📘 SUBJECT: Cost Accounting
Board Exam-Type Multiple Choice Questions (25 Items)
1. The cost of raw materials used in production is:
A. Direct materials
B. Direct labor
C. Manufacturing overhead
D. Selling expense
✔ Answer: A
2. Which of the following is considered a product cost?
A. Advertising expense
B. Sales commission
C. Direct labor
D. Office supplies
✔ Answer: C
3. Which method assigns fixed manufacturing overhead to inventory?
A. Variable costing
B. Absorption costing
C. Job order costing
D. Process costing
✔ Answer: B
4. What is the formula for calculating the contribution margin?
A. Sales - Variable costs
B. Sales - Fixed costs
C. Sales - Total costs
D. Sales - Taxes
✔ Answer: A
5. In which costing method are fixed costs considered period costs?
A. Job order costing
B. Absorption costing
C. Activity-based costing
D. Variable costing
✔ Answer: D
, 6. Which of the following is included in manufacturing overhead?
A. Direct materials
B. Direct labor
C. Factory utilities
D. Sales commissions
✔ Answer: C
7. The break-even point occurs when:
A. Fixed costs equal variable costs
B. Total revenue equals total costs
C. Contribution margin exceeds fixed costs
D. Total assets equal total liabilities
✔ Answer: B
8. What is the primary objective of cost-volume-profit analysis?
A. Determine the cost of production
B. Estimate future sales
C. Find the break-even point
D. Maximize net income
✔ Answer: C
9. Direct costs include:
A. Factory rent
B. Depreciation on machinery
C. Direct materials
D. Administrative salaries
✔ Answer: C
10. The formula for calculating cost of goods sold is:
A. Beginning inventory + Purchases - Ending inventory
B. Sales + Ending inventory - Beginning inventory
C. Beginning inventory + Purchases + Ending inventory
D. Sales - Gross profit
✔ Answer: A
11. Which of the following is a characteristic of process costing?
A. It assigns costs to individual units of production
B. It is used in mass production industries
C. It is suitable for job order production
D. It is used for custom manufacturing
✔ Answer: B
Board Exam-Type Multiple Choice Questions (25 Items)
1. The cost of raw materials used in production is:
A. Direct materials
B. Direct labor
C. Manufacturing overhead
D. Selling expense
✔ Answer: A
2. Which of the following is considered a product cost?
A. Advertising expense
B. Sales commission
C. Direct labor
D. Office supplies
✔ Answer: C
3. Which method assigns fixed manufacturing overhead to inventory?
A. Variable costing
B. Absorption costing
C. Job order costing
D. Process costing
✔ Answer: B
4. What is the formula for calculating the contribution margin?
A. Sales - Variable costs
B. Sales - Fixed costs
C. Sales - Total costs
D. Sales - Taxes
✔ Answer: A
5. In which costing method are fixed costs considered period costs?
A. Job order costing
B. Absorption costing
C. Activity-based costing
D. Variable costing
✔ Answer: D
, 6. Which of the following is included in manufacturing overhead?
A. Direct materials
B. Direct labor
C. Factory utilities
D. Sales commissions
✔ Answer: C
7. The break-even point occurs when:
A. Fixed costs equal variable costs
B. Total revenue equals total costs
C. Contribution margin exceeds fixed costs
D. Total assets equal total liabilities
✔ Answer: B
8. What is the primary objective of cost-volume-profit analysis?
A. Determine the cost of production
B. Estimate future sales
C. Find the break-even point
D. Maximize net income
✔ Answer: C
9. Direct costs include:
A. Factory rent
B. Depreciation on machinery
C. Direct materials
D. Administrative salaries
✔ Answer: C
10. The formula for calculating cost of goods sold is:
A. Beginning inventory + Purchases - Ending inventory
B. Sales + Ending inventory - Beginning inventory
C. Beginning inventory + Purchases + Ending inventory
D. Sales - Gross profit
✔ Answer: A
11. Which of the following is a characteristic of process costing?
A. It assigns costs to individual units of production
B. It is used in mass production industries
C. It is suitable for job order production
D. It is used for custom manufacturing
✔ Answer: B
