Q. In a flexible budget, costs are adjusted based on what factor?
-
A.
Fixed costs only
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B.
Variable costs only
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C.
Actual level of activity
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D.
Projected sales revenue
Solution
A flexible budget adjusts costs based on the actual level of activity.
Correct Answer:
C
— Actual level of activity
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Q. In cost control, what is the primary focus?
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A.
Maximizing revenue
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B.
Minimizing costs
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C.
Ensuring quality
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D.
Increasing market share
Solution
Cost control primarily focuses on minimizing costs while maintaining quality.
Correct Answer:
B
— Minimizing costs
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Q. In marginal costing, which costs are treated as period costs?
-
A.
Fixed manufacturing costs
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B.
Variable manufacturing costs
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C.
Direct materials costs
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D.
Direct labor costs
Solution
In marginal costing, fixed manufacturing costs are treated as period costs and not included in product costs.
Correct Answer:
A
— Fixed manufacturing costs
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Q. What is the primary focus of cost-volume-profit (CVP) analysis?
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A.
To analyze the impact of fixed costs on profit
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B.
To determine the relationship between costs, volume, and profit
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C.
To calculate the total cost of production
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D.
To assess the efficiency of production processes
Solution
CVP analysis focuses on understanding the relationship between costs, volume, and profit.
Correct Answer:
B
— To determine the relationship between costs, volume, and profit
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Q. What type of cost is associated with the opportunity lost when choosing one alternative over another?
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A.
Sunk cost
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B.
Fixed cost
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C.
Variable cost
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D.
Opportunity cost
Solution
Opportunity cost represents the potential benefits lost when one alternative is chosen over another.
Correct Answer:
D
— Opportunity cost
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Q. Which costing method includes both fixed and variable costs in product costs?
-
A.
Marginal costing
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B.
Absorption costing
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C.
Direct costing
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D.
Activity-based costing
Solution
Absorption costing includes both fixed and variable costs in product costs.
Correct Answer:
B
— Absorption costing
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Q. Which of the following is a characteristic of fixed costs?
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A.
They vary with production levels
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B.
They remain constant regardless of production levels
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C.
They are always controllable
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D.
They are only incurred in the short term
Solution
Fixed costs remain constant regardless of production levels within a relevant range.
Correct Answer:
B
— They remain constant regardless of production levels
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Q. Which of the following is NOT a component of a standard cost system?
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A.
Direct materials standard
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B.
Direct labor standard
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C.
Variable overhead standard
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D.
Actual cost incurred
Solution
Actual cost incurred is not a component; standard costs are predetermined.
Correct Answer:
D
— Actual cost incurred
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Q. Which of the following is NOT a component of total cost in cost control?
-
A.
Direct materials
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B.
Direct labor
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C.
Selling expenses
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D.
Opportunity cost
Solution
Opportunity cost is not a direct component of total cost in cost control.
Correct Answer:
D
— Opportunity cost
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