Costing MCQs

Question 1

"Calculate the most appropriate unit cost for a distribution division of a multinational company using the following information.
Miles travelled 636,500
Tonnes carried 2,479
Number of drivers 20
Hours worked by drivers 35,520
Tonnes miles carried 375,200
Cost incurred 562,800"

Accepted Answer

Rs 1.50

Answer

Rs .88

Answer

Rs 15.84

Answer

Rs28, 140

Question 2

Which of the following statements relating to incentive payments is correct?

Accepted Answer

In Rowan incentive plan, bonus paid to the employee is equal to the proportion of the time saved to the standard time

Answer

In Halsey incentive plan, bonus paid to a worker is equal to 50% of the time saved, divided by the rate per hour

Answer

In Taylor's differential piece rate system, a worker whose output exceeds standard output is paid 100% of piece rate, and a worker whose output falls short of the standard is paid only 50% of piece rate

Answer

The Rowan incentive plan is the base of all other incentive payment plans

Question 3

Assertion (A) Increasing the value of closing inventory increases profit. Reason (R) Increasing the value of closing inventory reduces cost of goods sold.

Accepted Answer

Both (A) and (R) are true

Answer

(A) is true, but (R) is false

Answer

(A) is false, but (R) is true

Answer

Both (A) and (R) are false

Question 4

Match the following. List-I List-II a. Marginal cost 1. . . . . . . . . = Contribution ÷ Sales b. P/V ratio 2. Contribution = Selling price - . . . . . . . . c. Profit 3. . . . . . . . . = Sales (1 - P/V ratio) d. Variable costs 4. Margin of safety = . . . . . . . . ÷ P/V ratio

Accepted Answer

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

Answer

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

Answer

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

Answer

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

Question 5

Study the following transactions
I. Raising of short-term loans
II. Goods purchased for cash
III. Payment of bonus in the form of shares
IV. Issue of shares in lieu of raw materials
The flow of funds is

Accepted Answer

II, III and IV

Answer

I, II, III and IV

Answer

III and IV

Answer

Only IV

Question 6

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 7

Which of the following statements are true about ratio analys is?
1. Ratio analysis is useful in financial analysis.
2. Ratio analysis is helpful in communication and coordination.
3. Ratio analysis is not helpful in identifying weak spots of the business.
4. Ratio analysis is helpful in financial planning and forecasting.

Accepted Answer

1, 2 and 4

Answer

1, 3 and 4

Answer

1, 2 and 3

Answer

1, 2, 3 and 4

Question 8

Given below are two statement. one labelled as Assertion (A) and other as Reason (R):
Assertion (A): Cost accounting is complementary to financial accounting.
Reason (R): The result of cost accounting are not trustworthy.
Choose the correct answer

Accepted Answer

(A) is true but (R) is false

Answer

Both (A) and (R) are true and (R) is correct explanation of (A)

Answer

Both (A) and (R) are true but (R) is not the correct explanation of (R)

Answer

(A) is false but (R) is true

Question 9

"The following information is available for the W hotel for the latest thirty day period.
Number of rooms available per night 40
Percentage occupancy achieved 65%
Room servicing cost incurred Rs 3900
The room servicing cost per occupied room-night last period, to the nearest Rs, was:"

Accepted Answer

Rs 5.00

Answer

Rs 3.25

Answer

Rs 97.50

Answer

Rs 150.00

List-I	List-II
a. Marginal cost	1. . . . . . . . . = Contribution ÷ Sales
b. P/V ratio	2. Contribution = Selling price - . . . . . . . .
c. Profit	3. . . . . . . . . = Sales (1 - P/V ratio)
d. Variable costs	4. Margin of safety = . . . . . . . . ÷ P/V ratio