CostAccountingSolvedMCQs|CostAccountingMultipleChoiceQuestionsandAnswersdoc

1.Themainobjectiveofcostaccountingistoprovideinformationtothemanagementfor

(a)planring

(c)policy-making

(b)decision-making

(d)Noneofthese

Ans.b

2.Totalcostsofdirectmaterial,Jabourandexpensesareincludedin

(a)distributioncost

(c)sellingcost

(b)primecost

(d)developmentcost

Ans.b

3.Theascertainmentofcostsaftertheyhadbeenincurredisknownas

(a)differentialcosting

(c)historicalcosting

(b)replacementcosting

(d)predeterminedcosting

Ans.c

4.……..isatechniqueofcostcontrol.

(a)Marginalconting

(c)Jobcostingisatechniqueofcostcontrol.

(b)Standardcosting

(d)Contractcostinig

Ans.b

5.Acost,inwhichpaymentismadetoafactorofproductionisreferredtoas

(a)opportunitycost

(c)absolutecost

(b)imputedcost

(d)outofpocketcost

Ans.d

6.Costcentrecomprisingofapersonoragroupofpersonsisreferredtoas

(a)operationoostcentre

(c)servicecostcentre

(b)functionalcostceritre

(d)personalcostcentre

Ans.d

7.Acyclemanufacturingcompanywillgenerallyusethe…..methodofcosting.

(a)jobcosting

(b)multiplecosting

(c)Unitcosting

(d)processcosting

Ans.b

8.Theprocessofdistributinganitemofcostoverseveralcostcentresisknownas

(a)costabsorption

(c)costallocation

(b)costapportionment

(d)Noneofthese

Ans.b

9.Interestoncapital,paymentforwhichisnotmade,isanexampleof

(a)Imputedcost

(c)replacementcost

(b)sunkcost

(d)opportunitycost

Ans.a

11.……methodofcostingwillbesuitableforoilrefineries.

(a)Operationcostin

(c)Jobcosting

(b)Processcosting

(d)Batchcosting

Ans.b

11.Costunitapplicabletohotelsprovidinglodgingfacility,willbe

(a)perroom,perday

(c)perpassenger,perday

(b)perbed,perday

(d)Noneofthese

Ans.a

12.Overheadcostsofoperatingamachinemaybeabsorbedbyusing

(a)ratepersecondofoperatingthemachine

(b)rateperminuteofoperatingthemachine

(C)rateperhourofoperatingthemachine

(d)Either‘a’or‘b

Ans.c

13.Acostcentrewhichisformedtorenderservicestoproductioncentresisknownas

(a)servicecostcentre

(c)productioncostcentre

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(b)processcostcentre

(d)functionalcostcentre

Ans.a

14.Bincardisalsoknownas

(a)storesledger

(c)materialbill

(b)stockcard

(d)Noneofthese

Ans.b

15.In……….method,thepriceoftheoldestavailablestockistakenastheissueprice.

(a)weightedaverage

(c)FIFO

(b)LIFO

(d)HIFO

Ans.c

16.Thequantityofmaterialwhichisorderedatthetimeofplacinganorderisreferredtoas

(a)ABCquantity

(c)maximumquantity

(b)minimumquantity

(d)economicorderquantity

Ans.d

17.……..areincurredeverytimeanorderisplacedandincludecostofplacinganorder,transportationcost,

costofinspectinggoods,etc.

(a)Storagecosts

(c)Either‘a’or‘b’

(b)Orderingcosts

(d)Noneofthese

Ans.b

18...areincurredonthemaintenanceofmaterialinstoresandcompriseofcostsrelatedtohandling,

obsolescence,pilferage,etc.

(a)Carryingcosts

(c)Either‘a’or‘b’

(b)Orderingcosts

(d)Noneofthese

Ans.a

19.Incaseofinter-departmentalissueofmaterial,….isissued.

(a)creditnote

(c)materialtransfernote

(b)debitnote

(d)storesrequisitionnote

Ans.d

20.ABCanalysisisatechniqueof

(a)costcontrol

(b)budgetarycontrol

(d)Noneofthese

(c)inventorycontrol

Ans.c

21.Amanufactureruses7,500unitsoffamaterial‘Z’peryear.Thematerialcostisrs.15perunitand

carryingcostis40%perannumofaverageinventorycost.Thecostofplacingorderisrs.36.CalculateEOQ

andnumberofordersplacedperannum.

