MGT 402 Cost & Management Accounting - 2

22 Questions | Total Attempts: 857

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MGT 402 Cost & Management Accounting - 2


Questions and Answers
  • 1. 
     Fixed Cost and  Variable Cost are Division of cost by its behavior 
    • A. 

      True

    • B. 

      False

  • 2. 
    The variable cost per unit is the same amount for each unit produced
    • A. 

      True

    • B. 

      False

  • 3. 
    Semi Variable Cost also know as
    • A. 

      Variable cost

    • B. 

      Mixed cost

    • C. 

      Step fixed cost

  • 4. 
    _______  is a section of an organization that is responsible for producing profit
    • A. 

      Revenue Centre

    • B. 

      Investment Centre

    • C. 

      Profit Centre

  • 5. 
    Packaging department is example of __________
    • A. 

      Investment centre

    • B. 

      Profit Centre

    • C. 

      Cost centre

    • D. 

      Revenue Centre

  • 6. 
    Differential Cost or Incremental cost is difference of the costs of two or more alternatives.
    • A. 

      True

    • B. 

      False

  • 7. 
    The main purpose of cost accounting is to
    • A. 

      To reduce uncertainty

    • B. 

      Maximize profits

    • C. 

      Provide information to management for decision making

    • D. 

      Aid in the fixation of selling price;

  • 8. 
    Fixed cost per unit increases when
    • A. 

      Variable cost per unit increase

    • B. 

      Variable cost per unit decreases

    • C. 

      Production volume increases

    • D. 

      Production volume decreases

  • 9. 
    Variable cost per unit
    • A. 

      Varies when output varies

    • B. 

      Remains constant

    • C. 

      Increases when output increases

    • D. 

      Decrease when output decreases

  • 10. 
    Which of the followings is the reason of increase in total variable cost
    • A. 

      Increase in fixed cost

    • B. 

      Rise in interest on capital

    • C. 

      Increase in direct material cost

    • D. 

      Depreciation of machinery

  • 11. 
    Which of the followings is an example of fixed cost
    • A. 

      Direct material cost

    • B. 

      Works manager’s salary

    • C. 

      Depreciation of machinery

    • D. 

      Chargeable expenses

  • 12. 
    Cost accounting concepts include all of the following except
    • A. 

      Planning

    • B. 

      Controlling

    • C. 

      Sharing

    • D. 

      Costing

  • 13. 
    All are  product cost Except
    • A. 

      Direct material cost

    • B. 

      Factory overhead cost

    • C. 

      Administrative expenses

    • D. 

      Direct labor cost

  • 14. 
    Difference between the actual cost and applied cost is called
    • A. 

      Variance

    • B. 

      Normal cost

    • C. 

      Overhead absorption

    • D. 

      Variable Cost

  • 15. 
    Mark all correct statements.
    • A. 

      Applied cost is greater than the actual cost is called favorable variance

    • B. 

      Applied cost is greater than the actual cost is called unfavorable variance

    • C. 

      Over applied FOH cost is one when applied FOH is more then actual

    • D. 

      Over applied FOH cost is one when applied FOH is less then actual

  • 16. 
    Under/Over applied FOH cost can be adjusted in
    • A. 

      Entire Production

    • B. 

      Cost of Goods Sold

    • C. 

      Net profit

    • D. 

      All of the above

  • 17. 
    The applied factory overhead cost is less than the actual cost is called
    • A. 

      Unfavorable variance

    • B. 

      Favorable variance

  • 18. 
    Variable cost, Fixed cost which changes with in an alternatives and Opportunity cost are examples of 
    • A. 

      Irrelevant Cost

    • B. 

      Product Cost

    • C. 

      Relevant Cost

    • D. 

      Period Cost

  • 19. 
    Prime cost is also known as Direct cost
    • A. 

      True

    • B. 

      False

  • 20. 
    Total Manufacturing cost is also known as Factory cost.
    • A. 

      True

    • B. 

      False

  • 21. 
    Prime Cost  + Factory overhead = Factory cost
    • A. 

      True

    • B. 

      False

  • 22. 
    Conversion cost =  _________
    • A. 

      Prime cost + Factory overhead

    • B. 

      Indirect labor + Factory overhead

    • C. 

      Direct labor + factory overhead

    • D. 

      Indirect cost + factory overhead

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