CIA Cost Accounting 4

Question 1

Which of the following is an example of an indirect cost in a manufacturing setting?

Accepted Answer

Factory supervisor's salary

Answer

A factory supervisor's salary is an indirect cost because it cannot be directly and conveniently traced to a specific product.

Question 2

In a job order costing system, costs are accumulated:

Accepted Answer

On a job cost sheet for each unique job or batch

Answer

Job order costing tracks costs on individual job cost sheets, making it ideal for custom or unique production runs.

Question 3

The margin of safety is calculated as:

Accepted Answer

Actual sales minus break-even sales

Answer

The margin of safety represents the amount by which actual or budgeted sales exceed the break-even sales level.

Question 4

When using the weighted-average method in process costing, costs from the prior period in beginning WIP inventory are:

Accepted Answer

Averaged together with current period costs

Answer

The weighted-average method blends beginning WIP costs with current period costs and spreads them over all equivalent units.

Question 5

Kaizen costing focuses on:

Accepted Answer

Continuous incremental cost reduction during production

Answer

Kaizen costing is a Japanese management approach that emphasizes ongoing, incremental cost improvements during the manufacturing process.

(CIA) Certified Industrial Accountant Practice Test