MCQ On Standard Costing
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- 1.Variable costing is also known as:
- A.
Direct costing.
- B.
Indirect costing.
- C.
Marginal costing.
- D.
Both (A) and (C).
- 2.Using absorption costing, a unit of product includes what costs?
- A.
Direct materials and direct labor.
- B.
Direct materials, direct labor, and fixed overhead.
- C.
Direct materials, direct labor, and variable overhead.
- D.
Direct materials, direct labor, variable overhead, and fixed overhead.
- 3.
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Using the following data, determine the unit product cost under absorption costing.- A.
$22
- B.
$24
- C.
$28
- D.
$30
- 4.Using variable costing, a unit of product includes which costs?
- A.
Only direct materials and direct labor.
- B.
Direct materials, direct labor, and fixed overhead.
- C.
Direct materials, direct labor, and variable overhead.
- D.
Direct materials, direct labor, variable overhead, and fixed overhead
- 5.
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Using the following data, determine the unit product cost under variable costing.- A.
$22
- B.
$24
- C.
$28
- D.
$30
- 6.Product cost under absorption costing is characteristically:
- A.
Higher than under variable costing.
- B.
Lower than under variable costing.
- C.
Equal to variable costing.
- D.
Higher sometimes and lower sometimes than variable costing.
- 7.
- A.
Absorption costing makes distinctions between fixed and variable product costs.
- B.
Absorption costing is well suited to CVP analysis techniques.
- C.
Absorption costing provides useful tools to managers for planning and control.
- D.
To generate data for CVP analysis, considerable time would have to be invested to rework income statements constructed under absorption costing.
- 8.When production is equal to sales, which of the following is true?
- A.
No change occurs to inventories for either absorption costing or variable costing methods.
- B.
The use of absorption costing produces a higher net income than the use of variable costing.
- C.
The use of absorption costing produces a lower net income than the use of variable costing.
- D.
The use of absorption costing causes inventory value to increase more than they would through the use of variable costing.
- 9.Which of the following statements is (are) true?
- A.
Net operating income is not affected by changes in production under absorption costing.
- B.
Net operating income is not affected by changes in production under variable costing.
- C.
Both of the above statements are true.
- D.
Neither of the above statements is true.
- 10.A segment of a business responsible for both revenues and expenses would be referred to as:
- A.
A cost center.
- B.
An investment center.
- C.
A profit center.
- D.
Residual income.
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