Cost Accounting Interview Questions and Answers
Question - 21 : - Define Direct Materials In Cost Accounting?
Answer - 21 : -
Direct materials are the traceable matter used in manufacturing a product. The direct materials for a manufacturer of dessert products will include flour, sugar, eggs, milk, vegetable oil, spices, and other ingredients in the recipes. In manufacturing, the direct materials are listed in each product's bill of materials.
Question - 22 : - Define Indirect Manufacturing Costs?
Answer - 22 : -
Indirect manufacturing costs are a manufacturer's product costs other than direct materials and direct labor. Indirect manufacturing costs are also referred to as manufacturing overhead, factory overhead, factory burden, or burden.
Question - 23 : - Define In-direct Materials In Cost Accounting?
Answer - 23 : -
Indirect materials such as oil for greasing the baking pans, etc. will likely be viewed as part of the manufacturing supplies and will be allocated to products along with other manufacturing overhead.
Question - 24 : - Define Indirect Manufacturing Costs Under Traditional Cost Accounting?
Answer - 24 : -
Under traditional cost accounting, the indirect manufacturing costs are spread or allocated to the products manufactured based on direct labor hours, direct labor costs, or production machine hours. However, in recent decades the indirect manufacturing costs have increased significantly and are less likely to be caused by the quantity of direct labor or production machine hours.
Question - 25 : - List Some Examples Of Indirect Manufacturing Costs?
Answer - 25 : -
- Depreciation, repairs and maintenance, electricity, etc. for the production facilities and equipment.
- Salaries, wages and fringe benefits of the indirect manufacturing personnel such as production supervisors, material handlers, quality assurance, and other factory support personnel.
- Factory supplies, outside services pertaining to manufacturing, and other manufacturing related costs.
Question - 26 : - Define Coefficient Of Determination?
Answer - 26 : -
The coefficient of determination is a statistic which indicates the percentage change in the amount of the dependent variable that is "explained by" the changes in the independent variables.
Question - 27 : - Describe Sales Mix?
Answer - 27 : -
Sales mix is the relative proportion or ratio of a business's products that are sold. Sales mix is important because a company's products are likely to vary in their profitability.
Question - 28 : - List The Contribution Margin Ratio Facts?
Answer - 28 : -
- Selling price per unit
- Fixed manufacturing costs per month
- Variable manufacturing costs per unit
- Fixed SG&A expenses per month
- Variable SG&A expenses per unit
- Fixed interest expense per month
Question - 29 : - Describe The Contribution Margin Ratio?
Answer - 29 : -
The contribution margin ratio is the percentage of sales, service revenues or selling price that remains after all variable costs and variable expenses have been covered. In other words, the contribution margin ratio is the percentage of revenues that is available to cover a company's fixed costs, fixed expenses, and profit. (The contribution margin ratio is different from the gross margin ratio or gross profit percentage and cannot be computed directly from the reported amounts on the company's external income statement.)
Question - 30 : - Define Simple Linear Regression Analysis?
Answer - 30 : -
Simple linear regression analysis is a statistical tool for quantifying the relationship between just one independent variable (hence "simple") and one dependent variable based on past experience (observations). For example, simple linear regression analysis can be used to express how a company's electricity cost (the dependent variable) changes as the company's production machine hours (the independent variable) change.