CCA CCA Cost Accounting & Management

Question 1

Which costing method assigns manufacturing overhead to products based on the activities that drive costs?

Accepted Answer

Activity-based costing (ABC)

Answer

Activity-based costing assigns overhead using multiple cost drivers tied to specific activities, giving a more accurate picture of product costs.

Question 2

A company has fixed costs of $120,000, a selling price of $40 per unit, and variable costs of $25 per unit. What is the break-even point in units?

Accepted Answer

8,000 units

Answer

Break-even = Fixed Costs ÷ Contribution Margin per unit = $120,000 ÷ ($40 – $25) = 8,000 units.

Question 3

Under absorption costing, which of the following is treated as a product cost?

Accepted Answer

Fixed manufacturing overhead

Answer

Absorption costing includes both variable and fixed manufacturing overhead as product costs, unlike variable costing.

Question 4

What does a favorable materials price variance indicate?

Accepted Answer

Material was purchased at less than standard price

Answer

A favorable materials price variance means the actual price paid for materials was lower than the standard price.

Question 5

Which of the following is a characteristic of a joint cost?

Accepted Answer

It is incurred before the split-off point in producing multiple products

Answer

Joint costs arise from a single production process that simultaneously produces two or more products before the split-off point.

(CCA) Certified Corporate Accountant Practice Test