Costing MCQs

Question 1

Stores Ledger is a:

Accepted Answer

Quantitative as well as value wise records of material received, issued and balance

Answer

Quantitative record of material received, issued and balance

Answer

Value wise records of material received, issued and balance

Answer

a record of labour attendance

Question 2

Re-order level is calculated as:

Accepted Answer

Maximum consumption x Maximum re-order period

Answer

Minimum consumption x Minimum re-order period

Answer

1/2 of (Minimum + Maximum consumption)

Answer

Maximum level - Minimum level

Question 3

Economic order quantity is that quantity at which cost of holding and carrying inventory is:

Accepted Answer

Minimum and equal

Answer

Maximum and equal

Answer

It can be maximum or minimum depending upon case to case

Answer

Minimum and unequal

Question 4

ABC analysis is an inventory control technique in which:

Accepted Answer

Inventory is classified into A, B and C Category with A being the lowest quantity, highest value

Answer

Inventory levels are maintained

Answer

Inventory is classified into A, B and C category with A being the highest quantity, lowest value

Answer

Either b or c

Question 5

Which one out of the following is not an inventory valuation method?

Accepted Answer

EOQ

Answer

FIFO

Answer

LIFO

Answer

Weighted Average

Question 6

In case of rising prices (inflation), FIFO method will:

Accepted Answer

provide highest value of closing stock and profit

Answer

provide lowest value of closing stock and profit

Answer

provide highest value of closing stock but lowest value of profit

Answer

provide highest value of profit but lowest value of closing stock

Question 7

In case of rising prices (inflation), LIFO will:

Accepted Answer

provide lowest value of closing stock and profit

Answer

provide highest value of closing stock and profit

Answer

provide highest value of closing stock but lowest value of profit

Answer

provide highest value of profit but lowest value of closing stock

Question 8

"Calculate Re-order level from the following: Consumption per week: 100-200 units Delivery period: 14-28 days"

Accepted Answer

800 units

Answer

5600 units

Answer

1400 units

Answer

200 units

Question 9

"Calculate EOQ (approx) from the following details: Annual Consumption: 24000 units Ordering cost: Rs 10 per order Purchase price: Rs 100 per unit Carrying cost: 5%"

Accepted Answer

310

Answer

400

Answer

290

Answer

300