Test 358 Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Cost Accounting Total Number of Question: 40 Time: 41 Minutes Please check your email after completion of test for result. All the best... Name Phone No Email State 1. A company manufactures 500 units of a product, and the fixed costs are $10,000. What will be the fixed cost per unit if production is increased to 1,000 units? $20 $10 $50 $15 None 2. Which of the following statements is true regarding absorption costing? Absorption costing is only concerned with variable costs Absorption costing includes both fixed and variable manufacturing costs in product cost Absorption costing is not suitable for financial reporting Absorption costing does not consider overheads None 3. A company has budgeted to produce 5,000 units, with direct material cost per unit of $4 and direct labour cost per unit of $3. If 5,500 units are produced, what is the total prime cost? $35,000 $38,500 $40,000 $45,500 None 4. The cost per unit of a variable cost changes when Production level changes Total variable cost changes Selling price changes The cost per unit of a variable cost remains constant None 5. Which of the following is considered a step to calculate the overhead absorption rate? Calculating total production cost Dividing total overhead by the number of cost drivers Adding direct material to overhead Estimating the selling price None 6. A process costing system is used when: Production is carried out in a single process Each product is individually identifiable Products are identical and pass through different processes Products are made in batches None 7. The break-even point (BEP) in units can be calculated as Fixed Costs / (Selling Price per Unit - Variable Cost per Unit) Total Sales / Variable Costs Total Costs / Contribution per Unit Fixed Costs / Total Sales None 8. A company uses a cost driver rate of $20 per machine hour. If a job requires 15 machine hours, what is the overhead cost allocated to the job? $200 $300 $400 $500 None 9. In which costing method are costs first assigned to departments and then allocated to products? Activity-based costing Process costing Departmental costing Job costing None 10. A company has an overhead absorption rate of $8 per labour hour. If a job requires 120 labour hours, what will be the overhead absorbed for the job? $800 $960 $1,000 $1,200 None 11. If the margin of safety is $15,000 and the contribution margin ratio is 40%, what is the profit? $3,000 $6,000 $9,000 $12,000 None 12. A company incurred actual overheads of $50,000 but absorbed overheads of $48,000. What type of variance does this indicate? Over-absorption of $2,000 Under-absorption of $2,000 Overhead efficiency variance No variance None 13. If a job requires $5,000 in direct materials, $3,000 in direct labour, and $1,500 in overheads, what is the total cost of the job? $8,000 $9,500 $10,500 $11,000 None 14. Which of the following is a characteristic of job costing? Costs are accumulated for each department Costs are assigned to batches of identical products Costs are traced to each specific job or project Costs are always variable None 15. If a company budgets $30,000 for overhead and allocates it based on 5,000 machine hours, what is the overhead rate per machine hour? $5 $6 $7 $8 None 16. A company has fixed costs of $24,000, a contribution margin of $12 per unit, and needs to achieve a profit of $6,000. How many units must be sold? 2,000 units 2,500 units 3,000 units 4,000 units None 17. Which of the following statements is true about activity-based costing (ABC)? ABC is used to allocate only direct costs ABC allocates overheads based on activities that drive costs ABC is not suitable for manufacturing industries ABC only allocates variable costs None 18. Which variance shows the difference between actual hours worked and standard hours allowed? Labour rate variance Labour efficiency variance Overhead volume variance Material usage variance None 19. If the standard labour rate is $15 per hour, actual hours worked are 1,200, and the actual rate is $16 per hour, what is the labour rate variance? $1,200 Favourable $1,200 Adverse $1,800 Favourable $1,800 Adverse None 20. A company manufactures 10,000 units with a total variable cost of $50,000. If production is increased to 15,000 units, what is the new total variable cost? $50,000 $60,000 $70,000 $75,000 None 21. The predetermined overhead rate is calculated by dividing: Total fixed costs by number of units produced Estimated overhead costs by estimated activity base Actual overhead costs by actual activity level Total