(a)250units,30times

(c)500units,15times

(b)300units,25times

(d)150units,50times

Ans.b

22.TheminimumstocklevelandaveragestocklevelofrawmaterialAlpha’are4,000and9,000units

respectively.There-orderquantitywillbe

(a)10,000units

(c)14,000units

(b)12,000units

(d)16,000units

Ans.a

24.TheEOQwillbe

(b)800units

(d)900units

(a)1.000units

(c)600units

Ans.c

25.Numberofordersplacedeachyearwillbe

(a)100orders

(c)80orders

(b)120orders

(d)75orders

Ans.a

27.TotalorderingcostsforEOQwillbe

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(b)rs.11,000

(d)rs.9,000

(a)rs.12,000

(c)rs.10,000

Ans.d

28.TotalcarryingcostsforEOQwillbe

(a)rs.9,000

(c)rs.18,000

(b)rs.10,000

(d)rs.20,000

Ans.a

29.Totalofcarryingandstoragecostswillbe

(a)rs.20,000

(c)rs.24,000

(b)rs.18,000

(d)rs.30,000a

Ans.b

31.Methodtomeasurelabourturnoveris

(a)separationmethod

(b)repiacementmethod

(c)fluxmethod

(d)Alloftheabove

Ans.d

32.ThepercentageofbonusofferedunderRowanplanis

(a)50%

(b)40%

(c)331/3%

(d)fluctuating

Ans.d

33.Thecostofabnormalidletimeistransferredto

(a)costingmanufacturingA/c

(b)costingprofitandlossA/c

(c)costingtradingA/c

(d)Noneoftheabove

Ans.b

34.Theunavoidablecausewhichcompelworkerstoleavetheirjobis

(a)seasonalnatureofbusinessi

(b)lackofproperworkingconditions

(C)lackofdevelopmentalopportunities

(d)unhealthyrelationwithmanagement

Ans.a

35.Timeandmotionstudyisconductedwithanaimtoclassifythelabourmovementsinto

(a)fixedandvariable

(b)directandindirect

(c)avoidableandunavoidable

(d)Noneoftheabove

Ans.c

36.Aworkerisallowed50hourstocompletehisjobwithaguaranteedwagerateofrs.12perhour.Underthe

Rowanplan,hiseffectivewageearningsarers.15perhour.WhatwillbehisearningsunderHalseyplan?

(a)rs.750

(b)rs.525

(c)rs.600

(d)rs.550

36.Aworkerisallowed50hourstocompletehisjobwithaguaranteedwagerateofrs.12perhour.Underthe

Rowanplan,hiseffectivewageearningsarers.15perhour.WhatwillbehisearningsunderHalseyplan?

(a)rs.750

(b)rs.525

(c)rs.600

(d)rs.550

DirectionsQ.No37to39arebasedontheinformationgivenbelow.

Thelabourturnoverratesofamanufacturingorganisationforthehalf-yearlyended30thJune,2015are10%

5%and3%underfluxmethod,replacementmethndandseparationmethodrespectively.Thenumberof

workersreplacedduringthequarteris1,500.

37.Theaveragenumberofworkersintheorganisatio

(a)30,000

(c)75,000

(b)40.000

(d)50,000

Ans.a

38.Thenumberofworkerswholefttheirjobdurgperiodis

(a)1,500

(c)1,000

(b)900

(d)Noneofthese

Ans.b

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39.Thenumberofworkerswholeftincludingreplacemens.

(a)800

(b)1,000

(c)5.000

(d)3.000

DirectionsQ.No.40and41arebasedontheinformatngitbelow.Aworkertakes7hourstocompleteajob

underaschemeofpaymentbyresults.Standardtimeallowedforthejobis10hours.Wagerateisrs.50per

hour.

40.ThewagesoftheworkersunderHalseyplanwillbe

(a)rs.400

(c)rs.350

(b)rs.425

(d)rs.500

Ans.b

41.ThewagesoftheworkerunderRowanplanwillbe

(a)rs.375

(c)rs.350

(b)rs.425

(d)rs.455

Ans.d

CostandManagementAccountingMCQswithAnswerspdf

42.Whichofthefollowingitem(s)is/areincludedinoverheads?

