McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Cost Accounting .
| 1. |
Carriage outward is a part of |
| A. | Office and Administrative overhead |
| B. | Factory overhead |
| C. | Selling and Distribution overhead |
| D. | Prime Cost |
| Answer» C. Selling and Distribution overhead | |
| 2. |
Notional cost is also known as |
| A. | Variable cost |
| B. | Imputed cost |
| C. | Opportunity cost |
| D. | Out of Pocket cost |
| Answer» B. Imputed cost | |
| 3. |
Which one of the following is not a cost unit? |
| A. | Kilo watt hour |
| B. | Credit division |
| C. | Patient day |
| D. | Tonne-mile |
| Answer» B. Credit division | |
| 4. |
Cost reduction - |
| A. | Long term phenomena |
| B. | It challenges the standards. |
| C. | It is carried out without compromising the quality. |
| D. | All of the above |
| Answer» D. All of the above | |
| 5. |
Statement showing break up of costs is known as |
| A. | Cost sheet |
| B. | Tender |
| C. | Production account |
| D. | Statement of profit |
| Answer» A. Cost sheet | |
| 6. |
Prime cost may be correctly termed as 24 |
| A. | the total of all cost items which can be directly charged to product units. |
| B. | the sums of all direct materials and labour cost excluding all other cost. |
| C. | the total costs incurred in producing a finished unit. |
| D. | the sum of the large cost in product cost. |
| Answer» A. the total of all cost items which can be directly charged to product units. | |
| 7. |
Which one is included in financial accounts but not in cost accounts? |
| A. | Royalty |
| B. | Dividend paid |
| C. | Excise duty |
| D. | Carriage and freight |
| Answer» B. Dividend paid | |
| 8. |
Which of the following term is excluded from the cost accounts? |
| A. | Income tax |
| B. | Interest on debenture |
| C. | Cash discount |
| D. | All of the above |
| Answer» D. All of the above | |
| 9. |
Variable costs are fixed |
| A. | depend upon the entity |
| B. | for a period |
| C. | per unit |
| D. | for a particular process of production |
| Answer» C. per unit | |
| 10. |
Costs are classified into fixed costs, variable costs and semi-variable costs, it is known as |
| A. | Behavioural classification |
| B. | Classification according to controllability |
| C. | Functional classification |
| D. | Element wise classification |
| Answer» A. Behavioural classification | |
| 11. |
The main purpose of cost accounting is to |
| A. | maximize profit |
| B. | inventory valuation |
| C. | provide information for decision making. |
| D. | fixation of selling price |
| Answer» C. provide information for decision making. | |
| 12. |
Process cost is very much applicable in |
| A. | Construction industry |
| B. | Pharmaceutical industry |
| C. | Airline company |
| D. | Printing industry |
| Answer» B. Pharmaceutical industry | |
| 13. |
All indirect costs are termed as |
| A. | Prime cost |
| B. | Factory cost |
| C. | Conversion cost |
| D. | Overheads |
| Answer» D. Overheads | |
| 14. |
CAS-21 is related to |
| A. | Cost Accounting Standard on Overburden Removal Cost. |
| B. | Cost Accounting Standard on Interest and Financing Charges |
| C. | Cost Accounting Standard on Joint Cost |
| D. | Cost Accounting Standard on Quality Control |
| Answer» D. Cost Accounting Standard on Quality Control | |
| 15. |
On the basis of “Relationship with accounting period” costs are classified as |
| A. | Historical Costs and Pre-determined Costs. |
| B. | Capital Costs and Commercial Costs. |
| C. | Capital Costs and Revenue Costs. |
| D. | Product Costs and Period Costs |
| Answer» C. Capital Costs and Revenue Costs. | |
| 16. |
Cost of staff services is an example of |
| A. | Committed Costs |
| B. | Policy and Managed Costs |
| C. | Discretionary Costs |
| D. | Step Costs |
