This quiz works best with JavaScript enabled. Home > Accounting > Cost Accounting > Variable Costing > Variable Costing – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Variable Costing Quiz 1 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Under absorption or full costing, managerial decisions are based on A) Profit. B) Contribution. C) Profit volume ratio. D) None of the above. Show Answer Correct Answer: A) Profit. 2. The shape of Average cost is A) Upward sloping. B) Downward sloping. C) U shaped. D) None of above. Show Answer Correct Answer: C) U shaped. 3. Indirect costs are ..... A) Costs that do not change with output. B) Costs that are essential but not directly related to manufacturing. C) Costs directly involved with making the product. D) Money spent on a regular basis. Show Answer Correct Answer: B) Costs that are essential but not directly related to manufacturing. 4. The other name of marginal costing is ..... A) Direct costing. B) Variable costing. C) Incremental costing. D) All of the above. Show Answer Correct Answer: D) All of the above. 5. The payment made to the following is cost of direct labour. A) Machinist. B) Supervisor. C) Inspector. D) Sweeper. Show Answer Correct Answer: A) Machinist. 6. Cost, which is related to specific cost object and economically traceable, will be classified as A) Direct cost. B) Indirect cost. C) Full cost. D) Period cost. Show Answer Correct Answer: A) Direct cost. 7. In the long run ..... A) All inputs are fixed. B) All input are variable. C) At least one input is variable and one input is fixes. D) At most one input is variable and one input is fixed. Show Answer Correct Answer: B) All input are variable. 8. Total variable cost ..... as output increases, and total fixed cost ..... as output increases. A) Increases; increases. B) Increases; decreases. C) Increases; does not change. D) Does not change; does not change. Show Answer Correct Answer: C) Increases; does not change. 9. Variable cost is A) Long run ATC stays the same as the quantity of output changes. B) Fixed + variable cost. C) Costs that vary with the output (Q) produced. D) An explicit cost. Show Answer Correct Answer: C) Costs that vary with the output (Q) produced. 10. If a firm does not produce any output, its total cost is equal to A) Zero. B) Its fixed costs. C) Its variable costs. D) Its marginal cost. Show Answer Correct Answer: B) Its fixed costs. 11. The following is(are) the overhead cost(s) A) Factory expenses. B) Selling expenses. C) Distribution expenses. D) All of the above. Show Answer Correct Answer: D) All of the above. 12. If a firm uses variable costing, A) Its profits fluctuate with sales. B) Its product costs include variable selling and administrative costs. C) It calculates in idle facility variation. D) Its product cost per unit changes because of changes in the number of units produced. Show Answer Correct Answer: A) Its profits fluctuate with sales. 13. What cot are treated as product costs under variable costing? A) All variable costs. B) All direct costs only. C) All manufacturing costs. D) Only variable production costs. Show Answer Correct Answer: D) Only variable production costs. 14. Total cost is a sum of Fixed cost and A) Fixed revenue. B) Variable cost. C) Average cost. D) None of above. Show Answer Correct Answer: B) Variable cost. 15. What is a cost? A) Something the company receives. B) The price of a product. C) Something the company must pay. D) Something the company sells. Show Answer Correct Answer: C) Something the company must pay. 16. Costs that do not change when the quanity of output produced changes? A) Fixed Costs. B) Variable Costs. C) Explicit Costs. D) Implicit Costs. Show Answer Correct Answer: A) Fixed Costs. 17. Total Costs / Quantity = ..... A) Marginal Cost. B) Average Total Cost. C) Implicit Cost. D) Explicit Cost. Show Answer Correct Answer: B) Average Total Cost. 18. Input costs that may not have a direct outlay of money. Value of the opportunity cost. A) Fixed Cost. B) Variable Cost. C) Implicit Cost. D) Explicit Cost. Show Answer Correct Answer: C) Implicit Cost. 19. Raw materials, packaging, wages/labour costs are examples of A) Total costs. B) Fixed costs. C) Variable costs. D) Benefits. Show Answer Correct Answer: C) Variable costs. 20. Which of the following is a variable cost in the short run? A) Rent of the factory. B) Wages paid to factory workers. C) Interest payments on borrowed financial capital. D) Salaries paid to upper management. Show Answer Correct Answer: B) Wages paid to factory workers. Next →Related QuizzesCost Accounting QuizzesAccounting QuizzesVariable Costing Quiz 2Variable Costing Quiz 3Variable Costing Quiz 4 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books