Cost Accounting Exam Practice Tests
Course Introduction
Cost Accounting is a specialized field of accounting that focuses on capturing, analyzing, and managing the costs associated with producing goods or delivering services. This course provides students with a comprehensive understanding of cost behaviors, cost allocation methods, and various costing systems such as job order, process, and activity-based costing. Students will learn how to prepare and interpret cost reports to support managerial decision-making, budgeting, and performance evaluation. Through practical examples and case studies, the course emphasizes the importance of cost control, efficiency improvement, and strategic planning in achieving organizational objectives.
Recommended Textbook
Managerial Accounting 16th Edition by Ray
H Garrison
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Page 2
Chapter 1: Managerial Accounting and Cost Concepts
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Sample Questions
Q1) If 3,000 units are produced,the total amount of direct manufacturing cost incurred is closest to:
A) $26,550
B) $23,550
C) $33,300
D) $27,300
Answer: B
Q2) Although the traditional format income statement is useful for external reporting purposes,it has serious limitations when used for internal purposes because it does not distinguish between fixed and variable costs.
A)True
B)False
Answer: True
Q3) Cost behavior is considered curvilinear whenever a straight line is a reasonable approximation for the relation between cost and activity.
A)True
B)False
Answer: False
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Chapter 2: Job-Order Costing: Calculating Unit Production Costs
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Sample Questions
Q1) The total job cost for Job K332 is closest to:
A) $5,775
B) $6,132
C) $6,587
D) $1,267
Answer: C
Q2) Sargent Corporation applies overhead cost to jobs on the basis of 80% of direct labor cost.If Job 210 shows $10,000 of manufacturing overhead cost applied,how much was the direct labor cost on the job?
A) $12,500
B) $11,000
C) $8,000
D) $10,000
Answer: A
Q3) The unit product cost for Job T687 is closest to:
A) $99.00
B) $68.00
C) $172.50
D) $204.00
Answer: D
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Chapter 3: Job-Order Costing: Cost Flows and External Reporting
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Sample Questions
Q1) The cost of goods available for sale is:
A) $1,376,000
B) $1,567,000
C) $1,769,750
D) $1,597,000
Answer: D
Q2) The entry to dispose of the underapplied or overapplied manufacturing overhead cost for the month would include a:
A) credit of $5,336 to Manufacturing Overhead.
B) credit of $1,660 to Manufacturing Overhead.
C) debit of $5,336 to Manufacturing Overhead.
D) debit of $1,660 to Manufacturing Overhead.
Answer: D
Q3) In the Schedule of Cost of Goods Manufactured,Total raw materials available = Ending raw materials inventory + Purchases of raw materials.
A)True
B)False
Answer: False
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Chapter 4: Process Costing
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Sample Questions
Q1) When computing the cost per equivalent unit,the weighted-average method of process costing considers:
A) costs incurred during the current period only.
B) costs incurred during the current period plus cost of ending work in process inventory.
C) costs incurred during the current period plus cost of beginning work in process inventory.
D) costs incurred during the current period less cost of beginning work in process inventory.
Q2) The cost per equivalent unit for conversion costs for the first department for the month is closest to:
A) $40.03
B) $46.16
C) $44.58
D) $48.47
Q3) In a process costing system,costs are traced directly to jobs.
A)True
B)False
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Chapter 5: Cost-Volume-Profit Relationships
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Sample Questions
Q1) What is the margin of safety in dollars?
A) $5,520,000
B) $1,545,600
C) $3,974,400
D) $3,680,000
Q2) Assume the company's target profit is $16,000.The dollar sales to attain that target profit is closest to:
A) $564,328
B) $1,710,085
C) $1,038,898
D) $842,281
Q3) Assume the company's target profit is $12,000.The dollar sales to attain that target profit is closest to:
A) $1,549,412
B) $798,182
C) $526,800
D) $958,131
Q4) A decrease in the number of units sold will decrease the break-even point.
A)True
B)False
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Chapter 6: Variable Costing and Segment Reporting: Tools for Management
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Sample Questions
Q1) The total gross margin for the month under the absorption costing approach is:
A) $73,000
B) $37,400
C) $13,200
D) $50,600
Q2) What is the unit product cost for the month under absorption costing?
A) $80 per unit
B) $72 per unit
C) $63 per unit
D) $89 per unit
Q3) If a cost must be arbitrarily allocated in order to be assigned to a particular segment,then that cost should be considered a common cost.