| Answer» B. Policy and Managed Costs | |
| 17. |
Which of the following is not a method of costing? |
| A. | Process Costing |
| B. | Batch Costing |
| C. | Direct Costing |
| D. | Operating Costing |
| Answer» C. Direct Costing | |
| 18. |
The written down value of the abandoned plant less its salvage value is |
| A. | Imputed cost |
| B. | Sunk cost |
| C. | Avoidable Cost |
| D. | Opportunity cost |
| Answer» B. Sunk cost | |
| 19. |
The costs are differentiated between fixed and variable costs under |
| A. | Marginal Costing |
| B. | Direct Costing |
| C. | Standard Costing |
| D. | Absorption Costing |
| Answer» A. Marginal Costing | |
| 20. |
Which of the following is a suitable cost unit for the BPO Services/Call Centers? |
| A. | Cost per item |
| B. | Cost per hour |
| C. | Cost per account handled |
| D. | Cost per minute |
| Answer» C. Cost per account handled | |
| 21. |
Interest on own capital is |
| A. | Cash Cost |
| B. | Notional Cost |
| C. | Part of Prime Cost |
| D. | Semi-Variable Cost |
| Answer» B. Notional Cost | |
| 22. |
Advertisement costs are termed as |
| A. | Direct Expenses |
| B. | Cost of Production |
| C. | Selling Overhead |
| D. | Distribution Overhead |
| Answer» C. Selling Overhead | |
| 23. |
Direct Wages 2,05,000 and Factory Cost 5,60,000. If the ratio of direct wages and factory overhead is 5 : 3 then Direct Material Cost will be |
| A. | 2,32,000 |
| B. | 3,50,000 |
| C. | 3,41,667 |
| D. | 2,24,000 |
| Answer» A. 2,32,000 | |
| 24. |
A technique and process of ascertaining costs is known as |
| A. | Cost |
| B. | Costing |
| C. | Cost Accounting |
| D. | Cost Accountancy |
| Answer» B. Costing | |
| 25. |
The branch of the accounting dealing with the classification, recording, allocation, summarizing and reporting of current and prospective costs, is known as |
| A. | Financial Accounting |
| B. | Management Accounting 26 |
| C. | Cost Accounting |
| D. | Cost Accountancy |
| Answer» C. Cost Accounting | |
| 26. |
Which of the following is not a function of Cost Accountancy? |
| A. | Cost Control |
| B. | Cost Ascertainment |
| C. | Cost Analysis |
| D. | Cost Accounting |
| Answer» C. Cost Analysis | |
| 27. |
Which of the following ‘CAS’ is related to “Pollution Cost”? |
| A. | CAS - 11 |
| B. | CAS - 13 |
| C. | CAS - 14 |
| D. | CAS – 17 |
| Answer» C. CAS - 14 | |
| 28. |
Costs are classified between direct and indirect costs according to method of classification by |
| A. | Nature or Element |
| B. | Functions |
| C. | Degree of traceability to product |
| D. | Change in Activity or Volume |
| Answer» C. Degree of traceability to product | |
| 29. |
Depreciation on building is an example of |
| A. | Committed Costs |
| B. | Policy and Managed Costs |
| C. | Discretionary Costs |
| D. | Step Costs |
| Answer» A. Committed Costs | |
| 30. |
When the volume of output is increased then the per unit fixed cost will be |
| A. | increase in the proportion of output. |
| B. | decrease in the reverse proportion of output |
| C. | changed but not in proportion of output. |
| D. | unchanged |
| Answer» B. decrease in the reverse proportion of output | |
| 31. |
Which of the following costing method is suitable for Toy Making Industry? |
| A. | Contract Costing |
| B. | Process Costing |
| C. | Job Costing |
| D. | Batch Costing |
| Answer» B. Process Costing | |
| 32. |
Which of the following is not a technique of costing? |
| A. | Managerial Costing |
| B. | Process Costing |
| C. | Standard Costing |
| D. | Budgetary Costing |
| Answer» D. Budgetary Costing | |
| 33. |
Excise duty is an example of |
| A. | Chargeable expense |
| B. | Factory overhead |
| C. | Administrative overhead |
| D. | Non-cost item |
| Answer» A. Chargeable expense | |
| 34. |
