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Questions and Answers
What is the main purpose of cost accounting?
Which cost is considered a variable cost in cost accounting?
What is the formula for calculating the contribution margin?
In cost accounting, which method uses a predetermined rate to allocate overhead costs to products?
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What is the formula for calculating the predetermined overhead rate in cost accounting?
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Which of the following is an example of a period cost in cost accounting?
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Study Notes
Cost Accounting Overview
- The main purpose of cost accounting is to accumulate and report costs in a way that is useful for internal management decisions.
Variable Costs
- Labour costs, direct materials, and variable overhead are examples of variable costs in cost accounting.
Contribution Margin
- The formula for calculating the contribution margin is: Contribution Margin = Sales Revenue - Variable Costs.
Overhead Allocation
- The predetermined overhead rate method uses a predetermined rate to allocate overhead costs to products in cost accounting.
Predetermined Overhead Rate
- The formula for calculating the predetermined overhead rate in cost accounting is: Predetermined Overhead Rate = Total Budgeted Overhead Cost / Total Budgeted Base.
Period Costs
- Examples of period costs in cost accounting include selling and administrative expenses, such as salaries, advertising, and insurance.
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Description
Test your knowledge of cost accounting with this quiz! Learn about the main purpose of cost accounting, identify variable costs, and calculate the contribution margin. This quiz will help you reinforce your understanding of cost accounting principles.
