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10 multiple-choice questions and 19 flashcards on Cost accounting, about 2% of the CPA BAR bank. Every one carries a written rationale.
Cost accounting is one of 5 chapters in CoStudy's CPA — Business Analysis & Reporting (BAR) [Discipline] bank, and it holds 10 of the bank's 405 multiple-choice questions — roughly 2% of the total. That proportion is not arbitrary: chapters follow the certifying body's published exam outline, and the number of questions in each is set by that domain's published weight, so the share of your practice time this chapter takes matches the share of the real exam it accounts for.
Studying by chapter is worth doing once you have a diagnostic score. A single overall percentage tells you whether you are close; it does not tell you which domain is dragging. Working a weak chapter in isolation, and re-testing it in isolation, is the fastest way to move a score that has stalled — and it is why the mock exams in CoStudy report by domain rather than as one number.
5 questions drawn from this chapter, with the full rationale shown — the controlling principle behind the right answer, and why each wrong option tempts and fails.
Margin of safety is best defined as:
Answer: A — Actual sales minus break-even sales revenue
A) Correct — cushion between actual and BE sales. B) Wrong — nonstandard construction. C) Wrong — that's contribution margin dollars. D) Wrong — that's operating income.
Under target costing, the target cost equals:
Answer: B — Market-driven target price minus desired profit margin
A) Wrong — cost-plus, not target costing. B) Correct — target cost = target price − desired profit. C) Wrong — cost-plus pricing. D) Wrong — standard costing method.
A favorable labor efficiency variance indicates that:
Answer: D — Actual hours worked were less than standard hours
A) Wrong — that's the rate variance. B) Wrong — that's a volume variance.C) Wrong — unfavorable cost overall. D) Correct — efficiency variance uses hours vs. standard.
A high inventory turnover ratio typically indicates:
Answer: C — Efficient inventory management and demand
A) Wrong — high turnover means LESS inventory sitting. B) Wrong — obsolescence lowers turnover. C) Correct — inventory sells quickly, indicates efficiency. D) Wrong — pricing power is a separate concept.
A $10,000 unfavorable direct materials PRICE variance means:
Answer: A — Actual price paid exceeded standard price
A) Correct — price variance = (AP − SP) × AQ. B) Wrong — that is the usage/quantity variance. C) Wrong — production variance is separate. D) Wrong — sales volume variance is different.
4 cards from the 19 in this chapter.
Contribution margin?
Sales - Variable costs. Per unit or total.
Direct vs indirect costs?
Direct: traceable to product (materials, labor). Indirect: shared (rent, utilities).
Break-even point?
Fixed costs / Contribution margin per unit. Where profit = 0.
First step in a multi-product break-even calculation?
Compute a weighted-average contribution margin per unit (or ratio) based on the assumed sales mix, then divide total fixed costs by that figure.
These are a sample. The full Cost accounting chapter runs 29 items with per-chapter progress tracking, on the web and in the iOS app.