Over which the following costs, management is likely to have least control? |
| A. | Wages cost |
| B. | Building Insurance cost |
| C. | Machinery Breakdown cost |
| D. | Advertisement cost |
| Answer» C. Machinery Breakdown cost | |
| 35. |
The works cost plus administration expenses represents 27 |
| A. | Total cost |
| B. | Cost of Production |
| C. | Cost of sales |
| D. | Factory cost |
| Answer» B. Cost of Production | |
| 36. |
Opportunity cost is the best example of |
| A. | Sunk cost |
| B. | Standard cost |
| C. | Relevant cost |
| D. | Irrelevant cost |
| Answer» C. Relevant cost | |
| 37. |
Which method of costing is used for determination of costs for printing industry? |
| A. | Process costing |
| B. | Operating costing |
| C. | Batch costing |
| D. | Job costing |
| Answer» D. Job costing | |
| 38. |
Prime cost plus factory overheads is known as |
| A. | Marginal Costing |
| B. | Conversion Cost |
| C. | Commercial Cost |
| D. | Factory Cost |
| Answer» D. Factory Cost | |
| 39. |
From the following information, find out purchases when raw material consumed is 26,500; Closing stock 4,500 and opening stock 3,000. |
| A. | 26,500 |
| B. | 25,000 |
| C. | 28,000 |
| D. | 34,000 |
| Answer» C. 28,000 | |
| 40. |
Bad debts are included as |
| A. | Direct expenses |
| B. | Distribution overhead |
| C. | Cost of production |
| D. | Selling overhead |
| Answer» D. Selling overhead | |
| 41. |
When re-ordering level is 200 units, minimum usage is 20 units, minimum lead time is 5 days, maximum stock is 400 units then re-ordering quantity will be: |
| A. | 400 units |
| B. | 200 units |
| C. | 300 units |
| D. | 100 units |
| Answer» C. 300 units | |
| 42. |
In the situation of increasing prices, the valuation of closing stock is more under: |
| A. | Simple average |
| B. | Weighted average |
| C. | FIFO |
| D. | LIFO |
| Answer» C. FIFO | |
| 43. |
Payment of Royalties is |
| A. | Direct Expenses |
| B. | Administrative Cost |
| C. | Charged to Profit & Loss A/c |
| D. | Factory Overheads |
| Answer» A. Direct Expenses | |
| 44. |
Which one of the following statement is true? |
| A. | Abnormal cost is not controllable |
| B. | Financial Expenses are included in Cost Sheet |
| C. | All overheads changes with the change in volume and in the same proportion. 28 |
| D. | Primary packing is an item of prime cost. |
| Answer» D. Primary packing is an item of prime cost. | |
| 45. |
Costing is a technique of |
| A. | Recording of Cost transactions |
| B. | Ascertaining Cost |
| C. | Preparation of final accounts |
| D. | Decision making |
| Answer» B. Ascertaining Cost | |
| 46. |
Which of following is appropriate Cost Unit for timber industry? |
| A. | Per tonne |
| B. | Per article |
| C. | Per Kg. |
| D. | Per foot |
| Answer» D. Per foot | |
| 47. |
Which of the following is a Cost Control Technique? |
| A. | Marginal Costing |
| B. | Uniform Costing |
| C. | Standard Costing |
| D. | Absorption Costing |
| Answer» C. Standard Costing | |
| 48. |
Cost of free samples and gifts are included in |
| A. | Prime Cost |
| B. | Factory Overhead |
| C. | Office and Administrative Overheads |
| D. | Selling & Distribution Overheads |
| Answer» D. Selling & Distribution Overheads | |
| 49. |
In behavioural analysis, costs are divided into |
| A. | Production and Non-Production costs |
| B. | Controllable and Non-Controllable costs |
| C. | Direct and indirect costs |
| D. | Fixed and Variable costs |
| Answer» D. Fixed and Variable costs | |
| 50. |
Which of the following is a part of both Prime cost and Conversion cost? |
| A. | Direct Material |
| B. | Indirect Labour |
| C. | Direct Labour |
| D. | All of the above |
| Answer» C. Direct Labour | |
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