This quiz works best with JavaScript enabled. Home > Accounting > Cost Accounting > Variable Costing > Variable Costing – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Variable Costing Quiz 2 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Average product is defined as: A) Total product divided by the total cost. B) Total product divided by marginal product. C) Total product divided by the variable input. D) Marginal product divided by the variable input. Show Answer Correct Answer: C) Total product divided by the variable input. 2. Under direct costing, which is classified as product costs? A) Only variable production costs. B) Only direct costs. C) All variable costs. D) All variable and fixed production costs. Show Answer Correct Answer: C) All variable costs. 3. If Sam's Sandwiches use 25p of material for each sandwich, what will be their variable costs for 10 sandwiches A) 10 x 0.25 = £ 2.50. B) 2.5 x 10 = £ 25. C) 25 x 10 = £ 250. D) 0.25/10 = 2.5p. Show Answer Correct Answer: A) 10 x 0.25 = £ 2.50. 4. Process of tracing direct costs and allocation of indirect costs is known as A) Direct assignment. B) Cost assignment. C) Indirect assignment. D) Economic assignment. Show Answer Correct Answer: B) Cost assignment. 5. Under variable costing, which is classified as product costs? A) Only variable production costs. B) Only direct material cost. C) All variable costs. D) All variable and fixed production costs. Show Answer Correct Answer: A) Only variable production costs. 6. Prime cost can be defined as: A) The total costs of manufacturing a product. B) The total direct costs of manufacturing a product. C) The cost of the first stage of the manufacture of a product. D) The total costs of operating the production department where the product is made. Show Answer Correct Answer: B) The total direct costs of manufacturing a product. 7. Additional cost associated by producing one additional unit of product. A) Fixed Costs. B) Average Costs. C) Marginal Costs. D) Emplicit Costs. Show Answer Correct Answer: C) Marginal Costs. 8. Direct 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: C) Costs directly involved with making the product. 9. Variable Cost/Quantity = ..... A) Marginal Variable Cost. B) Average Fixed Cost. C) Average Variable Cost. D) Marginal Total Cost. Show Answer Correct Answer: C) Average Variable Cost. 10. Dara makes bracelets and sells them in her shop. Which is a fixed cost for Dara's business? A) The cost of the beads. B) The cost of the string. C) The cost of advertising. D) Rent for her shop. Show Answer Correct Answer: D) Rent for her shop. 11. Suppose the first four units of a variable input generates corresponding total outputs of 200, 350, 450, 500. The marginal product of the third unit of input is: A) 50. B) 100. C) 150. D) 200. Show Answer Correct Answer: B) 100. 12. A company wishes to increase labour productivity. All other things being equal, this is most likely to be achieved if the company A) Employs more workers. B) Reduces the wages it pays its employees. C) Reduces current output. D) Invests in more capital equipment. Show Answer Correct Answer: D) Invests in more capital equipment. 13. Under Absorption costing, fixed manufacturing overhead A) Remains on the income statement until sold. B) Remains on the balance sheet until sold. C) Remains on the income statement. D) Remains on the balance sheet. Show Answer Correct Answer: B) Remains on the balance sheet until sold. 14. The quantity of input which minimizes average total costs? A) Diseconomies of scale. B) Inefficient Scale. C) Efficient Scale. D) Economy of scale. Show Answer Correct Answer: C) Efficient Scale. 15. When all manufacturing cost is used in production are attached to the products, whether direct, or indirect, variable or fixed, this is called: A) Process costing. B) Absorption costing. C) Variable costing. D) Job order costing. Show Answer Correct Answer: B) Absorption costing. 16. The absorption costing method includes inventory:Fixed Factory Overhead and Variable Factory overhead A) No; No. B) No; Yes. C) Yes; Yes. D) Yes; No. Show Answer Correct Answer: C) Yes; Yes. 17. The management accounting technique that spreads indirect manufacturing costs fairly across the range of products is called: A) Variable costing. B) Indirect costing. C) Allocation costing. D) Absorption costing. Show Answer Correct Answer: D) Absorption costing. 18. Total Revenue-Total Cost = ..... A) Profit. B) Revenue. C) Marginal Revenue. D) Variable Revenue. Show Answer Correct Answer: A) Profit. 19. If production is less than sales (in units), absorption costing net income will generally be A) Greater than variable costing net income. B) Less than variable costing net income. C) Equal to variable costing net income. D) Less than expected. Show Answer Correct Answer: B) Less than variable costing net income. 20. Rent, administrative costs, employee salary are examples of ..... A) Variable costs. B) Fixed costs. C) Costs. D) Prices. Show Answer Correct Answer: B) Fixed costs. ← PreviousNext →Related QuizzesCost Accounting QuizzesAccounting QuizzesVariable Costing Quiz 1Variable Costing Quiz 3Variable Costing Quiz 4 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books