Bcom Bachelor of Commerce Cost Accounting 2

Question 1

What is 'standard costing'?

Accepted Answer

A system using predetermined costs to measure performance against actual costs

Answer

Standard costing establishes predetermined costs for materials, labor, and overhead, then compares them to actual costs to identify variances.

Question 2

A favorable labor efficiency variance indicates that:

Accepted Answer

Actual hours worked were less than standard hours allowed

Answer

A favorable labor efficiency variance means workers completed production using fewer hours than the standard, reducing labor cost.

Question 3

In process costing, 'equivalent units' are used to:

Accepted Answer

Convert partially completed units into a measure of fully completed units

Answer

Equivalent units express the work done on partially complete units in terms of fully completed unit equivalents for cost allocation purposes.

Question 4

What does the term 'joint cost' refer to in cost accounting?

Accepted Answer

Costs incurred up to the split-off point in producing multiple products from a common process

Answer

Joint costs are incurred in a single process that simultaneously produces two or more products up to the point where they become separately identifiable.

Question 5

The 'relevant range' in cost accounting refers to:

Accepted Answer

The range of activity within which cost behavior assumptions remain valid

Answer

The relevant range is the span of activity levels over which fixed and variable cost classifications hold true for planning purposes.

Bcom Bachelor of Commerce Practice Test

Bcom Bachelor of Commerce Practice Test

Bcom Bachelor of Commerce Cost Accounting 2