Top 80+ Solved Strategic Cost Accounting MCQ Questions Answer
Q. Marginal costing is a …………….
a. Method of costing
b. Technique of costing
c. Process of costing
d. None of the above
Q. Margin of safety may be improved by
a. Increasing sales volume
b. Lowering variable cost
c. Lowering fixed cost
d. All of the above
Q. PV ratio may be improved by
a. Increasing the sales price
b. Lowering variable cost
c. Lowering fixed cost
d. None of the above
Q. For decision making purpose, which is more suitable to the management
a. Standard costing
b. Marginal costing
c. Absorption costing
d. Traditional costing
Q. Increasing in selling price
a. Increase PV ratio
b. Decrease break even point
c. Increase margin of safety
d. None of the above
Q. Increase in variable cost
a. Increases in PV ratio
b. Decreases breakeven point
c. Increases margin of safety
d. None the above
Q. Marginal costing technique helps the management in deciding
a. Price of the product
b. Make or buy decision
c. To accepts fresh orders at low price
d. All of the above
Q. Which of the following is true at breakeven point
a. Contribution = fixed cost
b. Sales = total cost
c. Sales curve cuts total cost line
d. All of the above
Q. Activity-based costing:
a. Uses a plant-wide overhead rate to assign overhead
b. Is not expensive to implement
c. Typically applies overhead costs using direct labor-hours
d. Uses multiple activity rates
Q. Assigning overhead using ABC often:
a. Shifts overhead costs from high-volume products to low-volume products
b. Shifts overhead costs from low-volume products to high-volume products
c. Provides the same results as traditional costing
d. Requires one predetermined overhead rate
Q. Painting the product would be an example of which activity level groups
a. Facility-level activity
b. Product-level activity
c. Unit-level activity
d. Batch-level activity
Q. Plant depreciation is an example of which activity-level group?
a. Unit-level activity
b. Facility-level activity
c. Batch-level activity
d. Product-level activity
Q. Assume that a company produces two products in a manufacturing plant. One is a low volume specialty product that is produced on a demand pull basis, while the other is a high volume product that is produced on a push basis for inventory. A production volume based cost allocation system would tend to
a. Accurately reflect the product cost of the two products.
b. Overstate the product cost of the low volume product.
c. Understate the product cost of the low volume product.
d. Overstate the product cost of both products.
Q. In the situation stated in the question above, the company’s net income based on a productionvolume based system will tend to be ________ relative to net income based on an activity based costing system.
a. Overstated.
b. Understated.
c. Overstated for the low volume product and understated for the high volume product.
d. b and