Quiz Questions_MCQ for Costing

8/17/2019 Quiz Questions_MCQ for Costing

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MCQ

COST SYSTEM AND COST CONTROL

UNIT-1

1. Cost accounting involves

a) Drawing up balance sheet

b) Writing-off of costsc) Ascertaining of cost

d) Annual audit of financial Statement

ANSWER: a

2. Cost accounting is an integral part of

a) inancial accounting

b)!anagement accountingc) "istorical accounting

d) #reasur$ accounting

ANSWER: B

%. &ne of the following is not an ob'ective of cost accounting

a) #o provide information to aid control b) #o ascertain costs and facilitate pricing

c) #o provide information for decision ma(ing

d) #o investigate fraud

ANSWER: d

. Cost accounting-

a) *ac(s accurac$

b) *ac(s social accountingc) +nsuitable for small concern

d) All of these

ANSWER: d

,. Cost accounting aims ata) Ascertain cost

b) Anal$ing cost

c) Controlling costd) All of these

ANSWER: d


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. Cost accountanc$ is concerned more with

a) Controlling cost b) Determining cost

c) /resenting costd) 0one of these

ANSWER: c

. An ideal costing s$stem reuires

a) Simplicit$ b) le3ibilit$ 4 Adaptabilit$

c) Comparabilit$

d) All of these

ANSWER: d

5. Cost accounting is 6

a) A branch of accounts

b) A science

c) An art

d) All of these

ANSWER: d

7. Costing method is concerned with-

a) inding out the cost per unit

b) inding out the cost of manufacture

c) inding out wor( cost

d) All of these

ANSWER: a

18. Which of the following is the costing techniue

a) !arginal costing b) &rder costingc) 9stimate costing

d) All of these

ANSWER: a

11. Cost centre refers to


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a) An output

b) A location

c) :aw materiald) 0one of these

ANSWER: b

12.Cost units are of

a) #wo t$pes

b) #hree t$pes

c) our t$pes

d) 0one of these

ANSWER: a

1%. Cost accounting involves

a) Cost ascertaining b) Ccost presentation

c) Cost control

d) All of these

ANSWER: d

1. Costing means-

a) Cost of an article

b) Ascertaining costc) Accounting for cost

d) 0one of these

ANSWER: b

1,. #he cost of an output refers to

a) An amount of e3penditure

b) !aterial cost

c) &verheadsd) 0one of these

ANSWER: a


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1. /rime cost involves

a) Direct materials b) Direct labor

c) Direct e3penses

d) All of these

ANSWER: d

1. /rime cost plus variable overheads is called

a) Cost of production

b) Cost of goods soldc) !arginal cost

d) #otal cost

ANSWER: c

15. Cost of production refers to

a) /rime cost ; actor$ overhead

b) Wor(s cost ; actor$ overhead and administrationc) /rime cost ; Wor(s overhead

d) 0one oh these

ANSWER: b

17. #otal cost consists of

a) /rime cost ; Wor(s overhead

b) Wor(ers cost ; administration overhead

c) Cost of production ; selling and distributiond) 0one of these

ANSWER: c

28. Cost refers to

a) Sales 6 cost of sales b) Sales 6 /rofit

c) /rime cost ; wor(s overhead

d) 0one of these

ANSWER: b


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21. #he labor which is related to the manufacturing of the product is classified as

a)Direct manufacturing labor costs

b)


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c) Conversion costs

d) >oth > and C

ANSWER: d

2,.#he two terms in manufacturing cost s$stems are

a)!anufacturing costs

b)/rime costs

c)Conversion costs

d) >oth > and C

ANSWER: d

2.


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25.#he inventor$ of the final goods that are not $et sold is called

a) inished goods inventor$

b)


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UNIT-II

1.


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b. Co-products

c. )o%&t *roduct$

d. !ain product18. #he method of accounting for 'oint product cost that will produce the same gross profit for

all the product is

a. :everse cost method b. &pportunit$ cost method

c. Sa!#$ ,a!u# (#t+od

d. &ther income method

11. When raw material has to pass through two or more distinct stages to be converted into

finished product= the costing method usuall$ emplo$ed is

a. Proc#$$ co$t%&' b. !arginal costingc. ob costing

d. &peration costing

12. +nit cost for each process is ascertained b$ dividing the net cost of the process with units

ofin the process.a.


