Costing MCQs

Question 1

Type of spoilage, which is considered as controllable and can be avoided is called

Accepted Answer

abnormal spoilage

Answer

normal spoilage

Answer

transferred-in spoilage

Answer

transferred-out spoilage

Question 2

Increase in the amount of creditors result in

Accepted Answer

increase in cash

Answer

decrease in cash

Answer

no changes in cash

Answer

None of these

Question 3

The expenses which are incurred to increase the demand of the product are known as

Accepted Answer

Selling expenses

Answer

Distribution expenses

Answer

Both A and B

Answer

Neither A nor B

Question 4

Out of pocket costs involve payment to . . . . . . . . .

Accepted Answer

outsiders

Answer

self

Answer

employees

Answer

None of the above

Question 5

Process costing is also known as . . . . . . . . costing.

Accepted Answer

continuous

Answer

batch

Answer

multiple

Answer

job

Question 6

Which of the following relate to measures of non-financial performance of a concern? 1. Customer satisfaction 2. Business process improvement 3. Economic value added 4. Learning organisation Select the correct answer

Accepted Answer

1, 2 and 4

Answer

2, 4 and 3

Answer

4, 1 and 3

Answer

All of these

Question 7

The ratio for testing immediate solvency is

Accepted Answer

liquidity ratio

Answer

current ratio

Answer

debt equity ratio

Answer

proprietary ratio

Question 8

What does a high payout ratio indicate?

Accepted Answer

The management is not ploughing back enough profit

Answer

A high Earning Per Share (EPS)

Answer

The management is ploughing back profit

Answer

The company is earning high profit

Question 9

The primary difference between a fixed budget and a variable (flexible) budget is that a fixed budget:

Accepted Answer

Is a plan for a single level of sales (or other measure of activity), while a variable budget consists of several plans, one for each of several levels of sales (or other measure of activity)

Answer

Includes only fixed costs, while a variable budget includes only variable costs

Answer

Is concerned only with future acquisitions of fixed assets, while a variable budget is concerned with expenses which vary with sales

Answer

Cannot be changed after the period begins, while a variable budget can be changed after the period begins