This quiz works best with JavaScript enabled. Home > Finance > Accounting > Cost Accounting > Variable Costing > Variable Costing – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Variable Costing Quiz 1 (30 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 directly involved with making the product. C) Costs that are essential but not directly related to manufacturing. D) Money spent on a regular basis. Show Answer Correct Answer: C) 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) Supervisor. B) Inspector. C) Sweeper. D) Machinist. Show Answer Correct Answer: D) Machinist. 6. Cost, which is related to specific cost object and economically traceable, will be classified as A) Indirect cost. B) Direct cost. C) Period cost. D) Full cost. Show Answer Correct Answer: B) 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; decreases. B) Increases; increases. C) Does not change; does not change. D) Increases; does not change. Show Answer Correct Answer: D) Increases; does not change. 9. Variable cost is A) An explicit cost. B) Long run ATC stays the same as the quantity of output changes. C) Costs that vary with the output (Q) produced. D) Fixed + variable 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) Its variable costs. B) Its marginal cost. C) Zero. D) Its fixed costs. Show Answer Correct Answer: D) 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. Costs that do not change when the quanity of output produced changes? A) Fixed Costs. B) Implicit Costs. C) Variable Costs. D) Explicit Costs. Show Answer Correct Answer: A) Fixed Costs. 16. Total Costs / Quantity = ..... A) Explicit Cost. B) Average Total Cost. C) Marginal Cost. D) Implicit Cost. Show Answer Correct Answer: B) Average Total Cost. 17. Input costs that may not have a direct outlay of money. Value of the opportunity cost. A) Variable Cost. B) Implicit Cost. C) Fixed Cost. D) Explicit Cost. Show Answer Correct Answer: B) Implicit Cost. 18. Raw materials, packaging, wages/labour costs are examples of A) Variable costs. B) Total costs. C) Fixed costs. D) Benefits. Show Answer Correct Answer: A) Variable costs. 19. Which of the following is a variable cost in the short run? A) Wages paid to factory workers. B) Interest payments on borrowed financial capital. C) Rent of the factory. D) Salaries paid to upper management. Show Answer Correct Answer: A) Wages paid to factory workers. 20. Average product is defined as: A) Marginal product divided by the variable input. B) Total product divided by the total cost. C) Total product divided by marginal product. D) Total product divided by the variable input. Show Answer Correct Answer: D) Total product divided by the variable input. 21. 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. 22. If Sam's Sandwiches use 25p of material for each sandwich, what will be their variable costs for 10 sandwiches A) 2.5 x 10 = £ 25. B) 0.25/10 = 2.5p. C) 25 x 10 = £ 250. D) 10 x 0.25 = £ 2.50. Show Answer Correct Answer: D) 10 x 0.25 = £ 2.50. 23. Process of tracing direct costs and allocation of indirect costs is known as A) Direct assignment. B) Indirect assignment. C) Cost assignment. D) Economic assignment. Show Answer Correct Answer: C) Cost assignment. 24. 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. 25. Prime cost can be defined as: A) The total costs of operating the production department where the product is made. B) The cost of the first stage of the manufacture of a product. C) The total costs of manufacturing a product. D) The total direct costs of manufacturing a product. Show Answer Correct Answer: D) The total direct costs of manufacturing a product. 26. Additional cost associated by producing one additional unit of product. A) Emplicit Costs. B) Marginal Costs. C) Fixed Costs. D) Average Costs. Show Answer Correct Answer: B) Marginal Costs. 27. Direct costs are ..... A) Money spent on a regular basis. B) Costs that do not change with output. C) Costs that are essential but not directly related to manufacturing. D) Costs directly involved with making the product. Show Answer Correct Answer: D) Costs directly involved with making the product. 28. Variable Cost/Quantity = ..... A) Average Fixed Cost. B) Marginal Variable Cost. C) Average Variable Cost. D) Marginal Total Cost. Show Answer Correct Answer: C) Average Variable Cost. 29. Dara makes bracelets and sells them in her shop. Which is a fixed cost for Dara's business? A) The cost of the string. B) Rent for her shop. C) The cost of advertising. D) The cost of the beads. Show Answer Correct Answer: B) Rent for her shop. 30. 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) 100. B) 50. C) 150. D) 200. Show Answer Correct Answer: A) 100. Next →Related QuizzesCost Accounting QuizzesAccounting QuizzesVariable Costing Quiz 2 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books