Chapter:

30+ Service Costing Solved MCQs

in Cost and Works Accounting 2

Chapters

59

68.9k

0

1.	Service costing is also called as:
A.	Operating Costing
B.	Non-Operating Costing
C.	Overhead Costing
D.	Product Costing
Answer» A. Operating Costing

discuss

2.	In service cost sheet costs are classified into :
A.	Indirect charges.
B.	Overheads.
C.	Standing charges.
D.	Fixed expenses.
Answer» C. Standing charges.

discuss

3.	In service costing division is an / a :
A.	Operation
B.	Process
C.	Contract
D.	Department
Answer» A. Operation

discuss

4.	In transport service, cost sheet depreciation cost are grouped under:
A.	Fixed Cost.
B.	Stand by cost.
C.	Semi-variable cost.
D.	Variable cost.
Answer» B. Stand by cost.

discuss

5.	An example of composite unit in transport costing is:
A.	Per passenger per km
B.	Per passenger per seat
C.	Per km per seat
D.	Per passenger per travel
Answer» A. Per passenger per km

discuss

6.	Operating cost is the cost incurred for providing:
A.	Job.
B.	Operation.
C.	Service.
D.	Product.
Answer» B. Operation.

discuss

7.	Number of passenger kilometer= Number of passengers X………………
A.	Number of kms.
B.	Number of seats.
C.	Number of buses.
D.	Number of distances.
Answer» A. Number of kms.

discuss

8.	IF the profit are 50% of operating cost, it is ……………. of invoice price.
A.	20%
B.	25%
C.	16.66667%
D.	33.33334%
Answer» D. 33.33334%

discuss

9.	Operating costing system is more suitable to :
A.	Product industries.
B.	Contraction industries.
C.	Service industries.
D.	Manufacturing industries.
Answer» C. Service industries.

discuss

10.	Per kilometer is an example of……………..cost unit used in transport undertakings.
A.	Simple
B.	Composite
C.	Dual
D.	Joint
Answer» A. Simple

discuss

11.	The production operations of most businesses can be categorized as either being:
A.	Specific orders
B.	Continuous operations
C.	Both A or B
D.	None
Answer» C. Both A or B

discuss

12.	Specific order costing methods are appropriate for organizations which produce cost units which are separately identifiable from one another.
A.	The above statement is correct
B.	The above statement is incorrect
C.	none
D.	none
Answer» A. The above statement is correct

discuss

13.	Identify the types of specific order costing.
A.	Job costing
B.	Batch costing
C.	Process costing
D.	Both A&B only
Answer» D. Both A&B only

discuss

14.	Job costing is used when a business entity carries out tasks or jobs to meet specific customer orders.
A.	The above statement is false
B.	The above statement is true
C.	none
D.	none
Answer» B. The above statement is true

discuss

15.	A job is a cost unit which consists of a single order or contract.
A.	True
B.	False
C.	none
D.	none
Answer» A. True

discuss

16.	Job costing is used when a business entity carries out tasks or jobs to meet specific customer orders.
A.	True
B.	False
C.	none
D.	none
Answer» A. True

discuss

17.	In Job costing a cost is calculated for each individual job, and this cost can be used to establish the profit or loss from doing the job.
A.	The above statement is incorrect
B.	The above statement is correct
C.	none
D.	none
Answer» B. The above statement is correct

discuss

18.	Which of the following statement is correct with regard to job costing?
A.	Job costing differs from most other types of costing system because each cost unit is a job, and no two jobs are exactly the same. Each job is costed separately.
B.	The expected cost of a job has to be estimated so that a price for the job can be quoted to a customer.
C.	A costing system should also calculate the actual cost of each job that has been carried out to work out the relative profitability of relevant jobs.
D.	All of the above are correct
Answer» D. All of the above are correct

discuss

19.	A job costing system is usually based on absorption costing principles, and in addition a cost is included for non-production overheads.
A.	False
B.	True
C.	none
D.	none
Answer» B. True

discuss

20.	Non-production overheads might be added to the cost of the job:
A.	As a percentage of the prime cost of the job
B.	As a percentage of the production cost of the job
C.	Either A or B
D.	None
Answer» C. Either A or B

discuss

21.	In job costing each job is given a unique:
A.	Identity number, or job number
B.	Account name
C.	Costing system
D.	None
Answer» C. Costing system

discuss

22.	In a costing system, a job account is similar to a work in progress account, except that it is for one job only. In a company that specialises in jobbing work, the work in progress account is the total of all the individual job accounts.
A.	The above statement is correct
B.	The above statement is incorrect
C.	none
D.	none
Answer» A. The above statement is correct

discuss

23.	Job costing is a costing method applied where work is undertaken to customers’ special requirements and each order is of comparatively short duration.
A.	True
B.	False
C.	none
D.	none
Answer» A. True

discuss

24.	Costs for each job are collected on a:
A.	Job cost sheet
B.	Job card
C.	Either A or B
D.	None
Answer» C. Either A or B

discuss

25.	A separate record must therefore be maintained to show the details of individual jobs. Such records are often known as job cost sheets or job cost cards.
A.	Correct
B.	Incorrect
C.	none
D.	none
Answer» A. Correct

