Costing MCQs

Question 1

Inflated price method of valuing material issues is suitable when . . . . . . . .

Accepted Answer

materials are subject to natural wastage

Answer

prices rise

Answer

prices fall

Answer

None of these

Question 2

The main objective of Cost Accounting is to

Accepted Answer

Provide information to management for decision making

Answer

Maximise profits of the organisation

Answer

Determine the selling price of goods and services

Answer

Help in valuation of inventory of finished goods

Question 3

The process costing is not used in one of the following:

Accepted Answer

cement

Answer

chemical

Answer

textiles

Answer

oil refining

Question 4

The purchase of machinery by issuing long-term notes payable should be reported as a

Accepted Answer

non-cash investing and financing activity

Answer

cash outflow in the operating activity

Answer

cash outflow in the investing activity

Answer

cash outflow in the financing activity

Question 5

Cash flow statement is useful for financial planning.

Accepted Answer

short-term

Answer

long-term

Answer

short-term as well as long-term

Answer

None of the above

Question 6

The cost accounting method to compute basic cost of a product or service is

Accepted Answer

Unit costing

Answer

Process costing

Answer

Contract costing

Answer

Uniform costing

Question 7

Match the following. List-I (Variances) List-II (Formulae) a. MCV 1. SP (RSQ - AQ) b. MPV 2. SP (SQ - AQ) c. MUV 3. AQ consumed (SP - AP) d. MMV 4. SC - AC

Accepted Answer

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

Answer

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

Answer

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

Answer

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

Question 8

Fixed cost . . . . . . . . in the same proportion in which output changes.

Accepted Answer

does not change

Answer

changes

Answer

increases

Answer

None of these

Question 9

Fixed cost per unit . . . . . . . . with increase in output.

Accepted Answer

decreases

Answer

increases

Answer

remains constant

Answer

increases at a decreasing rate