Costing MCQs

Question 1

Which of the following statements is true about standard labour time?

Accepted Answer

Standard labour time indicates the time in hours needed for a specific process

Answer

It is standardized on the basis of past experience

Answer

In fixing standard time, due allowance should not be given to fatigue and tool setting

Answer

The production manager does not provide any input in setting the labour time standards

Question 2

The budget that is prepared first of all is . . . . . . . .

Accepted Answer

budget for the key factor

Answer

cash budget

Answer

master budget

Answer

sales budget

Question 3

What is the ideal quick ratio?

Accepted Answer

1 : 1

Answer

2 : 1

Answer

3 : 1

Answer

4 : 1

Question 4

In electricity supply company uses . . . . . . . . as cost unit.

Accepted Answer

kilo watt hour

Answer

per household

Answer

voltage

Answer

None of these

Question 5

Which one of the following is the correct sequence of various stages of operating cycle of a manufacturing company?

Accepted Answer

Raw material conversion period, work-in-progress conversion period, Finished goods conversion period, Receivables conversion period

Answer

Raw material conversion period, work-in-progress conversion period, Creditors payment period, Receivables conversion period

Answer

Creditor payment period, Raw material conversion period, Receivables conversion period, work-in-progress conversion

Answer

Raw material conversion period, Finished goods conversion period, work-in-progress conversion period, Receivables conversion period

Question 6

From the following two statements of Assertion (A) and Reason (R). Indicate the correct option. Assertion (A) From the marginal costing approach point of view, the marginal cost is compared with the purchase price. Reason (R) If the marginal cost is less than the purchase price, it should be purchased rather than manufactured.

Accepted Answer

(A) is correct, but (R) is not correct

Answer

Both (A) and (R) are correct

Answer

(A) is not correct, but (R) is correct

Answer

Both (A) and (R) are incorrect

Question 7

Which of the following is not true of the cash budget?

Accepted Answer

Only revenue nature cash flows are shown

Answer

The shortage or excess of cash would appear in a particular period

Answer

All inflows would arise before outflows for those periods

Answer

Proceeds from issue of share capital is shown as an inflow

Question 8

Match the List-I with the items of List-II relating to human resource planning activities, and indicate the correct matching. List-I List-II a. Forecasting 1. Optimal employment b. Inventorying 2. Development activities c. Anticipating manpower problems 3. Mathematical projections of industrial trend d. Planning programmes 4. Projecting present resources into future

Accepted Answer

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

Answer

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

Answer

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

Answer

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

Question 9

At what value is the closing stock valued Or Stock is valued on

Accepted Answer

Cost price or market price, whichever is less

Answer

Cost price

Answer

Market value

Answer

Cost price or market price, whichever is higher