Cost Allocation(Cost Accounting ) Questions and answers for exam Preparation

Question 1. The net realizable value is added into separate costs to calculate

split off costs
final cost of direct labor
final sales
final costs

Explanation:-

Answer: Option C. -> final sales
Answer: (c).final sales

Question 2. An expected future cost which diverges in unconventional course of action is known as

partial cost
total cost
irrelevant cost
relevant cost

Explanation:-

Answer: Option D. -> relevant cost
Answer: (d).relevant cost

Question 3. The third step in constant gross margin percentage NRV Method to allocate joint cost is to compute

Gross margin percentage
total production cost of each product
allocated joint costs
cost of split off point

Explanation:-

Answer: Option C. -> allocated joint costs
Answer: (c).allocated joint costs

Question 4. The gross margin percentage in constant gross-margin percentage NRV method is based on

total labor costs
total production
total revenues
total costs

Explanation:-

Answer: Option B. -> total production
Answer: (b).total production

Question 5. If the net realizable value is $20000 and the separable costs are $18000, then the final sales will be

$20,000
$18,000
$2,000
$38,000

Explanation:-

Answer: Option D. -> $38,000
Answer: (d).$38,000

Question 6. The value of sales, consider sales value at split off method is of

entire direct material of accounting period
entire production of accounting period
portion of production of accounting period
entire indirect material of accounting period

Explanation:-

Answer: Option B. -> entire production of accounting period
Answer: (b).entire production of accounting period

Question 7. In customer cost hierarchy, the costs of all activities incurred to sell group of units to end consumers are classified as

customer sustaining costs
customer output unit-level costs
customer batch-level costs
corporate sustaining costs

Explanation:-

Answer: Option C. -> customer batch-level costs
Answer: (c).customer batch-level costs

Question 8. If the flexible budget amount is $7500 and the sales volume variance is $6500, then the static budget amount would be

$7,500
$6,500
$1,000
$10,000

Explanation:-

Answer: Option C. -> $1,000
Answer: (c).$1,000

Question 9. The customer sustaining costs, customer batch-level costs and customer output-unit level costs are classified as

customer level indirect costs
customer level direct costs
corporate level direct costs
corporate level indirect costs

Explanation:-

Answer: Option A. -> customer level indirect costs
Answer: (a).customer level indirect costs

Question 10. For increasing sales, the decrease in selling price, below the selling price list is known as

partial discount
corporate discount
treasury discount
price discount

Explanation:-

Answer: Option D. -> price discount
Answer: (d).price discount