Costing MCQs

Question 1

Volume Variance =

Accepted Answer

All of the above

Answer

Standard rate (Actual output - budgeted output)

Answer

Actual output × standard rate - budgeted fixed overheads

Answer

Standard rate per hour (Standard hours produced - actual hours)

Question 2

Loss on incomplete contract is transferred to-

Accepted Answer

Profit and loss account

Answer

Execution work

Answer

Partly to both of them

Answer

Certified work

Question 3

When the completion stage of a contract is less than $$\frac{1}{4},$$ the total expenditure on the contract is transferred to . . . . . . . . account.

Accepted Answer

Work-in-progress

Answer

Profit and loss account

Answer

Miscellaneous account

Answer

None of these

Question 4

Match the following. List-I List-II a. Operating profit 1. Capital employed = . . . . . . . . + Preference share capital b. Liquid liabilities 2. . . . . . . . . = Gross profit - Operating expenses c. Capital employed 3. Quick assets = Quick ratio × . . . . . . . . d. Equity share capital 4. Fixed assets ratio = Fixed assets ÷ . . . . . . . .

Accepted Answer

a-2, b-3, c-4, d-1

Answer

a-3, b-4, c-1, d-2

Answer

a-4, b-3, c-2, d-1

Answer

a-2, b-1, c-4, d-3

Question 5

A variable such as activity that causes cost over a given time is

Accepted Answer

cost behaviour

Answer

cost driver

Answer

cost centre

Answer

None of these

Question 6

The basic difference between a static budget and flexible budget is that

Accepted Answer

a flexible budget can be prepared for any production level within a relevant range but a static budget is based on one specific level of production

Answer

a flexible budget considers only variable costs but a static budget considers all costs

Answer

a flexible budgets allows management latitude in meeting goals, whereas static budget is based on fixed standards

Answer

a flexible budget is applicable for a single department only but a static budget for entire production facility

Question 7

Liquid assets is determined by

Accepted Answer

Current assets - Stock - Prepaid expenses

Answer

Current assets + Stock + Prepaid expenses

Answer

Current assets + Prepaid expenses

Answer

None of the above

Question 8

Which of the following are the methods of determining cost behaviour? I. High and low point method II. Least square regression method III. Accounting or analytical approach IV. Non-parametric method Choose the correct answer from the options given below

Accepted Answer

I, II and III

Answer

I, II and IV

Answer

I, III, and IV

Answer

II, III and IV

Question 9

Which of the following would have been equal to factory overhead?

Accepted Answer

Factory cost - Prime cost

Answer

Factory cost + Prime cost

Answer

Prime cost + Direct cost

Answer

Factory cost + Direct expenses