This quiz works best with JavaScript enabled. Home > Accounting > Cost Accounting > Variable Costing > Variable Costing – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Variable Costing Quiz 3 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The inventory costing method that treats direct manufacturing costs and indirect manufacturing costs, both variable and fixed, as inventoriable costs is called A) Variable costing. B) Absorption costing. C) Conversion costing. D) Perpetual inventory. Show Answer Correct Answer: B) Absorption costing. 2. What does marginal cost (MC) tell us? A) Is cost from fixed input. B) Is variable cost. C) The increase in output that arises from an additional unit of input. D) The increase in total cost that arises from producing an additional unit of output. Show Answer Correct Answer: C) The increase in output that arises from an additional unit of input. 3. Occurs when each addition of an input results in declining quantity of the output A) Diminishing Marginal Utility. B) Diminishing Marginal Costs. C) Diminishing Marginal Returns. D) Diminishing Marginal Profits. Show Answer Correct Answer: C) Diminishing Marginal Returns. 4. The property whereby long-run average total cost falls as the quantity of output increases. A) Economies of Scale. B) Efficient Scale. C) Constant Returns to Scale. D) Diseconomies of Scale. Show Answer Correct Answer: A) Economies of Scale. 5. An increase in output which arises from one additional unit of input. A) Marginal Cost. B) Marginal Physical Product. C) Marginal Revenue. D) Marginal Input. Show Answer Correct Answer: B) Marginal Physical Product. 6. The property whereby long-run average total cost stays the same as the quanity of output changes. A) Constant Returns to Scale. B) Economies of Scale. C) Efficient Scale. D) Diseconomies of Scale. Show Answer Correct Answer: A) Constant Returns to Scale. 7. Average variable cost (AVC) is A) Explicit costs. B) Variable cost divided by output. C) The increase in output that arises from an additional unit of input. D) Costs that do not vary with the quantity of output produced. Show Answer Correct Answer: B) Variable cost divided by output. 8. Which scenario results in the Net Income under Full Costing to be equal to the Net Income under Variable Costing? A) Quantity Produced is equal to Quantity Sold. B) Quantity Produced is greater than Quantity Sold. C) Quantity Produced is less than Quantity Sold. D) None of above. Show Answer Correct Answer: A) Quantity Produced is equal to Quantity Sold. 9. When is Net Income under Absorption Costing less than Net Income under Variable Costing? A) Quantity Produced is equal to Quantity Sold. B) Quantity Produced is greater than Quantity Sold. C) Quantity Produced is less than Quantity Sold. D) None of above. Show Answer Correct Answer: C) Quantity Produced is less than Quantity Sold. 10. If production is greater than sales(units), then 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) Additional data is needed to be able to answer. Show Answer Correct Answer: A) Greater than variable costing net income. 11. Marginal or Variable costing is the most useful technique for the ..... A) Shareholders. B) Management. C) Auditors. D) Creditors. Show Answer Correct Answer: B) Management. 12. Which of the following is NOT considered as variable input? A) Worker. B) Building. C) Raw materials. D) Operation manager. Show Answer Correct Answer: B) Building. 13. The main difference between the SR and the LR is that A) The law of diminishing returns applies in the LR. B) All resources are variable in the LR. C) Fixed costs are more important to decision making in the LR. D) In the SR all resources are fixed. Show Answer Correct Answer: B) All resources are variable in the LR. 14. The sum of a business's fixed costs except for wages and the material costs. A) Overhead. B) Variable Costs. C) Fixed Costs. D) Inelastic Supply. Show Answer Correct Answer: A) Overhead. 15. Valene Company's 2017 fixed manufacturing overhead cost totaled P 100, 000 and variable selling costs totaled P 80, 000. Under variable costing method, how much is product cost? A) P 180, 000. B) P 80, 000. C) P 100, 000. D) P 0. Show Answer Correct Answer: D) P 0. 16. Average Total Costs are calculated by dividing Total Costs by A) Price. B) Quantity or units produced. C) Average Variable Costs. D) Revenue. Show Answer Correct Answer: B) Quantity or units produced. 17. The market value of all the inputs a firm uses in production. A) Implicit Costs. B) Explicit Costs. C) Total Costs. D) Marginal Costs. Show Answer Correct Answer: C) Total Costs. 18. Which of the three scenarios shows Net Income under Full Costing to be greater than the Net Income under Variable Costing A) Quantity Produced is equal to Quantity Sold. B) Quantity Produced is greater than Quantity Sold. C) Quantity Produced is less than Quantity Sold. D) None of above. Show Answer Correct Answer: B) Quantity Produced is greater than Quantity Sold. 19. Marginal cost curve cuts Average cost curve at its A) Highest point. B) Minimum point. C) Never cuts. D) None of above. Show Answer Correct Answer: B) Minimum point. 20. The change in total product resulting from a change in a variable input is: A) Average product. B) Marginal cost. C) Marginal product. D) Implicit product. Show Answer Correct Answer: C) Marginal product. ← PreviousNext →Related QuizzesCost Accounting QuizzesAccounting QuizzesVariable Costing Quiz 1Variable Costing Quiz 2Variable Costing Quiz 4 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books