1. a. b. c. d.

2. a. b. c. d.

What is the primary purpose of job costing in accounting? To calculate fixed costs

To allocate overhead costs

To determine the selling price of a product

To track individual project or job costs

In job costing, direct labor costs are:

Always considered a variable cost

Allocated based on a predetermined overhead rate Tracked separately for each specific job or project

Not a significant factor in cost calculations

3.

method?

a. Fast food restaurants

b. Automobile manufacturing c. Custom home builders

d. Retail clothing stores

Which of the following industries is most likely to use job costing as its primary costing

4. Overhead costs in job costing are typically allocated to jobs based on: a. The actual direct labor hours worked

b. The number of units produced

c. A predetermined overhead rate

d. The total cost of materials used

5. What is the key benefit of using job costing for businesses? a. It simplifies cost tracking and accounting processes

b. It helps in setting uniform prices for all products

c. It provides detailed cost information for each job or project

d. It eliminates the need for budgeting and financial planning

6. In process costing, which type of industry is most likely to use this costing method? a. Custom furniture manufacturing

b. Soft drink bottling

c. Jewelry making

d. Graphic design services

7. Process costing is best suited for industries where: a. Each unit of production is identical

b. Customization of products is common

c. Production is project-based

d. There is no need to track production costs

8. Which of the following best describes how costs are allocated in process costing? a. Costs are assigned to individual jobs or projects.

b. Costs are allocated to departments or processes.

c. Costs are tracked by individual product lines.

d. Costs are allocated based on direct labor hours.

9. In process costing, when calculating the cost per unit, total costs are divided by the: a. Number of units produced

b. Number of units in each department

c. Total labor hours worked

d. Total overhead costs incurred

10. Which of the following industries is an example of one that typically uses process costing?

a. Custom jewelry production

b. Bulk chemical manufacturing

c. Art gallery management

d. High-end restaurant services

11. Which of the following is a key building block of managerial accounting? a. Financial statements

b. Cost accounting

c. Tax planning

d. External audit

12. What is the primary focus of managerial accounting compared to financial accounting? a. Reporting historical financial performance

b. Complying with generally accepted accounting principles (GAAP)

c. Providing information for decision-making and internal use

d. Preparing financial statements for external stakeholders

13. In managerial accounting, cost behavior refers to: a. How costs are classified on the income statement

b. The relationship between costs and the level of activity c. The process of allocating costs to products

d. The recording of historical costs in the general ledger

14. Which building block of managerial accounting involves setting performance targets, budgeting, and measuring actual performance against those targets?

a. Cost accounting

b. Financial analysis

c. Planning and control d. External reporting

15. When using activity-based costing (ABC) in managerial accounting, which cost allocation method is emphasized?

a. Direct labor cost allocation

b. Direct materials cost allocation

c. Overhead cost allocation based on machine hours

d. Overhead cost allocation based on cost driver activities

16. Cost-Volume-Profit (CVP) analysis primarily focuses on how changes in which factors affect a company's profitability?

a. Customer preferences

b. Sales volume, costs, and prices

c. Economic trends

d. Regulatory compliance

17. What is the breakeven point in CVP analysis? a. The point where sales revenue equals fixed costs

b. The point where variable costs exceed total revenue c. The point where total costs are minimized

d. The point where net income is zero

18. The contribution margin ratio is calculated as: a. Total revenue divided by total costs

b. Variable costs divided by total revenue

c. Gross profit divided by fixed costs

d. (Sales revenue variable costs) divided by sales revenue

19. If a company's contribution margin ratio is 40%, and its fixed costs are $50,000, what level of sales revenue is needed to achieve a $20,000 profit?

a. $120,000

b. $100,000

c. $175,000 d. $200,000

20. In CVP analysis, the margin of safety represents:

a. The difference between fixed and variable costs

b. The amount by which actual sales can drop before incurring losses c. The portion of the contribution margin used to cover fixed costs

d. The sales volume needed to reach the breakeven point

21. Managerial accounting is primarily concerned with:

a. Providing financial information to external stakeholders.

b. Preparing financial statements for tax purposes.

c. Assisting managers in making informed business decisions. d. Ensuring compliance with legal regulations.

22. In managerial accounting, costs that can be directly traced to a specific product or department are referred to as:

a. Direct costs

b. Indirect costs

c. Variable costs d. Fixed costs

23. Which of the following is a key objective of managerial accounting? a. Reporting financial performance to external investors.

b. Minimizing tax liability.

c. Enhancing overall organizational performance.

d. Meeting the requirements of financial accounting standards.

24. Managerial accounting often uses which of the following methods to allocate costs to products or services?

a. Historical cost allocation

b. Activity-based costing (ABC)

c. Random cost assignment

d. Non-systematic cost allocation

25. What does the operating leverage ratio measure in a company's financial performance? a. The degree to which a company relies on debt financing.

b. The ratio of variable costs to fixed costs.

c. The proportion of sales revenue allocated to marketing and advertising.

d. The impact of fixed costs on a company's profit as sales volume changes.

26. Company A sells a product for $20 per unit. The variable cost per unit is $12, and fixed costs amount to $10,000. What is the breakeven point in units?

a. 500 units

b. 1,250 units

c. 2,000 units d. 2,500 units

27. Company B has a contribution margin ratio of 30% and fixed costs of $15,000. If the company wants to achieve a target profit of $12,000, what is the required level of sales revenue? a. $90,000

b. $40,000

c. $60,000

d. $30,000

28. Company C has fixed costs of $30,000, a selling price of $50 per unit, and a variable cost of $20 per unit. If the company wants to earn a profit of $60,000, how many units must it sell?

a. 2,000 units

b. 3,000 units

c. 4,000 units d. 5,000 units

29. What is the key difference between fixed and variable costs in business?

a. Total fixed costs remain constant per unit of production, while total variable costs change. b. Fixed costs are directly tied to sales volume, while variable costs are not.

c. Fixed costs are incurred in the short term, while variable costs occur in the long term.

d. Fixed costs are easy to control, while variable costs are more challenging to manage.

30. If a business experiences an increase in production and, as a result, its total costs remain unchanged, what type of cost is likely to be fixed?

a. Direct labor costs

b. Raw material costs

c. Rent on factory space

d. Commission paid to salespeople