B. Acy Bachelor of Accountancy Cost and Managerial Accounting 1 — Questions and Answers
Question 1: Which costing method assigns actual overhead costs to products as they are incurred throughout the year?
- Predetermined overhead rate
- Normal costing
- Actual costing (Correct answer)
- Standard costing
Correct answer: Actual costing
Actual costing assigns real overhead costs as they occur, though this can cause fluctuating per-unit costs.
Question 2: In a job-order costing system, manufacturing overhead is applied using a:
- Actual overhead rate calculated weekly
- Predetermined overhead rate (Correct answer)
- Process cost rate
- Variable cost rate only
Correct answer: Predetermined overhead rate
A predetermined overhead rate, calculated before the period begins, is used to apply overhead to specific jobs.
Question 3: Which of the following is a period cost, not a product cost?
- Direct materials
- Factory rent
- Selling and administrative expenses (Correct answer)
- Factory supervisor wages
Correct answer: Selling and administrative expenses
Selling and administrative expenses are period costs expensed in the period incurred, not attached to inventory.
Question 4: The contribution margin ratio is calculated as:
- Net income divided by sales
- Gross margin divided by sales
- Contribution margin divided by sales (Correct answer)
- Variable costs divided by sales
Correct answer: Contribution margin divided by sales
The contribution margin ratio equals contribution margin (sales minus variable costs) divided by sales revenue.
Question 5: Under variable costing, fixed manufacturing overhead is:
- Included in product cost
- Expensed in full in the period incurred (Correct answer)
- Capitalized and amortized
- Allocated to ending inventory
Correct answer: Expensed in full in the period incurred
Variable costing treats fixed manufacturing overhead as a period cost, expensing it entirely in the period incurred.
Question 6: Which variance measures the difference between actual direct labor hours worked and standard hours allowed, multiplied by the standard rate?
- Labor rate variance
- Labor efficiency variance (Correct answer)
- Labor mix variance
- Labor yield variance
Correct answer: Labor efficiency variance
The labor efficiency variance isolates whether more or fewer hours were used than the standard allowed for actual output.
B. Acy Bachelor of Accountancy Cost and Managerial Accounting 1
Which costing method assigns actual overhead costs to products as they are incurred throughout the year?