Costing MCQs

Question 1

Assertion (A) Break-even point can be determined both mathematically as well as graphically. Reason (R) When it is determined on a graph paper, the graph drawn is named as 'break-even chart'.

Accepted Answer

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

Answer

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

Answer

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

Answer

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

Question 2

Which of the following statements is true about estimated costs and standard costs?

Accepted Answer

Standard costs are based on scientific analysis and engineering studies, while estimated costs are based on a historical basis

Answer

Standard cost emphasis is on 'what cost will be', while estimated cost emphasis is on 'what cost should be'

Answer

Standard costs are frequently revised compared to the estimated cost

Answer

Estimated costs are stable than standard costs

Question 3

. . . . . . . . cost is irrecoverable cost.

Accepted Answer

Sunk

Answer

Marginal

Answer

Out of pocket

Answer

None of these

Question 4

. . . . . . . . includes financial and cost accounting, tax planning and tax accounting.

Accepted Answer

Management accounting

Answer

Financial accounting

Answer

Cost accounting

Answer

None of these

Question 5

The cost formula acceptable under AS-2 for inventory valuation is

Accepted Answer

FIFO

Answer

LIFO

Answer

HIFO

Answer

Normal average

Question 6

The sum of value of work certified and uncertified appearing in the Contract Account is called . . . . . . . .

Accepted Answer

Work in Progress

Answer

Work in Process

Answer

Work Completed

Answer

Work Done

Question 7

A bus carries 25 passengers daily for 25 days and its mileage per month is 1000 kms. Its passenger miles are . . . . . . . .

Accepted Answer

25000

Answer

30000

Answer

12500

Answer

20000

Question 8

Which of the following is an investing activity?

Accepted Answer

Cash outflow to acquire fixed assets

Answer

Cash inflow from interest income

Answer

Cash inflow from dividend income

Answer

All of the above

Question 9

. . . . . . . . is used primarily for control of spare parts.

Accepted Answer

VED Analysis

Answer

ABC Analysis

Answer

JIT Inventory System

Answer

Perpetual Inventory System