FMAA Sec D: Cost Management and Performance Metrics

Which of the following is a characteristic of fixed costs?

• Vary with production volume

• Constant in total within relevant range

• Constant per unit

• None of the above

Mixed costs are best described as:

• Entirely variable

• Entirely fixed

• Combination of fixed and variable

• Totally unrelated to volume

Under which costing method are actual costs assigned directly to products?

• Standard costing

• Normal costing

• Actual costing

• Absorption costing

Absorption costing includes which of the following in product costs?

• Direct costs only

• Variable overhead only

• Fixed overhead only

• All manufacturing costs

Activity-Based Costing is most useful when:

• Overhead is low

• Products are uniform

• Products consume overhead differently

• Direct costs dominate

Job order costing is most appropriate for:

• Oil refining

• Chemical processing

• Construction projects

• Food production

Which of the following is a fixed overhead cost?

• Direct materials

• Factory rent

• Indirect materials

• Power consumption

The predetermined overhead rate is calculated as:

• Estimated OH / Actual activity

• Actual OH / Estimated activity

• Estimated OH / Estimated activity

• Actual OH / Actual activity

Departmental overhead rates are more accurate than plant-wide rates because:

• They simplify costing

• They ignore direct costs

• They reflect departmental usage

• They average all costs

If actual overhead is $100,000 and applied overhead is $90,000, the variance is:

• $10,000 Favorable

• $10,000 Unfavorable

• $90,000 Favorable

• No variance