Inventory Costing Methods Quiz

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Inventory costing methods place primary reliance on assumptions about the flow of:

Goods

Costs (correct)

Resale prices

Values

A fixed overhead volume variance is defined as:

The difference between the budgeted value of the fixed overheads and the standard fixed overheads absorbed by actual production (correct)

The difference between the standard fixed overhead cost specified for the production achieved, and the actual fixed over head cost incurred

The difference between budgeted and actual fixed overhead expenditure

The difference between the standard fixed overhead cost specified in the original budget and the same volume of fixed overheads, but at the actual prices incurred

Which of the following does not represent the similarity between job order costing and process costing?

Tracking of direct materials, direct labour and manufacturing overhead

Methods of assigned costs (correct)

Accumulating journal entries

Flow of costs

Which of the following factors best explains a favourable direct material usage variance?

The material price variance was adverse Signup and view all the answers

Which of the following statements can best define a flexible budget?

A budget which by recognising different cost behaviour patterns is designed to change as the volume of activity changes Signup and view all the answers

Overheads are said to be over absorbed when:

Actual overheads incurred are lower than the amount absorbed Signup and view all the answers

Which of the following does not apply to market skimming

Charge a low price for when the product is first launched Signup and view all the answers

Overhead rate is calculated and then used to charge production overheads to products using:

Budgeted overhead allocation Signup and view all the answers

A products total production cost will include

Prime costs plus indirect production overhead plus any relevant tax Signup and view all the answers

In case of rising prices (inflation), FIFO method will:

Provide highest value of closing stock and profit Signup and view all the answers

Conversion cost includes cost of converting _ to _

Raw material, Finished goods Signup and view all the answers

To lower a company’s breakeven point, managers should

Take any or all of the above actions Signup and view all the answers

The production budget is produced based on:

Sales budget Signup and view all the answers

Which of the following would not be included in a cash budget?

Depreciation Signup and view all the answers

A standard cost is

The planned unit cost of a product in a period Signup and view all the answers

A price setter is

When a firm changes its price to match that of its competitor so that their prices move in unison Signup and view all the answers

Environmental management accounting is about setting daily profitability targets for managers

False Signup and view all the answers

Environmental management accounting is about organisations putting in place adequate management accounting systems

True Signup and view all the answers

Environmental management accounting is about helping organisations under the effect of their emissions on their profitability

True Signup and view all the answers

Inventory Costing Methods Quiz

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Questions and Answers

Inventory costing methods place primary reliance on assumptions about the flow of:

A fixed overhead volume variance is defined as:

Which of the following does not represent the similarity between job order costing and process costing?

Which of the following factors best explains a favourable direct material usage variance?

Which of the following statements can best define a flexible budget?

Overheads are said to be over absorbed when:

Which of the following does not apply to market skimming

Overhead rate is calculated and then used to charge production overheads to products using:

A products total production cost will include

In case of rising prices (inflation), FIFO method will:

Conversion cost includes cost of converting _ to _

To lower a company’s breakeven point, managers should

The production budget is produced based on:

Which of the following would not be included in a cash budget?

A standard cost is

A price setter is

Environmental management accounting is about setting daily profitability targets for managers

Environmental management accounting is about organisations putting in place adequate management accounting systems

Environmental management accounting is about helping organisations under the effect of their emissions on their profitability

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