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1. $-products

d.


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2. Scrap value of abnormal loss and gain are transferred to

a. >alance sheet

b. / 4 * Ac debit sidec. /4 * Ac credit side

d. Ab&or(a! !o$$ or ab&or(a! 'a%& a0c %& t+# !#d'#r

2. !a'or purpose of ascertaining euivalent production isa. To a$c#rta%& co$t o out*ut b. #o find profit or loss

c. #o control and reduce costd. 0one of these

25. alance sheet

27. oint costs of manufacturing are

a. Directl$ transferred to /4* Ac b. D%,%d#d to t+# *roduct$ *roduc#d %& t+# *roc#$$c. Shown as deferred cost in balance sheetd. 0one of these

%8. Which products are alwa$s of lower value and importance than the main product@

a. oint products

b. B4- *roduct$

c. Co-products

d. !ain product

+nit-


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a) !aterial usage variance

b) !aterial price variance

c) *abour efficienc$ Earianced) *abour mi3 variance

ANSWER: b

. Standard uantit$ 3 Actual output F GGGGGGGGGGGGGGG

a) Standard uantit$ for actual output

b) :evised standard uantit$c) Actual uantit$

d) Standard uantit$

ANSWER: a

,. !aterial cost variance F Standard cost for actual output - GGGGGGGGGGGGGGGGGG

a) Actual uantit$

b) Standard cost

c) Actual cost

d) Standard uantit$

ANSWER:c

. A primar$ purpose of using a standard cost s$stem is

a) #o ma(e things easier for managers in the production facilit$ b) #o provide a distinct measure of cost control

c) #o minimie the cost per unit of production

d) > and C are correct

ANSWER:b

. Standard cost ma$ be used for a) /roduct costing

b) /lanning

c) controllingd) All of the above

ANSWER: d

5.


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ANSWER:d

7.


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c) :s. 28=888

d) :s. 21=,88

ANSWER: c

1,. >udgeted uantit$ 18=888units= actual uantit$ 7=888 units and standard price :s. 5 per unitCalculate sales volume variance

a):s. 5888

b) :s. 888c) :s. 18=888

d) :s. 7888

ANSWER: a

1. Direct labour efficienc$ variance F

a) Standard rate 3 idle time

b) Standard rate 3 IStandard time for actual output 6 Actual time wor(ed)c) Standard rate 3 IStandard time for actual output 6 :evised Standard time)

d) Standard rate 3 I:evised standard time 6 Actual time wor(ed)

ANSWER: b

1. Direct labour revised efficienc$ variance F

a) Standard rate 3 idle time

b) Standard rate 3 IStandard time for actual output 6 Actual time wor(ed)

c) Standard rate 3 IStandard time for actual output 6 :evised Standard time)d) Standard rate 3 I:evised standard time 6 Actual time wor(ed)

ANSWER: c

15. i3ed overhead cost variance F

a) :ecovered fi3ed overhead 6 Actual fi3ed overhead b) >udgeted fi3ed overhead 6 Actual fi3ed overhead

c) :ecovered fi3ed overhead 6 >udgeted fi3ed overhead

d) Standard fi3ed overhead 6 >udgeted fi3ed overhead

ANSWER: a

17. i3ed overhead capacit$ variance Fa) :ecovered fi3ed overhead 6 Actual fi3ed overhead

b) >udgeted fi3ed overhead 6 Actual fi3ed overhead

c) :ecovered fi3ed overhead 6 >udgeted fi3ed overheadd) Standard fi3ed overhead 6 >udgeted fi3ed overhead

ANSWER: d


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28. Sales uantit$ variance F

a) Standard price I>udgeted uantit$ 6 Actual uantit$)

b) Standard price I>udgeted uantit$ 6 :evised standard uantit$)c) Actual uantit$ IStandard price 6 Actual price)

d) I>udgeted uantit$ 3 Standard price) 6 IActual uantit$ 3 Actual price)

ANSWER: b

21. Standard costing impliesa) #he use of the previous $earJs actual figures as the standard

b) #he use of predetermined levels of price and performance as the standard.

c) #he use of fi3ed budgeting.

d) #he use of ideal costs which are useful contron aids.

