Cost Allocation MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Cost Allocation, 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 Cost Allocation 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 Cost Allocation mcq questions that explore various aspects of Cost Allocation problems. Each MCQ is crafted to challenge your understanding of Cost Allocation 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 Cost Allocation 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 Cost Allocation. 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 Cost Allocation knowledge to the test? Let's get started with our carefully curated MCQs!

Cost Allocation MCQs | Page 3 of 6

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Q21.
The division of all the costs related to customers on the basis of different cost allocation bases or cost drivers are called

a.

customer cost hierarchy

b.

customer profitability hierarchy

c.

treasury costing hierarchy

d.

partial costing hierarchy

Discuss
Answer: (a).customer cost hierarchy
Q22.
In customer cost hierarchy, the costs of all the incurred activities to sell a unit of product are classified as

a.

customer sustaining costs

b.

customer output unit-level costs

c.

customer batch-level costs

d.

corporate sustaining costs

Discuss
Answer: (b).customer output unit-level costs
Q23.
Which of the following do not include among major categories of corporate costs?

a.

human resource management costs

b.

corporate administration costs

c.

treasury costs

d.

discretionary costs

Discuss
Answer: (d).discretionary costs
Q24.
In customer cost hierarchy, the costs of those activities that cannot be traced to distribution channels or individual customers are called

a.

discretionary channel costs

b.

corporate-sustaining costs

c.

distribution-channel costs

d.

engineered resource costs

Discuss
Answer: (b).corporate-sustaining costs
Q25.
If an actual result in static budget is $2500 and the corresponding budgeted amount is $2200, then the static budget variance will be

a.

$3,000

b.

$300

c.

$4,700

d.

$4,500

Discuss
Answer: (b).$300
Q26.
In customer cost hierarchy, the costs of individual customer support activities are classified as

a.

discretionary channel costs

b.

corporate-sustaining costs

c.

distribution-channel costs

d.

customer-sustaining costs

Discuss
Answer: (d).customer-sustaining costs
Q27.
The first step in constant gross margin percentage, Net realizable value (NRV) method is to allocate joint, to compute

a.

Gross margin percentage

b.

total production cost of each product

c.

allocated joint costs

d.

cost of split off point

Discuss
Answer: (a).Gross margin percentage
Q28.
An additional cost, incurred for some specific activity to bring processed product on to next production stage is

a.

partial cost

b.

relevant cost

c.

incremental cost

d.

irrelevant cost

Discuss
Answer: (c).incremental cost
Q29.
A joint cost allocation method is based on relative value of total sales, at the point of split off is classified as

a.

sales value at split off method

b.

joint costs at split off point method

c.

joint products value at split off method

d.

main product cost at split off method

Discuss
Answer: (a).sales value at split off method
Q30.
In a joint process of production, the product which yields low volume of sales as compared to total sales of other products, specify as

a.

Second incremental product

b.

First incremental product

c.

step down product

d.

byproduct

Discuss
Answer: (d).byproduct
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