A)True
B)False
Q4) The unit product cost under variable costing in Year 1 is closest to:
A) $21.00
B) $57.00
C) $62.00
D) $26.00
8
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Chapter 7: Super-Variable Costing
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Sample Questions
Q1) The company is considering using either super-variable costing or an absorption costing system that assigns $10 of direct labor cost and $67 of fixed manufacturing overhead to each unit that is produced.Which of the following statements is true regarding the net operating income in the first year?
A) Super-variable costing net operating income exceeds absorption costing net operating income by $1,000.
B) Super-variable costing net operating income exceeds absorption costing net operating income by $77,000.
C) Absorption costing net operating income exceeds super-variable costing net operating income by $77,000.
D) Absorption costing net operating income exceeds super-variable costing net operating income by $1,000.
Q2) The net operating income for the year under super-variable costing is:
A) $1,604,000
B) $1,404,000
C) $1,582,000
D) $1,728,000
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Chapter 8: Master Budgeting
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Sample Questions
Q1) Knappert Corporation makes one product and has provided the following information:
A.Each unit of finished goods requires 3 pounds of raw materials.The raw materials cost $5.00 per pound.
B.The direct labor wage rate is $24.00 per hour.Each unit of finished goods requires 2.8 direct labor-hours.
C.Manufacturing overhead is entirely variable and is $11.00 per direct labor-hour.
D.The variable selling and administrative expense per unit sold is $3.80.The fixed selling and administrative expense per month is $50,000.
The unit product cost is closest to:
A) $82.20
B) $93.20
C) $30.80
D) $113.00
Q2) The selling and administrative budget is typically prepared before the cash budget.
A)True
B)False
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Chapter 9: Flexible Budgets and Performance Analysis
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Sample Questions
Q1) The manufacturing overhead in the flexible budget for January would be closest to:
A) $57,004
B) $57,647
C) $57,630
D) $57,170
Q2) The net operating income in the flexible budget for January would be closest to:
A) $32,823
B) $40,902
C) $32,670
D) $40,784
Q3) The revenue variance for September would be closest to:
A) $210 U
B) $1,990 F
C) $1,990 U
D) $210 F
Q4) A flexible budget performance report contains activity variances but not revenue or spending variances.
A)True
B)False
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Chapter 10: Standard Costs and Variances
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Sample Questions
Q1) The variable overhead rate variance for November is:
A) $612 U
B) $660 U
C) $660 F
D) $612 F
Q2) The materials price variance for February is:
A) $3,136 F
B) $3,260 F
C) $3,136 U
D) $3,260 U
Q3) The standard number of machine-hours allowed for July production is closest to:
A) 1,600 hours
B) 1,700 hours
C) 1,300 hours
D) 1,500 hours
Q4) The variable overhead efficiency variance for January is:
A) $320 F
B) $316 U
C) $320 U
D) $316 F
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Chapter 11: Performance Measurement in Decentralized Organizations
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Sample Questions
Q1) If the company pursues the investment opportunity and otherwise performs the same as last year,the combined ROI for the entire company will be closest to:
A) 12.0%
B) 8.6%
C) 10.4%
D) 1.7%
Q2) The division's turnover is closest to:
A) 13.16
B) 4.22
C) 0.32
D) 3.20
Q3) A balanced scorecard consists of a report showing a performance measure such as ROI or residual income for all of the divisions in a company that generate profits.
A)True B)False
Q4) A manufacturing cycle efficiency (MCE)of less than one is impossible. A)True B)False
Page 13
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Chapter 12: Differential Analysis: The Key to Decision Making
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Sample Questions
Q1) Fixed costs are irrelevant in decisions about whether a product should be dropped.
A)True
B)False
Q2) Kahn Corporation (a multi-product company)produces and sells 8,000 units of Product X each year.Each unit of Product X sells for $10 and has a contribution margin of $6.If Product X is discontinued,$50,000 of the $60,000 in annual fixed costs charged to Product X could be eliminated.The annual financial advantage (disadvantage)for the company of eliminating this product should be:
A) $2,000
B) ($2,000)
C) $12,000
D) ($12,000)
Q3) When a company has a production constraint,total contribution margin will be maximized by emphasizing the products with the highest contribution margin per unit of the constrained resource.
