CPA CPA Cost Accounting & Budgeting

Question 1

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

Accepted Answer

Activity-based costing (ABC)

Answer

Job order costing

Answer

Process costing

Answer

Variable costing

Question 2

In a standard cost system, an unfavorable direct labor efficiency variance indicates:

Accepted Answer

Actual labor hours exceeded standard hours allowed for actual output

Answer

Actual labor rate was higher than the standard rate

Answer

Fewer units were produced than budgeted

Answer

Actual overhead exceeded the applied overhead

Question 3

Which of the following costs would be included in a product's cost under absorption costing but NOT under variable costing?

Accepted Answer

Fixed manufacturing overhead

Answer

Direct materials

Answer

Direct labor

Answer

Variable manufacturing overhead

Question 4

A company uses a flexible budget. If actual output is higher than budgeted, the flexible budget will show:

Accepted Answer

Higher variable costs but the same fixed costs

Answer

The same costs as the static budget

Answer

Lower variable costs and lower fixed costs

Answer

Higher fixed costs proportional to output

Question 5

The contribution margin ratio is calculated as:

Accepted Answer

Contribution margin divided by sales revenue

Answer

Net income divided by total revenue

Answer

Gross profit divided by total revenue

Answer

Operating income divided by variable costs

Question 6

Under job order costing, which document accumulates all costs (direct materials, direct labor, and overhead) for a specific job?

Accepted Answer

Job cost sheet

Answer

Cost of production report

Answer

Materials requisition form

Answer

Work-in-process ledger summary