50+ MCQ’s Emerging Concepts of Cost Accounting | (Free Resource)
11. Which of the following is not a characteristic or assumption of Product Life Cycle Costing?
(a) Product cost, revenue and profit patterns tend to follow predictable courses through the product life cycle
(b) Each phase of the product life cycle poses different threats and opportunities
(c) The products have infinite life period
(d) Profit per unit varies as product move through their life cycle
(e) Products require different functional emphasis in each phase
12. Most of a product’s life-cycle costs are locked in by decisions made during the business function of the value chain.
(a) Design
(b) Manufacturing
(c) Customer-service
(d) Marketing
13. Life-cycle costing is particularly important when
(a) the development period for R&D is short and inexpensive
(b) there are significant non-production costs
(c) most costs are locked in during production
(d) a low percentage of costs are incurred before any revenues are received
14. Life-cycle costing
(a) has little in common with target costing
(b) is most useful to companies that manufacture small items such as household plastics
(c) helps companies estimate revenues over a multiyear horizon
(d) gives companies more insight into total costs when manufacturing costs consume the majority of the resources
15. The comparison of a company’s practices and performance levels against those of other organizations is most commonly known as
(a) Benchmarking
(b) Continuous improvement
(c) Re-engineering
(d) Comparative analysis
16. Comparing the way a “best-in-class” company performs a specific activity (such as distribution) is called
(a) Competitive Benchmarking
(b) Internal Benchmarking
(c) Analogus Benchmarking
(d) Operational Benchmarking
17. Benchmarking allows a company to
(a) identify its strengths and weaknesses
(b) imitate those ideas that are readily transferable
(c) improve on methods in use by others
(d) all of the above
18. Which of the following is not a step in benchmarking procedures?
(a) Analyse the “worst-in-class” companies
(b) Engage in continuous improvement
(c) Analyse the “performance gap”
(d) Identify “best-in-class” companies
19. In ABC indirect costs are allocated to the products based on
(a) types of activities used by the product
(b) the extent to which the activities are used
(c) both (a) and (b)
(d) none of the above
20. Four basic steps are used in an ABC system. List the proper order of these steps given below:
(A) Identify the primary activities and estimate a total cost pool for each.
(B) Allocate the costs to the cost object using the activity cost allocation rates.
(C) Select an allocation base for each activity.
(D) Calculate an activity cost allocation rate for each activity.
(a) C, A, B, D
(b) A, C, D, B
(c) B, A, C, D
(d) A, D, C, B
| Answers: 11)The products have infinite life period 12)Design 13)there are significant non-production costs 14)helps companies estimate revenues over a multiyear horizon 15)Benchmarking 16)Competitive Benchmarking 17)all of the above 18)types of activities used by the product 19)both (a) and (b) 20)A, C, D, B |