costs by total sales revenue None 22. If a company has a contribution margin of $40 per unit and fixed costs of $80,000, how many units must be sold to break even? 2,000 units 2,000 units 3,000 units 4,000 units None 23. Which of the following best defines an opportunity cost? The cost recorded in the financial statements The benefit foregone by choosing one alternative over another The direct material cost incurred in production The cost that remains fixed regardless of activity level None 24. In a flexible budget, the budgeted cost for each cost item: Remains fixed irrespective of activity levels Changes based on the actual level of activity Is set based on total production costs Is unrelated to production volume None 25. A company absorbs overheads based on machine hours. If budgeted overheads are $90,000 and budgeted machine hours are 10,000, what is the absorption rate per machine hour? $9 $10 $11 $12 None 26. Which of the following best describes variable cost behaviour? Total variable cost changes with activity level, but cost per unit remains constant Total variable cost remains constant, but cost per unit changes with activity level Total variable cost and cost per unit both remain constant Total variable cost decreases as production increases None 27. If actual material cost is $25,000 and the standard material cost is $22,000, what is the material cost variance? $3,000 Favourable $3,000 Adverse $4,000 Favourable $4,000 Adverse None 28. The break-even point in sales dollars can be calculated as: Fixed Costs / Contribution Margin Ratio b Total Sales / Total Variable Costs Contribution Margin / Fixed Costs Fixed Costs / Total Sales None 29. Which of the following statements about under-absorbed overheads is true? Actual overheads are less than absorbed overheads b Absorbed overheads are greater than actual overhead Actual overheads are more than absorbed overheads It leads to an overestimation of profit None 30. If a factory has normal capacity of 20,000 machine hours and actual machine hours used are 18,000, which variance arises? Idle capacity variance Fixed overhead volume variance Labour rate variance Sales volume variance None 31. In process costing, equivalent units of production are calculated to: Assign costs to partially completed units Calculate cost of completed units only Determine the selling price None 32. Which costing method involves calculating costs for each stage of the production process? Job costing Batch costing Process costing Activity-based costing None 33. If sales revenue is $200,000, variable costs are $120,000, and fixed costs are $50,000, what is the contribution margin ratio? 30% 40% 60% 75% None 34. Which of the following is the correct formula for calculating the predetermined overhead rate? Budgeted Overheads / Budgeted Units Produced b) Budgeted Budgeted Overheads / Budgeted Activity Level Actual Overheads / Actual Labour Hours Budgeted Sales / Budgeted Variable Costs None 35. If the standard hours for actual production are 1,500 and the actual hours worked are 1,400, what is the labour efficiency variance if the standard rate is $20 per hour? $1,000 Favourable $2,000 Favourable $1,000 Adverse $2,000 Adverse None 36. A company has a contribution margin of $25 per unit and fixed costs of $50,000. How many units must be sold to achieve a profit of $25,000? 1,500 units 2,000 units 2,500 units 3,000 units None 37. In a cost sheet, the allocation of factory rent to various production departments is an example of: Cost absorption Cost apportionment Cost reallocation Cost budgeting None 38. If actual output is greater than budgeted output, the fixed overhead volume variance will be: Favourable Adverse Zero Equal to the efficiency variance None 39. Which of the following costs is treated as a period cost under marginal costing? Direct materials Direct labour Fixed manufacturing overheads Variable manufacturing overheads None 40. If a company has sales of $300,000, variable costs of $180,000, and fixed costs of $70,000, what is the net profit? $50,000 $60,000 $70,000 $80,000 None 1 out of 4 Great job on taking the INCOC Test! We appreciate your interest in test. Look out for results and future opportunities. Stay Connected !! Your quiz time is about to finish. Few seconds left. Time's upYou cannot switch tabs while taking this quiz!You are not allowed to switch tabs violation has been recorded.you cannot minimize full screen mode!You are not allowed to minimize full screen while taking this quiz, violation has been recorded.Access denied! 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