CIA Cost Accounting

Question 1

What is the main purpose of cost accounting?

Accepted Answer

To determine the cost of products and services.

Answer

To track income from sales.

Answer

To calculate employee salaries.

Answer

To monitor customer satisfaction.

Question 2

Which method is commonly used to allocate overhead costs in cost accounting?

Accepted Answer

Activity-based costing.

Answer

Weighted average method.

Answer

Standard costing.

Answer

Job-order costing.

Question 3

What is a fixed cost in cost accounting?

Accepted Answer

Cost that remains the same regardless of production level.

Answer

Cost that varies with production volume.

Answer

Cost that increases with production volume.

Answer

Cost that decreases with higher production.

Question 4

Which of the following is an example of variable cost?

Accepted Answer

Raw material costs.

Answer

Rent for office space.

Answer

Insurance premiums.

Answer

Salaries of management.

Question 5

What is the formula to calculate break-even point?

Accepted Answer

Answer

Fixed Costs / Contribution Margin.

Answer

Fixed Costs / Sales Price.

Answer

Fixed Costs / Variable Costs.

Answer

Sales Price / Fixed Costs.

Question 6

What is the purpose of standard costing in cost accounting?

Accepted Answer

To evaluate performance and control costs.

Answer

To set prices for customers.

Answer

To calculate taxes on income.

Answer

To measure sales revenues.

Question 7

What is an example of direct cost?

Accepted Answer

Raw materials used in production.

Answer

Depreciation on factory building.

Answer

Salary of the CEO.

Answer

Factory utilities cost.

Question 8

Which financial statement is used to report cost of goods manufactured?

Accepted Answer

Income Statement.

Answer

Balance Sheet.

Answer

Cash Flow Statement.

Answer

Owner’s Equity Statement.

Question 9

What is the purpose of job order costing?

Accepted Answer

To allocate costs to individual jobs or orders.

Answer

To allocate costs based on overall production.

Answer

To track raw material usage.

Answer

To calculate indirect expenses.