Costing MCQs

Question 1

On what basis are the selling and distribution overheads absorbed?

Accepted Answer

Per unit rate

Answer

Percentage on selling cost

Answer

Percentage on factory cost

Answer

None of these

Question 2

A group items in ABC system of inventory control are

Accepted Answer

Small number of items with large rupee investment

Answer

Large number of items with large rupee investment

Answer

Large number of items with small money investment

Answer

Very high quality items

Question 3

Works cost is a total of . . . . . . . .

Accepted Answer

direct material, direct labour, direct or chargeable expenses and works expenses

Answer

indirect material, indirect labour

Answer

direct material, direct labour

Answer

indirect material, indirect labour, indirect expenses

Question 4

Fund flow refers to changes in

Accepted Answer

working capital

Answer

application

Answer

sources

Answer

both A and B

Question 5

. . . . . . . . helps in ascertaining costs beforehand.

Accepted Answer

Cost accounting

Answer

Financial accounting

Answer

Management accounting

Answer

None of these

Question 6

Assertion (A): Only the relevant costs should be taken into consideration for decision-making. Reason (R): All variable costs are relevant costs, and all fixed costs are irrelevant costs.

Accepted Answer

(A) is correct, but (R) is incorrect

Answer

Both (A) and (R) are correct

Answer

(R) is correct, but (A) is incorrect

Answer

Both (A) and (R) are incorrect

Question 7

Responsibility accounting aims to

Accepted Answer

Ensure costs become the responsibility of a specific manager

Answer

Ensure the manager is punished if things go wrong

Answer

Allocate costs to all areas of a business

Answer

Reduce the costs a department incurs

Question 8

In process costing, the abnormal loss is treated as . . . . . . . . cost and written off to profit & loss account.

Accepted Answer

period

Answer

unit

Answer

future

Answer

process

Question 9

Material price variance = Actual usage (. . . . . . . .)

Accepted Answer

Standard unit price - actual unit price

Answer

Standard price

Answer

Actual price

Answer

Standard usage