ANSWER: b

22. #he labour cost variance ma$ be e3pressed as which of the following@a) >udgeted labour cost- actual labour cost

b) IStd.wage rate 6 actual wage rate) 3 actual rate

c) Std.wage rate 3 output achieved 6 actual hours

d) IStd. hours produced 6 actual hours) 3 Std.wage rate.

ANSWER: c

2%. #he following cost basis should be used to value inventor$ for e3ternal financial reporting

a) Standard cost

b) "istorical cost

c) Applied cost

d) 0ormal cost

ANSWER: b

2. &verheads refer to-

a) Direct cost

b) 9stimated costc)


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b) Stand mid-wa$ between fi3ed and variable overheads

c) :emain fi3ed at all levels of output

d) 0one of these

ANSWER:b

2. #he other name of overheads absorption is-

a) Allocation

b) Chargec) Appropriation

d) Distribution

ANSWER: b

2. i3ed overheads per unit-

a) Ear$ with change in the volume of production

b) :emain fi3ed alwa$sc) 0ever var$

d) 0one of these

ANSWER: a

25. Eariable overheads represent-

a)


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. /E ration is an indicator of the

a. #he rate at which goods are sold

b. Eolume of salesc. Eolume of profit

d. Rat# o *ro%t

.


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1,. >rea( - even point is

a. Sales at which profit is high

b. Sales at which there is loss

c. Sa!#$ at "+%c+ t+#r# %$ &o *ro%t or !o$$

d. 0one of the above

1. !argin safet$ isa. Sales at which there is profit

b. Sales at which there is loss

c. Sa!#$ %& #6c#$$ o BEP


1. Angle of incidence isa. Angle between sales and fi3ed cost lines

b. Angle between sales and variable cost lines

c. A&'!# b#t"##& $a!#$ a&d tota! co$t !%$


15. >rea( even chart is a chart of

a. Sales

b. #otal costc. /rofit

d. Sa!#$ a&d tota! co$t.

18.


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2%. rea( even volume Nselling price per unitd. i3ed cost ;contribution

25. Differential cost is also (nown as

a. R#!#,a&t co$t

b.


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1.


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b) #arget cost

c) &utsource price

d) &ff shore price

ANSWER: a

. #he target price is subtracted from per unit target operating income to calculate

a) #otal current full cost b) #otal cost per unit

c) #arget operating income per unit

d) #arget cost per unit

ANSWER: d

5. Activit$ >ased Costing s$stem would probabl$ provide the greatest benefits for

organiations that use

a) ob order costing b) b) /rocess costing

c) c) "istorical costing

d) d) Standard costing

ANSWER: a

7. #he following tas(s are associated with an activit$ based costing s$stem= to select the

proper order of the preceding tas(s1. Calculation of cost application rates

2.


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c) acilit$ level cost

d) !atri3 level cost

ANSWER: a

12. &f the following organiations= Activit$ >ased Costing cannot be used b$a) !anufacturers

b) inancial services firm

c) >oo( publishersd) 0one of these

ANSWER: d

1%. ased Costing= which of the following would be considered as a fundamental

cost ob'ect@

a) +nit of product

b) A group of similar service in the service sector compan$c) A cost pool

d) the total costs of a group of activities

ANSWER: d

1. Activit$ >ased Costing aids managers in ma(ing decisions about each of the following

93cept

a) /roduct pricing and mi3 decisions

b) Cost reduction decisionsc) Design decisions

d) Discretionar$ decisions

ANSWER:d

1,. Which of the following statements best describes the application of Activit$ >ased Costing

S$stem@

a) Can onl$ be applied to manufacturing industr$ b) Can be applied to non- manufacturing but not to non-profit organiation

c) Can be applied to an$ organiation that produces products or services.

d) Cam onl$ be applied to non- profit organiations

ANSWER: c

1. #he activit$ that is performed each time a batch is product areH

a) >atch level activities

b) acilit$ level activities

c) /rocess level activitiesd) +nit level activities

ANSWER: a


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1. ased Costing s$stem which of the following would not be assigned to

/roducts@a) >atch level activities



ANSWER: b15. Which of the following would be classified as a product level activit$@

a) /lant management

b) /roduction Scheduling

c) 9ngineering changesd) !aterial handling

ANSWER: c

17. Which of the following would be classified as a batch level activit$@

a) /lant management b) /roduction Scheduling

c) 9ngineering changes

d) !aterial handling

ANSWER: d

28. An Activit$ >ased Costing S$stem is one thatHa) #races costs to activities and then to products.

b) #races costs to resources and then to activities.

c) #races activities to cost and then to resources.d) #races products to activities and them to resources.

