BEC Cost Accounting and Management Accounting 3

Question 1

Activity-based costing (ABC) differs from traditional costing primarily because ABC:

Accepted Answer

Assigns overhead using multiple cost drivers linked to specific activities

Answer

Uses a single overhead rate based on direct labor hours

Answer

Excludes fixed overhead from product costs entirely

Answer

Calculates overhead based on machine hours only

Question 2

When making a make-or-buy decision, which costs are most relevant to the analysis?

Accepted Answer

Avoidable costs and opportunity costs

Answer

Sunk costs and historical costs

Answer

Allocated fixed overhead and depreciation

Answer

Full absorption costs and standard costs

Question 3

The Theory of Constraints (TOC) primarily focuses on:

Accepted Answer

Maximizing throughput by identifying and managing bottleneck resources

Answer

Minimizing all costs throughout the production process

Answer

Eliminating non-value-added activities across the supply chain

Answer

Implementing lean manufacturing techniques to reduce waste

Question 4

Under variable costing, which of the following is treated as a period cost rather than a product cost?

Accepted Answer

Fixed manufacturing overhead

Answer

Direct materials

Answer

Direct labor

Answer

Variable manufacturing overhead

Question 5

Process costing is best suited for which type of production environment?

Accepted Answer

Petroleum refining

Answer

Custom furniture manufacturing

Answer

Large construction projects

Answer

Commercial aircraft manufacturing

Question 6

The break-even point in units is calculated as:

Accepted Answer

Total fixed costs ÷ Contribution margin per unit

Answer

Total variable costs ÷ Selling price per unit

Answer

Total fixed costs ÷ Selling price per unit

Answer

Total costs ÷ Contribution margin ratio

Question 7

Which of the following is a characteristic of a relevant cost for decision-making purposes?

Accepted Answer

It is a future cost that differs between the alternatives being evaluated

Answer

It is a historical cost already recorded in the accounting system

Answer

It does not differ between the decision alternatives being considered

Answer

It is allocated from a common overhead cost pool