Costing MCQs

Question 1

Last in first out method is suitable in times of . . . . . . . .

Accepted Answer

rising prices

Answer

falling prices

Answer

fluctuating prices

Answer

None of these

Question 2

The internal factors affecting the wage mix include: (i) Relative worth of the job (ii) Regional wage rates (iii) Employer's ability to pay (iv) Manpower market conditions

Accepted Answer

(i) and (iii)

Answer

(i), (ii) and (iii)

Answer

(ii), (iii) and (iv)

Answer

All of the above

Question 3

If 50% of the contract is completed, then the following amount of profit is normally credited

Accepted Answer

$${	ext{Earned profit}} 	imes \frac{2}{3} 	imes \frac{{{	ext{Cash received}}}}{{{	ext{Certified value}}}}$$

Answer

$${	ext{Earned profit}} 	imes \frac{{50}}{{100}}$$

Answer

$${	ext{Earned profit}} 	imes \frac{3}{2} 	imes \frac{{{	ext{Cash received}}}}{{{	ext{Contract value}}}}$$

Answer

$${	ext{Earned profit}} 	imes \frac{2}{3} 	imes \frac{{{	ext{Cash received}}}}{{{	ext{Contract value}}}}$$

Question 4

If sales revenue at 60% capacity is Rs. 4,50,000, sales revenue at 70% capacity on a fall in selling price by 5% would be?

Accepted Answer

Rs. 4,98,750

Answer

Rs. 7,50,000

Answer

Rs. 5,25,000

Answer

Rs. 7,12,500

Question 5

Assertion (A): Debt-equity ratio indicates the long-term solvency of a company. Reason (R): It measures the ability of the company to pay-off its long-term liabilities. Select the correct answer.

Accepted Answer

Both (A) and (R) are correct, and (R) is the correct reason for (A)

Answer

Both (A) and (R) are correct, but (R) does not explain (A) correctly

Answer

(A) is correct, but (R) is incorrect

Answer

(A) is incorrect, but (R) is correct

Question 6

Where raw material is to pass certain stages, before it is converted into finished goods, the method of costing used is . . . . . . . .

Accepted Answer

Process costing

Answer

Job costing

Answer

Operating costing

Answer

Both B and C

Question 7

The total variable cost . . . . . . . . in total proportion to output.

Accepted Answer

increases

Answer

does not increase

Answer

decreases

Answer

None of these

Question 8

Under which of the cost differences international trade would not take place?

Accepted Answer

Equal

Answer

Comparative

Answer

Absolute

Answer

All of these

Question 9

The difference between fixed and variable cost has a special significance in the preparation of:

Accepted Answer

flexible budget

Answer

master budget

Answer

cash budget

Answer

sales budget