A)True B)False
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14
Chapter 13: Capital Budgeting Decisions
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Sample Questions
Q1) (Ignore income taxes in this problem.)Consider the following three investment opportunities:
Project I would require an immediate cash outlay of $40,000 and would result in cash savings of $9,000 each year for 5 years.
Project II would require cash outlays of $7,000 per year and would provide a cash inflow of $40,000 at the end of 5 years.
Project III would require a cash outlay of $36,000 now and would provide a cash inflow of $60,000 at the end of 5 years.
Required:
The discount rate is 10%.Use the net present value method to determine which,if any,of the three projects is acceptable.
Q2) The payback period of this investment is closest to:
A) 2.9 years
B) 4.9 years
C) 3.1 years
D) 5.0 years
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15
Chapter 14: Statement of Cash Flows
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Sample Questions
Q1) The net cash provided by (used in)investing activities for the year was:
A) $(69)
B) $69
C) $136
D) $(136)
Q2) Under the indirect method of determining the net cash provided by operating activities on the statement of cash flows,an increase in accounts receivable would be subtracted from net income.
A)True
B)False
Q3) Collecting the principal on a loan to another company would be reported on the investing activities section of the statement of cash flows.
A)True
B)False
Q4) The company's net cash provided by (used in)investing activities is:
A) $(6,000)
B) $(54,000)
C) $(24,000)
D) $(44,000)
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Chapter 15: Financial Statement Analysis
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Sample Questions
Q1) Maraby Corporation's average sale period for Year 2 was closest to:
A) 38.8 days
B) 32.6 days
C) 46.6 days
D) 27.0 days
Q2) If a retailer sells a product whose contribution margin equals the gross margin percentage,the gross margin percentage will be unaffected by the transaction.
A)True
B)False
Q3) The company's acid-test (quick)ratio is closest to:
A) 2.47
B) 2.83
C) 3.10
D) 4.25
Q4) The company's operating cycle for Year 2 is closest to:
A) 10.4 days
B) 79.5 days
C) 141.3 days
D) 72.2 days
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Chapter 16: Cost of Quality
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Sample Questions
Q1) Which of the following would be classified as an internal failure cost on a quality cost report?
A) Rework labor and overhead.
B) Technical support provided to suppliers.
C) Quality improvement projects.
D) Systems development.
Q2) What would be the total prevention cost appearing on the quality cost report?
A) $99,000
B) $67,000
C) $120,000
D) $79,000
Q3) The cost of labor time required to rework defective units would be classified as a(n): A) prevention cost.
B) appraisal cost.
C) internal failure cost.
D) external failure cost.
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Chapter 17: Activity-Based Absorption Costing
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Sample Questions
Q1) The predetermined overhead rate under the traditional costing system is closest to:
A) $11.71
B) $38.69
C) $171.89
D) $23.87
Q2) The manufacturing overhead that would be applied to a unit of product N06D under the company's traditional costing system is closest to:
A) $28.78
B) $10.00
C) $63.31
D) $34.53
Q3) In comparing the traditional system with the activity-based costing system,which of Njombe's Models had higher unit product costs under the traditional system?
A) #19
B) #58
C) #19 and #58
D) #36 and #58
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19
Chapter 18: The Predetermined Overhead Rate and Capacity
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Sample Questions
Q1) The management of Krach Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity.The company's controller has provided an example to illustrate how this new system would work.In this example,the allocation base is machine-hours and the estimated amount of the allocation base for the upcoming year is 10,000 machine-hours.Capacity is 12,000 machine-hours and the actual level of activity for the year is assumed to be 9,500 machine-hours.All of the manufacturing overhead is fixed and both the estimated amount at the beginning of the year and the actual amount at the end of the year are assumed to be $12,000 per year.For simplicity,it is assumed that this is the estimated manufacturing overhead for the year as well as the manufacturing overhead at capacity.It is further assumed that this is also the actual amount of manufacturing overhead for the year. If the company bases its predetermined overhead rate on capacity,what would be the cost of unused capacity reported on the income statement prepared for internal management purposes?
A) $2,000
B) $2,500
C) $1,900
D) $600
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Page 20
Chapter 19: Job-Order Costing: a Microsoft Excel-Based Approach
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Sample Questions
Q1) In the Excel,or spreadsheet,approach to recording financial transactions,if manufacturing overhead is underapplied by X dollars,the Manufacturing Overhead account is closed out by deducting X dollars in the Manufacturing Overhead column and deducting X dollars in the Retained Earnings column.
