Correct Answer:
C. A product cost included in inventory valuation
Absorption costing includes both variable and fixed manufacturing overhead in product cost.
November 13, 2026 · Accounting and Finance MCQs, Cost & Management Accounting MCQs
Under absorption costing, fixed manufacturing overhead is treated as:
Related MCQs
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?
Budgeted overhead is Rs. 240,000 and budgeted direct labor hours are 12,000. The predetermined overhead rate is:
A.
Rs. 20 per direct labor hour
B.
Rs. 2,880,000 per hour
C.
Rs. 50 per direct labor hour
D.
Rs. 0.05 per direct labor hour
Correct answer is:
A. Rs. 20 per direct labor hour
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The DuPont identity expresses ROE as:
A.
Net profit margin x total asset turnover x equity multiplier
B.
Gross margin x current ratio x debt ratio
C.
Sales / assets only
D.
EPS divided by dividend per share
Correct answer is:
A. Net profit margin x total asset turnover x equity multiplier
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A cost driver is:
A.
A factor that causes the cost of an activity to change
B.
A person who drives the delivery vehicle
C.
A fixed cost per unit
D.
A sunk cost
Correct answer is:
A. A factor that causes the cost of an activity to change
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Computer-assisted audit techniques (CAATs) are used by auditors to:
A.
Replace professional judgment entirely
B.
Prepare the client's tax returns
C.
Avoid documenting the audit
D.
Analyze large volumes of electronic data and test systems and controls
Correct answer is:
D. Analyze large volumes of electronic data and test systems and controls
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When shares are issued at a price above their par value, the excess is credited to:
A.
Retained earnings
B.
Share premium
C.
Revenue
D.
Loan account
Correct answer is:
B. Share premium
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