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Cost Accounting Questions and Answers

This document contains 5 multiple choice questions related to cost accounting concepts. Question 1 asks about different costing systems, question 2 asks about allocating building costs between production and service departments, question 3 asks about the step-down method for allocating service department costs, question 4 asks about appropriate bases for allocating overhead in automated manufacturing, and question 5 describes how standard costs can motivate employees.

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608 views1 page

Cost Accounting Questions and Answers

This document contains 5 multiple choice questions related to cost accounting concepts. Question 1 asks about different costing systems, question 2 asks about allocating building costs between production and service departments, question 3 asks about the step-down method for allocating service department costs, question 4 asks about appropriate bases for allocating overhead in automated manufacturing, and question 5 describes how standard costs can motivate employees.

Uploaded by

Kyo Tie
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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1.

Costing system that charge the product with the use of an arbitrary overhead
application rate determined at the end of the period.
a. Normal costing
b. Actual costing
c. Job order costing
d. Process costing

2. A company has two productions and two service departments that are housed in
the same building. The most reasonable basis for allocating building costs (rent,
insurance, maintenance, security) to the production and service departments is:
a. Direct labor hours
b. Number of employees
c. Square feet of floor occupied
d. Direct materials used

3. The method of overhead allocation that usually starts with the service
department rendering the greatest amount of service to the greatest number of
other service departments and the progresses in descending order to the service
department rendering services to the least number of other service departments is
the:
a. Step method
b. Direct method
c. Step and direct methods
d. Reciprocal method

4. In highly automated manufacturing, all of the following may be appropriate bases


for manufacturing overhead application except:
a. machine hours
b. direct labor hours
c. number of setups
d. movement of materials

5. Which of the following is true concerning standard costs?


a. Standard costs are estimates of costs attainable only under the most ideal
conditions but rarely practicable.
b. Standard costs are difficult to use with the process costing system.
c. If probably used, standard can help motivate employees.
d. Unfavorable variances, material in amount, should be investigated but large
favorable variances need not be investigated

Answers:
1. a
2. c
3. a
4. c
5. c

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