A)True
B)False
Q2) In the Excel,or spreadsheet,approach to recording financial transactions,raw material purchases on account are recorded as increases in the Raw Materials inventory column and decreases in the Accounts Payable column.
A)True
B)False
Q3) In the Excel,or spreadsheet,approach to recording financial transactions,any transactions involving sales or expenses will be recorded in the Net Income column of the balance sheet.
A)True
B)False
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21
Chapter 20: Fifo Method
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Sample Questions
Q1) The equivalent units for conversion for March,using the FIFO method,are:
A) 63,100 units
B) 65,000 units
C) 62,500 units
D) 65,100 units
Q2) Carver Corporation uses the FIFO method in its process costing system.The Assembly Department started the month with 2,000 units in its beginning work in process inventory that were 60% complete with respect to conversion costs.An additional 66,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department.There were 9,000 units in the ending work in process inventory of the Assembly Department that were 50% complete with respect to conversion costs. What were the equivalent units of production for conversion costs in the Assembly Department for the month?
A) 59,000
B) 62,300
C) 63,500
D) 73,000
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Chapter 21: Service Department Allocations
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Sample Questions
Q1) After the allocations,the total amount of overhead cost contained in the Finishing Department will be:
A) $156,800
B) $151,300
C) $154,667
D) $138,450
Q2) In the first step of the allocation,the amount of Service Department A cost allocated to the Operating Department X is closest to:
A) $24,360
B) $21,924
C) $16,948
D) $24,914
Q3) The total Finishing Department cost after allocations is closest to:
A) $443,342
B) $433,660
C) $441,102
D) $442,940
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Chapter 22: Analyzing Mixed Costs
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Sample Questions
Q1) Using the high-low method of analysis,the estimated monthly fixed component of lubrication cost is closest to:
A) $1,120
B) $1,140
C) $1,170
D) $1,130
Q2) In a scattergraph of cost and activity,activity is the independent variable because it causes variations in the cost.
A)True
B)False
Q3) Using the high-low method,the estimate of the fixed component of electrical cost per month is closest to:
A) $822
B) $743
C) $38
D) $944
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Chapter 23: Time-Driven Activity-Based Costing: a
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Sample Questions
Q1) On the Capacity Analysis report in time-driven activity based costing,the "total minutes used to meet demand" would be closest to:
A) 1,524,130 minutes
B) 1,320,260 minutes
C) 1,116,390 minutes
D) 1,728,000 minutes
Q2) On the Customer Cost Analysis report in time-driven activity-based costing,the Receiving Calls cost assigned to Customer M would be closest to:
A) $216.00
B) $117.60
C) $7.20
D) $113.60
Q3) On the Customer Cost Analysis report in time-driven activity-based costing,the cost per minute of the resource supplied would be closest to:
A) $0.40 per minute
B) $0.36 per minute
C) $20.00 per minute
D) $18.00 per minute
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Chapter 24: Predetermined Overhead Rates and Overhead
Analysis in a Standard Costing System
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Sample Questions
Q1) The fixed overhead budget variance is:
A) $20,000 U
B) $400 U
C) $20,000 F
D) $400 F
Q2) The fixed manufacturing overhead budget variance for the period is closest to:
A) $3,595 U
B) $550 F
C) $2,763 U
D) $784 F
Q3) If the standard hours allowed for the actual output of the period is greater than the denominator level of activity (in hours),then the overhead volume variance will be favorable.
A)True
B)False
Q4) The variable overhead rate variance is:
A) $14,280 F
B) $13,314 U
C) $14,280 U
D) $13,314 F
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Chapter 25: Standard Cost Systems: a Financial Reporting
Perspective Using Microsoft Excel
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Sample Questions
Q1) The adjusted Cost of Goods Sold after closing all of the variances to Cost of Goods Sold will be closest to:
A) $1,128,750
B) $1,262,370
C) $1,195,560
D) $1,303,710
Q2) When the raw materials used in production are recorded in transaction (b)above,which of the following entries will be made?
