Managerial Accounting Quiz on Costs Concept

Refresh or test your managerial accounting knowledge on cost concepts:

Multiple choice question

1. In making managerial decisions, relevant information is
a. Future cost that differ between alternatives
b. Future costs that do not differ between alternatives
c. Past costs that differ between alternatives
d. Past costs that do not differ between alternatives

2. The role of historical data from the accounting system in making managerial decisions is
a. To assist in making productions that inputs to a decision model
b. To serve directly as inputs in decision models
c. To assist in making predictions about other information needed for making decisions
d. All of the above

3. The tracing or reassigning of costs to one or more cost objectives is referred to as:
a. Cost allocation
b. Historical costing
c. Step up costing
d. Cost apportionment
e. All of the above

4. The three main categories of manufacturing costs are:
a. Direct materials, direct labor and factory overheads
b. Direct labor, indirect labor and overtime premiums
c. Raw materials, work in progress and finished goods
d. Raw materials, direct labor and finished goods

5. According to economic theory, costs play a role in price determination when
a. The company operates in an industry characterized as having imperfect competition
b. A company is selling commodities such as wheat and rice
c. Perfect competition exists
d. All of the above

6. When a multiproduct plant is being operated at capacity, the products which should be emphasized are those that provide
a. The highest contribution margin per unit of the limited resource
b. The highest contribution margin per unit of product
c. The highest contribution margin per sales dollar
d. The highest contribution margin ratio

1 to 6 = a

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