Costing MCQs

Question 1

A company buys 8000 units of an item for its annual requirement. Each unit costs Rs. 10, the ordering cost per order is Rs. 30 and the carrying cost is 7.5% of the average inventory per year. The economic order quantity will be

Accepted Answer

800 units

Answer

566 units

Answer

2530 units

Answer

900 units

Question 2

Calendar Ratio =

Accepted Answer

$$\frac{{{	ext{Number of actual working days in a period}}}}{{{	ext{Number of working days in the budget period}}}} 	imes 100$$

Answer

$$\frac{{{	ext{Actual hours worked}}}}{{{	ext{Budgeted hours}}}} 	imes 100$$

Answer

$$\frac{{{	ext{Standard hours for actual production}}}}{{{	ext{Actual hours worked}}}} 	imes 100$$

Answer

$$\frac{{{	ext{Standard hours for actual production}}}}{{{	ext{Budgeted standard hours}}}} 	imes 100$$

Question 3

Inventory turnover ratio is known as:

Accepted Answer

Stock velocity

Answer

Cash ratio

Answer

Cost ratio

Answer

Profit ratio

Question 4

Life cycle costing

Accepted Answer

is sometimes used as a basis for cost planning and product pricing

Answer

includes only manufacturing costs incurred over the life of the product

Answer

includes only manufacturing cost, selling expenses and distribution expense

Answer

emphasises cost savings opportunities during the manufacturing cycle

Question 5

Contribution less fixed cost is

Accepted Answer

Profit

Answer

Sales

Answer

Price

Answer

MOS

Question 6

If the prime cost is Rs. 50,000 and factory cost will Rs. 70,000 and office overhead is 50% of factory overhead, then the production cost will be

Accepted Answer

80000

Answer

155000

Answer

105000

Answer

85000

Question 7

. . . . . . . . determines the priorities of functional budget.

Accepted Answer

Both A and B

Answer

Principal Budget Factor

Answer

Limiting Factor

Answer

None of the above

Question 8

When actual loss is less than the estimated loss, the difference between the two is considered to be . . . . . . . .

Accepted Answer

abnormal gain

Answer

abnormal loss

Answer

normal loss

Answer

income

Question 9

An item of cost that is direct for one business may be . . . . . . . . for another business.

Accepted Answer

indirect

Answer

important

Answer

direct

Answer

None of the above