discuss

26.	The items recorded on job cost sheet would include:
A.	Job number, description of job, specifications, etc.
B.	Customer details, estimated costs, selling price, estimated profit
C.	Delivery date promised, actual delivery date, delivery note number
D.	All of the above
Answer» D. All of the above

discuss

27.	The usual method of fixing prices in a jobbing concern is cost plus pricing.
A.	True
B.	False
C.	none
D.	none
Answer» A. True

discuss

28.	Cost plus pricing means that a desired profit margin is added to total costs to arrive at the selling price.
A.	False
B.	True
C.	none
D.	none
Answer» B. True

discuss

29.	A computerised job accounting system contain which of the following features:
A.	Every job will be given a job code number, which will determine how the data relating to the job is stored.
B.	A separate set of codes will be given for the type of costs that any job is likely to incur. Thus ‘direct wages’, say, will have the same code whichever job they are allocated to.
C.	In a sophisticated system, costs can be analysed both by job (for example all costs related to Job 456), but also by type (for example direct wages incurred on all jobs). It is therefore easy to perform control analysis and to make comparisons between jobs.
D.	All of the above
Answer» D. All of the above

discuss

30.	It is possible to use a job costing system to control the costs of an internal service department, such as the maintenance department and the printing department.
A.	The above statement is correct
B.	The above statement is incorrect
C.	none
D.	none
Answer» A. The above statement is correct

discuss

31.	What would be the effect of inaccurate estimation of overhead absorption rates on a Job?
A.	If the jobs are over-priced, customers will go elsewhere
B.	If the jobs are under-priced, sales revenue will fail to cover costs and/or provide an adequate return
C.	Both A&B
D.	None
Answer» C. Both A&B

discuss

32.	Batch costing is similar to job costing in that each batch of similar articles is separately identifiable.
A.	False
B.	True
C.	none
D.	none
Answer» B. True

discuss

33.	The cost per unit manufactured in a batch is the total batch cost divided by the number of units in the batch.
A.	Correct
B.	Incorrect
C.	none
D.	none
Answer» A. Correct

discuss

34.	The job costing method can therefore be applied in costing batches. The only difference is that a number of items are being costed together as a single unit, instead of a single item or service.
A.	The above statement is correct
B.	The above statement is incorrect
C.	none
D.	none
Answer» A. The above statement is correct

discuss

35.	Identify the characteristics of services: I. Intangibility: They do not have a physical substance unlike goods. They cannot be held or seen. II. Inseparability: Consumption and creation of a service cannot be separated. Services are consumed as they are created. III. Variability: Services face the problem of maintaining consistency in the standard of output. IV. Perishability: Services cannot be stored. V. Lack of ownership: Services do not result in the transfer of property in anything.
A.	All of the above
B.	(I) (II) and (V) only
C.	(I) and (V) only
D.	None
Answer» A. All of the above

discuss

30+ Service Costing Solved MCQs

Service costing is also called as:

In service cost sheet costs are classified into :

In service costing division is an / a :

In transport service, cost sheet depreciation cost are grouped under:

An example of composite unit in transport costing is:

Operating cost is the cost incurred for providing:

Number of passenger kilometer= Number of passengers X………………

IF the profit are 50% of operating cost, it is ……………. of invoice price.

Operating costing system is more suitable to :

Per kilometer is an example of……………..cost unit used in transport undertakings.

The production operations of most businesses can be categorized as either being:

Specific order costing methods are appropriate for organizations which produce cost units which are separately identifiable from one another.

Identify the types of specific order costing.

Job costing is used when a business entity carries out tasks or jobs to meet specific customer orders.

A job is a cost unit which consists of a single order or contract.

Job costing is used when a business entity carries out tasks or jobs to meet specific customer orders.

In Job costing a cost is calculated for each individual job, and this cost can be used to establish the profit or loss from doing the job.

Which of the following statement is correct with regard to job costing?

A job costing system is usually based on absorption costing principles, and in addition a cost is included for non-production overheads.

Non-production overheads might be added to the cost of the job:

In job costing each job is given a unique:

In a costing system, a job account is similar to a work in progress account, except that it is for one job only. In a company that specialises in jobbing work, the work in progress account is the total of all the individual job accounts.

Job costing is a costing method applied where work is undertaken to customers’ special requirements and each order is of comparatively short duration.

Costs for each job are collected on a:

A separate record must therefore be maintained to show the details of individual jobs. Such records are often known as job cost sheets or job cost cards.

The items recorded on job cost sheet would include:

The usual method of fixing prices in a jobbing concern is cost plus pricing.

Cost plus pricing means that a desired profit margin is added to total costs to arrive at the selling price.

A computerised job accounting system contain which of the following features:

It is possible to use a job costing system to control the costs of an internal service department, such as the maintenance department and the printing department.

What would be the effect of inaccurate estimation of overhead absorption rates on a Job?

Batch costing is similar to job costing in that each batch of similar articles is separately identifiable.

The cost per unit manufactured in a batch is the total batch cost divided by the number of units in the batch.

The job costing method can therefore be applied in costing batches. The only difference is that a number of items are being costed together as a single unit, instead of a single item or service.