MCQ on Activity Based Costing: Check the below Corporate and Management Accounting MCQ on Activity Based Costing with Answers Pdf free download. Corporate and Management Accounting MCQ on Activity Based Costing Questions for Corporate and Management Accounting with Answers were prepared based on the latest exam pattern. We have provided Corporate and Management Accounting MCQ on Activity Based Costing with Answers to help students understand the concept very well. Students should practice CS Executive MCQ on Activity Based Costing Questions with Answers based on the latest syllabus.

MCQ on Activity Based Costing

1. The basis of apportionment of overheads which takes into account the profitability of various departments is called ______.
(A) FIFO basis
(B) LIFO basis
(C) Ability to pay basis
(D) Activity basis

2. Which of the following is the main cost driver of customer order processing activity —
(A) Flow of the product from the assembly line
(B) Order value
(C) Number of problem suppliers
(D) Number of machine charges

3. A homogeneous cost pool is one that ______.
(A) Does not change over time
(B) Needs many activity drivers to be allocated to a cost object
(C) Can be explained with a single activity driver
(D) Has only one type of material assigned to it

4. The key area(s) of activity-based costing is/are ______.
(A) Product cost differentiation
(B) Identification of non-value-added cost
(C) Distribution between fixed and variable cost
(D) Both (A) and (B) above

5. In Traditional absorption costing system cost are first traced to:
(A) Activities
(B) Organizational unit
(C) Products
(D) Cost centers

6. Under activity-based costing, ‘material ordering’ is considered as —
(A) Unit-level activity
(B) Batch level activity
(C) Product level activity
(D) Facility level activity

7. Which of the following is not included in batch level activities ______.
(A) Material ordering cost
(B) Machine set-up cost
(C) Inspection cost
(D) Designing the product

8. In activity-based costing, an item for which cost measurement is required is called —
(A) Cost driver
(B) Cost object
(C) Allocation
(D) Cost pool

9. Cost attribution to cost units on the basis of benefit received from indirect activities, such as ordering, setting-up, assuring quality is known as:
(A) Allocation
(B) Activity-based costing
(C) Always better control
(D) Absorption

10. In activity-based costing, the allocation basis used for applying costs to services or products is called—
(A) Cost driver
(B) Cost object
(C) Allocation
(D) Applicator

11. An Activity-Based Costing, an inspection of the product is a level activity.
(A) Unit
(B) Batch
(C) Product
(D) Facility

12. Performing periodic maintenance on buildings and general use equipment is an example of:
(A) Facility level activity
(B) Unit-level activity
(C) Batch level activity
(D) Product level activity

13. The division of activities into the unit level, batch level, product level, and facility-level categories is commonly known as a:
(A) Cost object
(B) Cost application
(C) Cost hierarchy
(D) Cost estimation

14. Costs that are caused by a group of things being made or processed at a single time are referred to as:
(A) Product-level costs
(B) Cost pool
(C) Organizational-level costs
(D) Batch level costs

15. According to the Chartered Institute of Management Accountants (CIMA), cost attribution to cost units on the basis of benefits received from indirect activities e.g. ordering, setting¬up, assuring quality is known as _____.
(A) Absorption costing
(B) Marginal costing
(C) Activity-based costing
(D) Job costing

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