Correct Answer:
D. Predetermined costs are compared with actual costs to compute variances
Standard costs act as benchmarks for control through variance analysis.
November 13, 2026 · Accounting and Finance MCQs, Cost & Management Accounting MCQs
Standard costing is a technique in which:
Related MCQs
An auditor who prepares the client's accounting records and then audits them faces which threat?
A.
Familiarity threat
B.
Intimidation threat
C.
Self-review threat
D.
No threat at all
Correct answer is:
C. Self-review threat
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If the marginal propensity to consume (MPC) is 0.8, the simple expenditure multiplier is:
A.
5
B.
1.25
C.
0.8
D.
0.2
Correct answer is:
A. 5
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A department has no opening WIP, completes 1,000 units and has 400 units in closing WIP that are 50% complete for conversion. Equivalent units for conversion cost are:
A.
1,200
B.
1,400
C.
1,000
D.
1,600
Correct answer is:
A. 1,200
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Zero-based budgeting (ZBB) requires that:
A.
Last year's budget be increased by inflation
B.
Every expenditure be justified from zero in each budget cycle
C.
Budgets be zero in the first year
D.
No deficit be allowed
Correct answer is:
B. Every expenditure be justified from zero in each budget cycle
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The internal rate of return (IRR) is the discount rate at which:
A.
NPV is maximum
B.
Payback period is one year
C.
Accounting profit is zero
D.
NPV of the project equals zero
Correct answer is:
D. NPV of the project equals zero
Do you agree with this answer?
Conversion cost is the sum of:
A.
Direct materials and direct labor
B.
Direct materials and factory overhead
C.
Direct labor and factory overhead
D.
Selling and administrative expenses
Correct answer is:
C. Direct labor and factory overhead
Do you agree with this answer?
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