Capacity Analysis and Inventory Costing MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Capacity Analysis and Inventory Costing, a fundamental topic in the field of Cost Accounting. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Capacity Analysis and Inventory Costing MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of Capacity Analysis and Inventory Costing mcq questions that explore various aspects of Capacity Analysis and Inventory Costing problems. Each MCQ is crafted to challenge your understanding of Capacity Analysis and Inventory Costing principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace Cost Accounting tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Capacity Analysis and Inventory Costing MCQs are your pathway to success in mastering this essential Cost Accounting topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Capacity Analysis and Inventory Costing. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your Capacity Analysis and Inventory Costing knowledge to the test? Let's get started with our carefully curated MCQs!

Capacity Analysis and Inventory Costing MCQs | Page 7 of 11

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Q61.
The denominator of the fixed manufacturing cost rate is

a.

adjusted labor utilization

b.

unadjusted labor utilization

c.

material utilization

d.

capacity utilization

Discuss
Answer: (d).capacity utilization
Q62.
The costing method, in which the variable manufacturing costs are treated as inventoriable cost is called

a.

manufacturing costing

b.

absorption costing

c.

variable costing

d.

labor costing

Discuss
Answer: (c).variable costing
Q63.
If the selling price is $5000, variable manufacturing cost per unit is $1500 and variable marketing cost per unit is $500, then contribution margin per unit will be

a.

$7,000

b.

$3,000

c.

$4,000

d.

$5,000

Discuss
Answer: (b).$3,000
Q64.
In variable costing, an effect on cost volume profit relationship is driven by

a.

unit level of sales

b.

unit level of production

c.

unit level of inventory

d.

unit dividends

Discuss
Answer: (a).unit level of sales
Q65.
The fixed manufacturing cost under variable costing is

a.

inventoriable

b.

non-inventoriable

c.

high dividend

d.

low dividend

Discuss
Answer: (b).non-inventoriable
Q66.
When prices fall, the decrease in demand for the product when the competitors' prices are not met will be called

a.

downward supply spiral

b.

upward supply spiral

c.

downward demand spiral

d.

upward demand spiral

Discuss
Answer: (c).downward demand spiral
Q67.
The production volume variance under variable costing is

a.

must

b.

not a must

c.

non-inventoriable

d.

inventoriable

Discuss
Answer: (b).not a must
Q68.
The capacity of the company, which considers the operating interruptions such as holiday shutdown and maintenance time is called

a.

standard capacity

b.

actual capacity

c.

practical capacity

d.

theoretical costing

Discuss
Answer: (c).practical capacity
Q69.
In super variable costing, all costs other than direct material costs are recorded in the period

a.

of incurring

b.

of sale

c.

of manufacturing

d.

of indirect recording

Discuss
Answer: (a).of incurring
Q70.
The capacity utilization of the business, to satisfy average customer demand over a specific period of time is classified as

a.

seasonal capacity utilization

b.

normal capacity utilization

c.

standard capacity utilization

d.

theoretical capacity utilization

Discuss
Answer: (b).normal capacity utilization
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