Cost Accounting Final Exam Questions: Multiple Choice

Summary

Cost accounting involves measuring, recording, and reporting product costs. Students get practice with multiple-choice questions on cost accounting topics.

Cost Accounting Basics

Cost accounting measures, records, and reports product costs. It is used to determine a product’s target cost. It is different from managerial accounting.

Costing Systems and Methods

Job order cost accounting systems track costs for individual jobs. Activity-based costing systems identify activities and assign costs to them. Variable costing and absorption costing differ in how they treat fixed manufacturing overhead.

Pricing and Variance Analysis

Cost-plus pricing sets prices based on costs plus a markup. Variance analysis compares actual costs to standard costs. Direct labor and direct materials variances show differences in price and quantity.

Decision Making and Budgeting

Cost accounting helps with decisions like whether to sell products assembled or unassembled. Budgeting involves planning for future cash flows and maintaining minimum cash balances.

Key terms

Cost-plus pricing

A pricing approach that adds a markup to the cost of a product.

Activity-based costing

A costing method that assigns costs to activities and then to products.

Variable costing

A costing method that includes only variable manufacturing costs in inventory.

Variance analysis

A process that compares actual costs to standard costs to identify differences.

Break-even point

The point at which total revenue equals total cost.

Contribution margin

The difference between sales revenue and variable costs.

Questions this document helps with

• How do you determine a product’s target cost using cost-plus pricing?
• What are the differences between variable costing and absorption costing?
• How do you calculate the contribution margin per unit of a limited resource?

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