ANSWER: a

21. Latch level

b) acilit$ levelc) /rocess level

d) +nit level

ANSWER: a

22. L93truding plastic partsM is what t$pe of activit$@ a) >atch level

b) acilit$ level

c) /rocess level

d) +nit level


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ANSWER:d

2%. A homogeneous cost pool is one thatH

a) Does not change over time

b) "as onl$ one t$pe of material assigned to itc) Can be e3plained with a single activit$ driver

d) Can be used onl$ b$ the dair$ industr$

ANSWER: c

2. Activities that are performed each time a unit is produces are GGGGG

a) >atch level activities b) /rocess level activities

c) /roduct level activities

d) +nit level activities

ANSWER: d

2,. Which of the following would be considered a non- value added activit$ a) !achining

b) /ainting

c) /ac(aging

d) Advertising

ANSWER: d

2. Which of the following would be considered a value added activit$@

a) :epair of machine

b) Storage of inventor$c) 9ngineering design

d) >oo( Oeeping

ANSWER: c

2. A cost Driver more li(el$ to be associated with a service industr$ than a manufacturing

industr$ isa) 0umber of inspections

b) 0umber of parts painted

c) 0umber f wor(ing paper pagesd) 0umber of machine hours

ANSWER: c


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25. #he listing of the activities performed within the organiation is the GGGGGGGGGGGG

a) Activit$ inventor$

b) Activit$ drivesc) Activit$ attributes

d) 0one of these

ANSWER: a

27. atch level activities



ANSWER:d

%8. Which of the following statements is incorrect regarding A>C and service industries@

a) Since service organiations do not have inventories= product costing Iand thus A>C)

will not be necessar$.

b) Activities in a service organiation tend to be more standardied than activities in amanufacturing organiation.

c) Since the output of a service organiation is consumed when produced= there will be no

batch-level activities.

d@ 0one of the above statements are correct.

ANSWER: d

A0SW9:S

+0= %)D= )D= ,)D= )C= )D= 5)D= 7)A= 18)A= 11)>= 12)A= 1%)D= 1)>= 1,)A= 1)D= 1)C=

15)>= 17)C= 28)>= 21)A= 22)>= 2%)>= 2)D= 2,)D= 2)D= 2)>= 25)A= 27)= %8)>


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+0= ,)C= )A= )D= 5)A= 7)C= 18)C= 11)A= 12)>= 1%)A= 1)>= 1,)C= 1)D= 1)A=15)D= 17)A= 28)A= 21)D= 22)A= 2%)C= 2)D= 2,)C= 2)D= 2)A= 25)>= 27)>= %8)>

+0= )D= 5)D= 7)C= 18)A= 11)A= 12)C= 1%)A= 1)C= 1,)A= 1)>= 1)C=

15)A= 17)D= 28)>= 21)>= 22)C= 2%)>= 2)C= 2,)>= 2)>= 2)A= 25)>= 27)A= %8)D

+0= 12)A= 1%)D= 1)C= 1,)C= 1)C= 1)C=

15)D= 17)>= 28)A= 21)A= 22)A= 2%)>= 2)A= 2,)A= 2)C= 2)A= 25)A= 27)C= %8)C

+0= %)D= )A= ,)>= )A= )D= 5)A= 7)D= 18)>= 11)A= 12)D= 1%)D= 1)D= 1,)C= 1)A= 1)=>

15)C= 17)D= 28)A= 21)A= 22)D= 2%)C= 2)D= 2,)D= 2)C= 2)C= 25)A= 27)D= %8)D

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Quiz Questions_MCQ for Costing