Specific Order Costing MCQs

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on July 22, 2022

Complete this quick set of multiple choice questions (MCQs) to test your knowledge of the specific order costing system. You can use this quiz to help prepare for your exams, interviews, and other assessments.

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Frequently Asked Questions

What is a contract costing?

A contract costing is the allocation of the costs of performing a contract to the individual cost objectives or products that are identified with that contract. Contract costing can be used to establish the selling price of a product or service, as well as to allocate overhead costs to specific contracts.

How is contract costing done?

Contract costing is important because it allows businesses to track and understand the costs associated with each contract. This information can be used to make decisions about whether or not to bid on a contract, as well as to set prices for products and services.

How is contract costing done?

How is contract costing done?

What are the benefits of contract costing?

Some of the benefits of contract costing include a better understanding of the costs associated with specific contracts, improved decision-making about whether to bid on a contract and more accurate pricing for products and services. Contract costing can also help businesses to identify opportunities for cost reduction and improve their profitability.

Are there any drawbacks to contract to cost?

There are a few drawbacks to contract to cost. First, it can be time-consuming and labor-intensive to establish the cost drivers and allocate costs to specific contracts. Second, the accuracy of the information can be affected by the quality of the data that is used to establish the cost drivers. Finally, contract costing can be complex and difficult to understand, which can make it challenging to use the information for decision-making.

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.