100 practice sets · Page 5 of 5
What is the role of "cost behavior analysis" in cost accounting?
To classify costs as fixed, variable, or mixed and understand their impact on production
To allocate costs between departments
To track actual costs against budgeted costs
To compute profitability ratios
The "cost of goods sold" is calculated as:
Beginning inventory + Purchases - Ending inventory
Direct materials + Direct labor + Factory overhead
Sales revenue - Total costs
Total production cost + Ending inventory
Which of the following is an example of a variable cost?
Direct materials
Rent on factory buildings
Depreciation on machinery
Salaries of management
What is a cost allocation method used for?
To distribute overhead costs to different departments or products
To track direct labor costs
To record sales revenue
To calculate gross profit
In cost accounting, the term "fixed cost" refers to costs that:
Vary with production volume
Do not change with production levels
Are incurred only when production is high
Depend on the number of units sold
What does "marginal cost" refer to?
The cost of producing one additional unit of a product
The total cost of production
The cost of fixed assets
The average cost per unit
What is the cost-volume-profit (CVP) analysis used for?
To determine the cost of goods sold
To calculate the break-even point and assess profitability
To assign overhead costs to products
To track actual production costs
Which of the following is NOT a component of manufacturing cost?
Direct materials
Direct labor
Administrative expenses
Factory overhead
Which of the following is considered a sunk cost?
The cost of materials purchased for production
A payment made for a machine that cannot be recovered
The cost of labor in the current period
The variable cost of production
In a break-even analysis, the break-even point occurs when:
Total revenue equals total fixed costs
Total revenue equals total variable costs
Total revenue equals total costs
Profit equals zero
The term "standard costing" refers to:
The actual costs incurred during production
The budgeted costs for production
A method of costing using predetermined cost rates
The cost of raw materials used
What is "prime cost" in cost accounting?
The total direct costs of production, including direct materials and direct labor
The total cost of production, including fixed and variable costs
The total overhead cost
The cost of finished goods produced
Which of the following is considered a factory overhead cost?
Depreciation on factory equipment
Wages of factory workers
Cost of raw materials
Sales commissions
What is the key difference between job order costing and process costing?
Job order costing is used for customized products, while process costing is used for homogeneous products
Job order costing uses average costs, while process costing uses actual costs
Process costing applies overhead costs, while job order costing does not
Job order costing is only used in service industries
What is a job order costing system typically used for?
Mass production of identical products
Custom or made-to-order products
Service industry products
Both mass production and custom products
Which cost is considered as a period cost?
Direct materials
Direct labor
Rent on office space
Factory overhead
What is the purpose of activity-based costing (ABC)?
To allocate overhead costs based on the volume of production
To allocate overhead costs based on activities and resources consumed
To compute the direct cost of products
To calculate the contribution margin
The primary purpose of cost accounting is to:
Monitor financial position
Determine the cost of products
Analyze market conditions
Measure profitability
Which of the following is an example of a mixed cost?
Rent expense
Sales commission
Utilities expense
Direct labor
What is the primary purpose of cost accounting?
To determine the cost of goods sold
To prepare financial statements for external users
To control and reduce costs
To allocate profit to different departments
