Absorption Costing

Practice Questions

CPA Business Environment and Concepts (BEC) › Absorption Costing

Questions
6
1

Which of the following costs are included in product or inventoriable costs in an absorption costing system? Direct material, direct labor, and:

2

Many companies have made significant strides in reducing their inventories. Which of the following would be least likely to encourage managers to reduce inventory?

3

In situations when management must decide on accepting or rejecting one time only special orders, where there is sufficient idle capacity, which one of the following is not relevant to the decision?

4

A cost that bears an observable and known relationship to a quantifiable activity base is a:

5

Costs are allocated to cost objectives in many ways and for many reason. Which of the following is a purpose of cost allocation?

6

Which of the following is another name for Activity Based Costing?

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