Top 150+ Solved Cost Management MCQ Questions Answer
Q. The standard cost of a product is:
a. The average unit cost of products produced during a particular period
b. The unit cost of products incurred at the start of a particular period
c. The average unit cost of products produced in the previous period
d. The planned unit cost of products produced during a particular period
Q. What term is used to describe the level of efficiency achieved that appropriately trained, motivated and resourced employees can achieve in the long-run?
a. Standard performance
b. Standard hours
c. Standard ex ante
d. Standard ex post
Q. A standard that represents the most likely scenario can be referred to as the:
a. Average standard
b. Attainable standard
c. Basic standard
d. Ideal standard
Q. When calculating cost variances under a standard costing system we must:
a. Compare standard costs with actual costs at the standard level of activity
b. Compare actual costs with those that were budgeted
c. Compare actual costs with standard costs at the actual level of output
d. Compare actual outputs against budgeted outputs
Q. When carrying out variance analysis ideally, we should:
a. Look at controllable adverse and favourable variances that are over a predetermined amount
b. Look at adverse variances that are over a predetermined amount
c. Look at all variances
d. Look at all adverse and favourable variances that are over a predetermined amount
Q. The efficiency ratio can be defined as:
a. Actual hours worked / budgeted labour hours
b. Standard hours produced/ actual labour hours worked
c. Standard hours produced / budgeted labour hours
d. Actual hours worked / actual production based on standard hours
Q. The labour rate variance can be calculated by the following equation:
a. (Standard hours - actual hours) x actual wage rate
b. (Standard wage rate - actual wage rate) x standard hours worked
c. (Standard wage rate - actual wage rate) x actual hours worked
d. Budgeted labour costs - actual labour costs
Q. In August actual material used amounted to 5,650 kg, budgeted output was 1,000 units and standard material usage was 5 kg per unit. Actual output was 1,075 units. If the standard material cost of each product is 25 the material efficiency variance will be:
a. 3,250 favourable
b. 1,375 favourable
c. 3,250 adverse
d. 1,375 adverse
Q. An adverse material usage variance together with a favourable materials price variance could suggest that:
a. We are paying the same for our materials but we are using more than expected
b. We are paying higher prices for our materials than expected
c. We are paying less for our materials than expected but we are using more materials
d. We are using less material than expected but in total we are paying more than we should
Q. An adverse labour efficiency variance together with a favourable labour rate variance may mean that:
a. The business is paying a higher hourly rate than the standard
b. Less labour hours are needed to make the same amount of output
c. Less skilled staff are being used in production
d. More products are being made per hour
Q. The formula for calculating the variable overhead total variance is:
a. (Standard hours less actual hours) x variable overhead absorption rate
b. Actual variable overhead less (actual hours x actual hours worked x variable overhead absorption rate)
c. Actual variable overhead expenditure less budgeted variable overhead expenditure
d. Actual variable overhead less (standard hours x actual production x variable overhead absorption rate)
Q. The formula for calculating the fixed overhead volume variance is:
a. Budgeted fixed expenditure less (actual hours x actual production x fixed overhead absorption rate)
b. Budgeted fixed expenditure less (actual hours x fixed overhead absorption rate)
c. Actual fixed overhead less (standard hours x actual production x fixed overhead absorption rate)
d. Budgeted fixed expenditure less (standard hours x actual production x fixed overhead expenditure variance)
Q. -------- are the factor which have direct cause and effect relationship with cost
a. Cost object
b. Cost pool
c. Cost driver
d. Cost centre
Q. ------------ is also known as ‘Transaction Costing’.
a. Target costing
b. Kaizen costing
c. Throughput costing
d. Activity based costing