average and actual costing
Q2) Which step is cost reconciliation in the general pattern of a process-costing production report?
A)part of the physical flow analysis
B)the step before calculation of equivalent units
C)the step before the computation of unit cost
D)the last step
Q3) Equivalent units of output are the complete units that could have been produced given the total amount of manufacturing effort expended for the period under consideration.
A)True
B)False
Q4) Describe the differences between sequential and parallel processing.
Q5) Refer to Process Department A.What is the unit manufacturing cost for Department A for October?
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Chapter 7: Activity-Based Costing and Management
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154 Flashcards
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Sample Questions
Q1) Unit-level activities are performed each time a batch is produced.
A)True
B)False
Q2) A factory produces 108,000 3D televisions per quarter.A total of 12,000 production hours are used within the factory per quarter.What is the velocity in units per hour?
A)2 units per hour
B)9 units per hour
C)16 units per hour
D)18 units per hour
Q3) Activity drivers should be classified as either internal or external.
A)True
B)False
Q4) Which of the following is defined as a category of quality-related costs?
A)invention
B)controller
C)internal control
D)external failure
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Chapter 8: Absorption and Variable Costing, and Inventory Management
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Sample Questions
Q1) A major advantage to the JIT inventory approach is that it decreases carrying costs. A)True
B)False
Q2) Refer to the Figure.What is the May ending inventory for Theele Corporation when using the absorption costing method?
A)$39,000
B)$45,000
C)$148,500
D)$300,000
Q3) Prairie Inc.mines three products.Gold ore sells for $1,000 per ton,variable costs are $600 per ton,and fixed mining costs are $250,000.The segment margin for the year was ($100,000).The management of Prairie Mining was considering dropping the mining of gold ore.Only one-half of the fixed expenses are direct and would be eliminated if the segment was dropped. What were the sales in tons for the year?
A)200 tons
B)250 tons
C)375 tons
D)1,000 tons
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Chapter
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Sample Questions
Q1) There are as many direct materials purchases budgets as there are products.
A)True
B)False
Q2) Lube-Fast provides oil changes and lubes.The estimated number of oil changes for April and May are 3,600 and 4,000.Each oil change takes 12 minutes of direct labour.The wage rate is $10 per hour.Overhead is $3,700 per month and $2 per oil change.
A. What is the budgeted direct labour for April?
B. What is the budgeted direct labour for May?
C. What is the budgeted overhead for April?
D. What is the budgeted overhead for May?
Q3) Budgeted capital expenditures
A)Operating budget
B)Financial budget
Q4) Refer to the Figure.What are the total cash disbursements expected by Garden during the month of July?
A)$55,600
B)$60,100
C)$161,600
D)$167,600
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Chapter 10: Standard Costing: a Managerial Control Tool
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173 Flashcards
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Sample Questions
Q1) This reflects the planned improvement that is set,which will help reduce non-value-added costs.
A)Quantity standards
B)Ideal standards
C)Price standards
D)Standard cost sheet
E)Upper control limit
F)Currently attainable standards
G)Kaizen standards
Q2) A tool used to provide the production data needed to calculate the standard unit cost.
A)Quantity standards
B)Ideal standards
C)Price standards
D)Standard cost sheet
E)Upper control limit
F)Currently attainable standards
G)Kaizen standards
Q3) How are standards developed?
Q4) Explain the kaizen approach to costing.
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Chapter 11: Flexible Budgets and Overhead Analysis
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Sample Questions
Q1) Assume that the expectations on the static budget were met.What can be concluded?
A)The static budget was ill conceived.
B)The effectiveness of the manager is not in question.
C)The manager is very efficient.
D)There is no need for a flexible budget.
Q2) Refer to the Figure.Which of the following is a flexible budget formula for the moving materials activity?
A)$180,000 + $0.50 × moves
B)$405,000 + $0.50 × moves
C)$450,000 + $0.50 × moves
D)$450,000 + $2.00 × moves
Q3) Price changes of variable overhead items are easily controlled by production supervisors.
A)True
B)False
Q4) What is a performance report?
Q5) The volume variance is often interpreted as a measure of capacity utilization.
A)True
B)False
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Chapter 12: Performance Evaluation and Decentralization
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Sample Questions
Q1) Using return on investment to calculate residual income,the dollar cost of capital employed is the actual percentage cost of capital multiplied by the total capital.
A)True
B)False
Q2) What is the best transfer price when the transferred product has a competitive outside market?
A)the cost-based price
B)the negotiated price
C)the market price
D)the price set by central management
Q3) Refer to the Figure.What are the average operating assets for Division B?
A)$5,000
B)$25,000
C)$125,000
D)$208,333
Q4) In the negotiated transfer pricing,the buying division sets the ceiling (maximum possible transfer price)for the bargaining range.
A)True B)False
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Chapter 13: Short-Run Decision Making: Relevant Costing
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Sample Questions
Q1) What is the term for the act of choosing among alternatives with an immediate or limited end in view?
A)assessing feasible alternatives
B)strategic decision making
C)constructing a decision model
D)short-run decision making
Q2) Refer to the Figure.What is Butry's profit from refining one batch of dactylyte if both dac and tyl are sold at the split-off point?
A)$6,000
B)$7,000
C)$12,000
D)$15,000
Q3) What kind of decision involves a choice between internal and external production?
A)a make-or-buy decision
B)a keep-or-drop decision
C)a sell-or-process-further decision
D)a special-order decision
Q4) Why does a special-order decision frequently ignore fixed factory overhead?
Q5) What are the six steps of the decision-making model?
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Chapter 14: Capital Investment Decisions
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Sample Questions
Q1) Refer to the Figure.What is the accounting rate of return for the project?
A)3.125%
B)25.000%
C)83.330%
D)120.000%
Q2) Before-tax cash flows must be forecasted and used in capital investment decision making.
A)True
B)False
Q3) A division manager is considering a project that requires a significant initial investment.The company's top management will NOT approve any project that does not return at least 12%.Which capital investment model will the manager most likely use?
A)the payback period
B)the accounting rate of return
C)the net present value
D)the internal rate of return
Q4) A key element in the capital investment process is called a preaudit.
A)True
B)False
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