Cost Concepts Quiz - CBSE Class 12 Accountancy

Free practice quiz: Cost Concepts (CBSE Class 12 Accountancy). 19 multiple-choice questions with answers and explanations. Play online, no sign-up needed.

This CBSE Class 12 Accountancy practice quiz has 19 multiple-choice questions on Cost Concepts, and 19 of them come with an explanation. Try the 5 sample questions below (tap an option to check yourself), then play the full quiz online. No sign-up needed.

Sample questions

1. What are fixed costs?

   1. Costs that vary with production
   2. Costs that remain constant regardless of production
   3. Costs that decrease with production
   4. Costs that are not related to production
   Show answer

   Answer: B. Costs that remain constant regardless of production

   Fixed costs remain constant in total regardless of the volume of goods or services produced.

2. Which cost is not included in the cost of a product?

   1. Direct labor
   2. Direct materials
   3. Selling expenses
   4. Overhead costs
   Show answer

   Answer: C. Selling expenses

   Selling expenses are not included in the cost of a product, as they are incurred after the production process.

3. What does cost-volume-profit analysis focus on?

   1. Change in profit due to pricing
   2. Relationship between costs, volume, and profitability
   3. Evaluating market competition
   4. Examining fixed costs only
   Show answer

   Answer: B. Relationship between costs, volume, and profitability

   Cost-volume-profit analysis examines how changes in costs and volume affect a company's operating income and net income.

4. Which of the following is a characteristic of fixed costs?

   1. Change with output level
   2. Constant in total but fluctuates per unit
   3. Directly traceable to a product
   4. Remain constant regardless of production level
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   Answer: D. Remain constant regardless of production level

   Fixed costs do not change with the level of production but can vary on a per-unit basis as production levels change.

5. Why should fixed costs be eliminated when deciding on product line discontinuation?

   1. They are variable costs
   2. They are already incurred
   3. They forecast future sales
   4. They can be avoided in future
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   Answer: B. They are already incurred

   Fixed costs should not affect the decision to discontinue a product since they are incurred regardless of the decision and will not change.

More questions in this quiz

Answers and explanations are in the full quiz.

1. Which is an example of variable cost?
2. What is the main feature of marginal cost?
3. What do we call costs that can be directly traced to a specific product?
4. What is a sunk cost?
5. How are overhead costs classified?
6. What is contribution margin?
7. What do we call the cost of foregone alternatives?
8. How is breakeven point defined?
9. What is the effect of a decrease in sales on fixed costs?
10. Which of the following does NOT affect the decision to continue or discontinue a product?
11. Which of the following costs are relevant in decision making?
12. In cost accounting, what is the primary focus of controllable costs?
13. What is the impact of economies of scale on per-unit fixed costs?
14. How can the concept of relevant costs be utilized in pricing decisions?

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