This quiz works best with JavaScript enabled. Home > Finance > Accounting > Cost Accounting > Variable Costing > Variable Costing – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Variable Costing Quiz 2 (29 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A company wishes to increase labour productivity. All other things being equal, this is most likely to be achieved if the company A) Reduces the wages it pays its employees. B) Employs more workers. C) Invests in more capital equipment. D) Reduces current output. Show Answer Correct Answer: C) Invests in more capital equipment. 2. Under Absorption costing, fixed manufacturing overhead A) Remains on the income statement until sold. B) Remains on the balance sheet. C) Remains on the balance sheet until sold. D) Remains on the income statement. Show Answer Correct Answer: C) Remains on the balance sheet until sold. 3. The quantity of input which minimizes average total costs? A) Economy of scale. B) Diseconomies of scale. C) Efficient Scale. D) Inefficient Scale. Show Answer Correct Answer: C) Efficient Scale. 4. When all manufacturing cost is used in production are attached to the products, whether direct, or indirect, variable or fixed, this is called: A) Variable costing. B) Process costing. C) Job order costing. D) Absorption costing. Show Answer Correct Answer: D) Absorption costing. 5. The absorption costing method includes inventory:Fixed Factory Overhead and Variable Factory overhead A) No; Yes. B) No; No. C) Yes; No. D) Yes; Yes. Show Answer Correct Answer: D) Yes; Yes. 6. 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. 7. Total Revenue-Total Cost = ..... A) Profit. B) Marginal Revenue. C) Variable Revenue. D) Revenue. Show Answer Correct Answer: A) Profit. 8. If production is less than sales (in units), absorption costing net income will generally be A) Less than expected. B) Less than variable costing net income. C) Greater than variable costing net income. D) Equal to variable costing net income. Show Answer Correct Answer: B) Less than variable costing net income. 9. Rent, administrative costs, employee salary are examples of ..... A) Variable costs. B) Prices. C) Costs. D) Fixed costs. Show Answer Correct Answer: D) Fixed costs. 10. 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) Perpetual inventory. D) Conversion costing. Show Answer Correct Answer: B) Absorption costing. 11. What does marginal cost (MC) tell us? A) The increase in output that arises from an additional unit of input. B) The increase in total cost that arises from producing an additional unit of output. C) Is cost from fixed input. D) Is variable cost. Show Answer Correct Answer: A) The increase in output that arises from an additional unit of input. 12. Occurs when each addition of an input results in declining quantity of the output A) Diminishing Marginal Utility. B) Diminishing Marginal Profits. C) Diminishing Marginal Returns. D) Diminishing Marginal Costs. Show Answer Correct Answer: C) Diminishing Marginal Returns. 13. The property whereby long-run average total cost falls as the quantity of output increases. A) Economies of Scale. B) Constant Returns to Scale. C) Diseconomies of Scale. D) Efficient Scale. Show Answer Correct Answer: A) Economies of Scale. 14. An increase in output which arises from one additional unit of input. A) Marginal Physical Product. B) Marginal Revenue. C) Marginal Cost. D) Marginal Input. Show Answer Correct Answer: A) Marginal Physical Product. 15. The property whereby long-run average total cost stays the same as the quanity of output changes. A) Efficient Scale. B) Diseconomies of Scale. C) Constant Returns to Scale. D) Economies of Scale. Show Answer Correct Answer: C) Constant Returns to Scale. 16. Average variable cost (AVC) is A) The increase in output that arises from an additional unit of input. B) Variable cost divided by output. C) Costs that do not vary with the quantity of output produced. D) Explicit costs. Show Answer Correct Answer: B) Variable cost divided by output. 17. 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. 18. 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. 19. 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. 20. Marginal or Variable costing is the most useful technique for the ..... A) Shareholders. B) Management. C) Creditors. D) Auditors. Show Answer Correct Answer: B) Management. 21. Which of the following is NOT considered as variable input? A) Building. B) Operation manager. C) Worker. D) Raw materials. Show Answer Correct Answer: A) Building. 22. 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. 23. The sum of a business's fixed costs except for wages and the material costs. A) Inelastic Supply. B) Fixed Costs. C) Overhead. D) Variable Costs. Show Answer Correct Answer: C) Overhead. 24. 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 100, 000. B) P 180, 000. C) P 0. D) P 80, 000. Show Answer Correct Answer: C) P 0. 25. Average Total Costs are calculated by dividing Total Costs by A) Average Variable Costs. B) Price. C) Quantity or units produced. D) Revenue. Show Answer Correct Answer: C) Quantity or units produced. 26. The market value of all the inputs a firm uses in production. A) Explicit Costs. B) Marginal Costs. C) Implicit Costs. D) Total Costs. Show Answer Correct Answer: D) Total Costs. 27. 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. 28. 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. 29. The change in total product resulting from a change in a variable input is: A) Implicit product. B) Marginal product. C) Marginal cost. D) Average product. Show Answer Correct Answer: B) Marginal product. ← PreviousRelated QuizzesCost Accounting QuizzesAccounting QuizzesVariable Costing Quiz 1 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books