Costing MCQs

Question 1

Variable cost increases with . . . . . . . . in output.

Accepted Answer

increase

Answer

decrease

Answer

increase or decrease

Answer

None of these

Question 2

What is the effect of increase in fixed cost?

Accepted Answer

Raises break-even point

Answer

Reduces profit volume ratio

Answer

Increases margin of safety

Answer

Reduces contribution

Question 3

The per unit expense of the . . . . . . . . portion factory overhead varies with the volume of production while . . . . . . . . portion remains the same with volume.

Accepted Answer

fixed, variable

Answer

variable, fixed

Answer

variable, semi-variable

Answer

None of these

Question 4

Which of the following is not included in estimating after tax incremental operating cash flows, for a project?

Accepted Answer

Sunk cost

Answer

Effects of inflation

Answer

Opportunity cost

Answer

None of these

Question 5

Study the following statements and mark your answers: Wage Incentive Plans have the following objects: I. Increasing worker's morale II. Lowering unit cost III. Lowering capital cost IV. Lowering depreciation charges

Accepted Answer

I and II are correct

Answer

I and IV are correct

Answer

I and III are correct

Answer

All the above are correct

Question 6

Material control aims at achieving effective . . . . . . . .

Accepted Answer

material management

Answer

quality control

Answer

accounting of material

Answer

material supply

Question 7

Cost centre and cost unit are . . . . . . . .

Accepted Answer

not the same

Answer

the same

Answer

not related

Answer

None of these

Question 8

Which of the following comes under efficiency ratios?

Accepted Answer

All of the above

Answer

Average collection period

Answer

Inventory turnover ratio

Answer

Fixed assets turnover ratio

Question 9

An unfavourable material usage arises because of:

Accepted Answer

More than anticipated normal wastage in the manufacturing process

Answer

Price increase in raw materials

Answer

Price decrease in raw materials

Answer

Less than anticipated normal wastage in the manufacturing process