ACCT 526 | COMPLETE EXAM 2026/2027 | QUESTIONS AND 100% VERIFIED ANSWERS | PASS GUARANTEE

Graduate Managerial & Cost Accounting




ACCT 526 | COMPLETE EXAM 2026/2027 | QUESTIONS AND
100% VERIFIED ANSWERS | PASS GUARANTEE




1. A cost that remains constant in total but varies per unit as
production volume changes is best classified as a:
A. Fixed cost
B. Mixed cost
C. Step cost
D. Variable cost
Correct Answer: A
2. Direct materials and direct labor combined are commonly referred
to as:
A. Conversion costs
B. Prime costs
C. Period costs
D. Sunk costs
Correct Answer: B
3. Direct labor and manufacturing overhead combined are known as:
A. Prime costs
B. Product costs
C. Conversion costs
D. Discretionary costs
Correct Answer: C
4. Costs that are expensed in the period incurred rather than attached
to inventory are called:
A. Prime costs
B. Conversion costs


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, Graduate Managerial & Cost Accounting



C. Product costs
D. Period costs
Correct Answer: D
5. A cost incurred in the past that cannot be changed by any future
decision is a:
A. Opportunity cost
B. Differential cost
C. Sunk cost
D. Relevant cost
Correct Answer: C
6. The value of the best forgone alternative when a choice is made is
the:
A. Avoidable cost
B. Sunk cost
C. Marginal cost
D. Opportunity cost
Correct Answer: D
7. A cost that differs between two decision alternatives is referred to as
a:
A. Sunk cost
B. Indirect cost
C. Relevant cost
D. Committed cost
Correct Answer: C
8. Factory rent that stays the same regardless of units produced within
the relevant range is a:
A. Fixed cost
B. Marginal cost
C. Mixed cost
D. Variable cost
Correct Answer: A
9. A cost that contains both a fixed and a variable component is called
a:

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A. Committed cost
B. Step cost
C. Mixed cost
D. Sunk cost
Correct Answer: C
10. Costs that jump to a new level once a certain activity threshold is
exceeded are called:
A. Mixed costs
B. Discretionary costs
C. Step costs
D. Marginal costs
Correct Answer: C
11. Depreciation on factory equipment used to manufacture products is
treated as:
A. A period cost
B. A selling expense
C. A product cost
D. An administrative expense
Correct Answer: C
12. Sales commissions paid to the sales force are generally classified as:
A. A product cost
B. A prime cost
C. A conversion cost
D. A period cost
Correct Answer: D
13. Indirect materials, indirect labor, and factory utilities together
make up:
A. Prime cost
B. Period cost
C. Manufacturing overhead
D. Conversion cost only
Correct Answer: C



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14. A cost that can be traced directly to a specific cost object without
allocation is a:
A. Joint cost
B. Common cost
C. Direct cost
D. Indirect cost
Correct Answer: C
15. Costs shared by multiple cost objects that must be allocated using a
base are:
A. Direct costs
B. Sunk costs
C. Indirect costs
D. Prime costs
Correct Answer: C
16. Management's fixed, discretionary spending decisions such as
advertising budgets are examples of:
A. Step costs
B. Variable costs
C. Discretionary fixed costs
D. Committed fixed costs
Correct Answer: C
17. Costs such as long-term lease payments that cannot easily be
changed in the short run are:
A. Marginal costs
B. Committed fixed costs
C. Variable costs
D. Discretionary fixed costs
Correct Answer: B
18. The cost of the next additional unit produced is the:
A. Sunk cost
B. Marginal cost
C. Fixed cost
D. Average cost


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