A) $750 in the Materials Quantity Variance column
B) $750 in the Materials Price Variance column
C) ($750) in the Materials Quantity Variance column
D) ($750) in the Materials Price Variance column
Q3) When Raw Materials,Work in Process,and Finished Goods are recorded and carried at their standard cost,the fixed overhead applied to work in process is calculated by multiplying the predetermined overhead rate by the actual direct labor-hours worked. A)True B)False
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Chapter 26: Transfer Pricing
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Sample Questions
Q1) Assume that the Plastics Division is currently operating at full capacity.Also assume that the Components Division wants to increase the number of parts it purchases from Plastics.In order to maintain its current level of profitability,the Plastics Division should not accept any transfer price on these additional parts that is below the:
A) variable cost of the additional parts.
B) full (absorption) cost of the additional parts.
C) variable cost of the additional parts plus the lost contribution margin on all units that could no longer be sold to customers outside the corporation.
D) full (absorption) cost of the additional parts plus the lost contribution margin on all units that could no longer be sold to customers outside the corporation.
Q2) Suppose that Division S can sell all that it can produce to outside customers.If Division S sells to Division B at a price of $28 per unit,the company as a whole will be:
A) worse off by $80,000 each period.
B) worse off by $70,000 each period.
C) better off by $20,000 each period.
D) worse off by $20,000 each period.
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Chapter 27: Service Department Charges
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Sample Questions
Q1) For performance evaluation purposes,the actual fixed costs of a service department should be charged to the departments that consume the service in proportion to the actual services provided to the consuming departments during the period.
A)True
B)False
Q2) How much actual Logistics Department cost should not be allocated to the operating divisions at the end of the year?
A) $28,040
B) $0
C) $16,360
D) $11,680
Q3) For performance evaluation purposes,how much of the $255,000 of actual variable maintenance cost should be charged to the Assembly Department at the end of the year just ended?
A) $182,143
B) $175,312
C) $165,000
D) $178,500
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29
Chapter 28: Pricing Decisions
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Sample Questions
Q1) In target costing,the cost of a product is the starting point and the selling price follows from the cost.
A)True
B)False
Q2) The markup on absorption cost is closest to:
A) 12.0%
B) 51.0%
C) 49.6%
D) 126.7%
Q3) Assume that the total traceable fixed expense does not change.If Chruch decreases the price of Tau42 to $60.16,what percentage change in unit sales would provide the same net operating income as is currently being earned at a price of $64.00? (Your answer should be rounded to the nearest 0.1%.)
A) 15.5%
B) 23.8%
C) -6.7%
D) -10.0%
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Chapter 29: The Concept of Present Value
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Q1) (Ignore income taxes in this problem.)In order to receive $12,000 at the end of three years and $10,000 at the end of five years,how much must be invested now if you can earn 14% rate of return?
A) $12,978
B) $8,100
C) $13,290
D) $32,054
Q2) Suppose an investment has cash inflows of R dollars at the end of each year for two years.The present value of these cash inflows using a 12% discount rate will be:
A) greater than under a 10% discount rate.
B) less than under a 10% discount rate.
C) equal to that under a 10% discount rate.
D) sometimes greater than under a 10% discount rate and sometimes less; it depends on R.
Q3) The present value of an amount to be received in five years is exactly twice as large as the present value of an equal amount to be received in ten years.
A)True
B)False
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Chapter 30: Income Taxes and the Present Value Method
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Source URL: https://quizplus.com/quiz/61653
Sample Questions
Q1) The total cash flow net of income taxes in year 3 is:
A) $58,000
B) $158,000
C) $100,000
D) $88,000
Q2) The net present value of the entire project is closest to:
A) $91,861
B) $157,650
C) $85,271
D) $156,000
Q3) The income tax expense in year 3 is:
A) $42,000
B) $21,000
C) $28,000
D) $7,000
Q4) The income tax expense in year 3 is:
A) $14,000
B) $21,000
C) $3,500
D) $10,500
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Chapter 31: the Direct Method of Determining the Net Cash
Provided by Operating Activities
Available Study Resources on Quizplus for this Chatper
56 Verified Questions
56 Flashcards
Source URL: https://quizplus.com/quiz/61651
Sample Questions
Q1) The net cash provided by (used in)operating activities for the year was:
A) $23
B) $133
C) $157
D) $87
Q2) The net cash provided by (used in)investing activities for the year was:
A) $(127)
B) $(138)
C) $138
D) $127
Q3) The net cash provided by (used in)investing activities would be:
A) $15,000
B) $(10,000)
C) $(8,000)
D) $5,000
Q4) On the statement of cash flows,the sales adjusted to a cash basis would be:
A) $700,000
B) $688,000
C) $677,000
D) $712,000
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