Cost Accounting Interview Question and Answers

What is difference between cost accounting and financial accounting?

One of the basic differences cost accounting is helpfully in controlling the cost of production whereasfinancial accounting is concerned is helpfully in determining financial position of a concern .

Explain cost sheet?

Cost sheet is a statement of cost for a product for given period of time.

What is CMM?

Capability Maturity Model

What is marginal cost?

The marginal cost of an additional unit of output is the cost of the additional inputs needed to produce that output. More formally, the marginal cost is the derivative of total production costs with respect to the level of output.

 

Marginal cost and average cost can differ greatly. For example, suppose it costs $1000 to produce 100 units and $1020 to produce 101 units. The average cost per unit is $10, but the marginal cost of the 101st unit is $20

 

The Econ Model applications Perfect Competition and Monopoly emphasize the roles of average cost and marginal cost curves. The short movie Derive a Supply Curve (40 seconds) shows an excerpt from the Perfect Competition presentation that derives a supply curve from profit maximizing behavior and a marginal cost curve.

What are variable costs?

Variable costs are those that are directly proportionate with the quantity of production and or directly associated with the service.

What are fixed costs?

The costs that are fixed irrespective of production are fixed costs. EX: Rent, Depreciation

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Fix cost is those cost who not change in any time whether the production done or not it similar charge in every organization ex- salary of labor, supervisor factory rent insurance etc.

What is chargeback?

A process in the industry, where a wholesaler requests an amount that is the difference between manufacturer's prices. And contract price to the resale customer.

 

The actual chargeback occurs when the wholesaler sells the manufacturer's product at contract price that is below wholesaler acquisition cost (WAC).

 

Especially evident in pharmaceutical industry

Describe some of the methods used to allocate support costs.

Headcount or number of pc's per cost centre.

What is BEP?

BEP- Break Event Point: It indicates no Loss and no Profit

The level of activity at which, total revenues equal total costs.

A point at which there is no profit and no loss.