#1
What is the primary objective of cost accounting?
To maximize profits
To minimize costs
To provide information for decision-making
To increase revenue
#2
Which of the following is considered a direct cost?
Rent for the factory building
Indirect labor
Raw materials used in production
Utility bills for administrative offices
#3
Which of the following is an example of a period cost?
Direct materials used in production
Depreciation on factory equipment
Wages of production workers
Sales commissions
#4
What is the purpose of cost allocation?
To assign direct costs to cost objects
To assign indirect costs to cost objects
To calculate contribution margin
To prepare financial statements
#5
Which of the following is an example of a variable cost?
Property taxes
Rent on factory building
Direct materials
Salary of the factory supervisor
#6
Which of the following is an example of a non-manufacturing cost?
Direct materials
Factory rent
Advertising expenses
Factory depreciation
#7
What is the formula for calculating the contribution margin?
Sales - Variable Costs
Sales - Fixed Costs
Sales - (Variable Costs + Fixed Costs)
Sales - Operating Income
#8
Which cost concept assumes that production will occur at the maximum level?
Marginal Cost
Standard Cost
Normal Cost
Absorption Cost
#9
Which costing method assigns all manufacturing costs to the cost of goods sold?
Variable costing
Absorption costing
Activity-based costing
Job costing
#10
What is the formula for calculating the predetermined overhead rate?
Estimated total overhead / Estimated total units
Estimated total overhead / Estimated total direct labor hours
Estimated total overhead / Estimated total direct materials cost
Actual total overhead / Actual total units
#11
What does the term 'cost driver' refer to in cost accounting?
A factor that directly affects costs
A measure of profitability
A method for allocating overhead
A component of variable costs
#12
What is the formula for calculating total manufacturing cost?
Direct materials + Direct labor + Variable manufacturing overhead
Direct materials + Direct labor + Fixed manufacturing overhead
Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead
Direct materials + Variable manufacturing overhead + Fixed manufacturing overhead
#13
Under absorption costing, which of the following costs are included in the product cost?
Variable Manufacturing Overhead
Fixed Manufacturing Overhead
Variable Selling and Administrative Expenses
Fixed Selling and Administrative Expenses
#14
Which of the following methods is used for cost allocation based on the actual consumption of resources?
Direct method
Step-down method
Reciprocal method
Activity-based costing
#15
In which scenario would absorption costing and variable costing result in the same net income?
Production equals sales
Production exceeds sales
Production is less than sales
Variable costs exceed fixed costs
#16
What is the main objective of activity-based costing (ABC)?
To allocate costs based on direct labor hours
To allocate costs based on machine hours
To allocate costs based on activity levels
To allocate costs based on product units