Costing MCQs

Question 1

An unfavourable material price variance occurs because of:

Accepted Answer

Price increase in raw materials

Answer

Price decrease in raw materials

Answer

Less than anticipated normal wastage in the manufacturing process

Answer

More than anticipated normal wastage in the manufacturing process

Question 2

What is the most useful information derived from a break-even chart?

Accepted Answer

Volume or output level at which the enterprises break-even

Answer

Relationship between revenue and costs at various levels of output

Answer

Amount of sales revenue needed to cover enterprise variable costs

Answer

Amount of sales revenue needed to cover enterprise fixed costs

Question 3

When the completion stage of the contract is more than half, the profit to be credited to Profit and Loss account will be equal to . . . . . . . .

Accepted Answer

$${\frac{2}{3}^{{	ext{rd}}}}{	ext{of Notional Profit}} 	imes \frac{{{	ext{Cash received}}}}{{{	ext{Work certified}}}}$$

Answer

$${\frac{1}{3}^{{	ext{rd}}}}{	ext{of Notional Profit}} 	imes \frac{{{	ext{Cash received}}}}{{{	ext{Work certified}}}}$$

Answer

$${\frac{1}{2}^{{	ext{nd}}}}{	ext{of Notional Profit}} 	imes \frac{{{	ext{Cash received}}}}{{{	ext{Work certified}}}}$$

Answer

$${	ext{Full Notional Profit}}$$

Question 4

If factory overhead is Rs. 70,000 whose 70% is changed with the sales, then in this the amount of fixed part will be

Accepted Answer

21000

Answer

49000

Answer

70000

Answer

91000

Question 5

The costing method in which fixed factory overheads are added to inventory is

Accepted Answer

activity based costing

Answer

process costing

Answer

marginal costing

Answer

standard costing

Question 6

In ratio analysis, 'proforma analysis' implies

Accepted Answer

comparison of the firm's past and current ratios with future ratios to ascertain the relative strengths and weakness in the past and future

Answer

making a list of all the present ratios of the firm

Answer

comparison of liquidity ratios with other kind ofratio of the firm

Answer

comparison of the ratio of the firm relating to the performance of the firm

Question 7

Idle time variance is . . . . . . . .

Accepted Answer

Idle time × standard rate

Answer

Idle time × actual labour

Answer

Idle time × budgeted labour rate

Answer

Idle time × historical cost

Question 8

Cash flow statement is prepared from

Accepted Answer

All of these

Answer

Balance Sheet

Answer

Profit and Loss A/c

Answer

Additional information

Question 9

The normal cost of normal output is Rs. 3,000; value of abnormal loss is Rs. 450 and normal output is 200 units. The units of abnormal loss would be-

Accepted Answer

30 units

Answer

1,333 units

Answer

3,000 units

Answer

None of the above