(a)Depreciationonofficefurniture

(b)Rentofofficebuilding

(c)Electricitychargesofoffice

(d)Alloftheabove

Ans.d

43.Overheadswhichvaryindirectproportionwithchangeinthelevelofactivityarereferredtoas

(a)controllableoverheads

(c)fixedoverheads

(b)uncontrollableoverheads

(d)variableoverheads

Ans.d

44.Allocationandapportionofcostsoverproductionandservicedepartmentsaredoneinthe

(a)primarydistributiontable

(b)secondarydistributiontable

(c)preliminarydistributiontable

(d)Noneoftheabove

Ans.a

45.Administrativeoverheadsinclude

(a)auditandlegalfees

(b)afficerent,ratesandtaxes

(C)salarnesofadministrativestaff

(d)Alloftheabove

Ans.d

46.Salarypaidtosupervisorisanexampleof

(a)sellingoverhead

(b)productionoverhead

(c)manufacturingoverhead

(d)administrativeoverhead

Ans.c

47.Acommonabsorptionrateusedthroughoutafactoryforalljobs,irrespectiveofthedepartmentinwhich

theywereproduced,iscalled

(a)machinehourrate

(b)blanketabsorptionrate

(c)overallabsorptionrate

(d)Noneofthese

Ans.b

48.Mostsuitablebasisforapportioningtheinsurancechargesformachineswouldbe

(a)valueofmachines

(b)floorareaoccupiedbymachines

(c)numberofmachines

(d)numberofworkersworkingonamachine

Ans.a

49.Calculatethecostofpowerperhour,ifpowerconsumptionofmachineduringoperationis20unitsand

rateofpowerper100unitisrs.600.

(a)rs.120

(b)rs.30

(c)rs.100

(d)rs.600

Ans.a

50.Whenactualoverheadsaremorethantheabsorbedoverheads,itisknownas

(a)under-absorptionofoverheads

(b)over-absorptionofoverheads

(c)Either‘a’or‘b’

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(d)Noneoftheabove

Ans.a

51.“Under/over-absorptionofoverheadsoccursonlywhenapredeterminedrateofoverheadabsorptionis

used”.Thegivenstatementis

(a)true

(c)partlytrue

(b)false

(d)partlyfalse

Ans.a

52.Costofdirectmaterialsconsumedisequalto

(a)Primecost–Directlabourcost–Directexpenses

(b)Primecost–Directlabourcost+Directexpenses

(c)Primecost+DirectlabourcostDirectexpenses

(d)Primecost+Directlabourcost+Directexpenses

Ans.a

53.Calculatethevalueofclosingstockfromthefollowinginformation.Openingstockoffinishedgoods

(1,000units):rs.5,000costofproduction(20,000units)isrs.120,000Closingstockof3,000unitsis

(a)rs.15,000

(b)rs.17,857

(c)rs.18,000

(d)Noneoftheabove

Ans.c

54.Incontractcosting,alldirectcostsaredebitedto

(a)profitandlossaccount

(c)contractaccount

(b)tradingaccount

(d)Noneofthese

Ans.c

55.Notionalprofitcanbecalculatedwiththehelpofwhichformula?

(a)Notionalprofit=(Valueofworkcertified+Costofworkuncertified)+Costofworkdonetilldate

(b)Notionalprofit=(Valueofworkcertified+Costofworkuncertified)–Costofworkdonetilldate

(c)Notionalprofit=(ValueofworkcertifiedCostofworkuncertified)Costofworkdonetilldate

(d)Noneoftheabove

Ans.b

56..clauseisinsertedinthecontracttoprotectthecontractorfromanunexpectedriseinthecostof

material.

(a)Reserve

(c)Escalation

(b)Inflationary

(d)De-escalation

Ans.c

57.Ifworkcertifiedis.,thennothingistransferredtocostingprofitandlossaccount.

(a)lessthan30%

(c)lessthan50%

(b)lessthan45%

(d)lessthan25%

Ans.d

58.Whenthecashratiois80%,thentheretentionmoneyisequalto

(a)10%

(b)15%

(c)20%

(d)Noneofthese

Ans.c

59.Thecontractpriceisrs.7,50,000.75%oftheworkiscertified.Thecontactedhasgivenpaymentfor80%.

Findtheamountreceivedbythecontractor.

(a)rs.5,62,500

(b)rs.6,00,000

(c)rs.4,50,000

(d)Noneofthese

Ans.b

60.………costingissuitableforindustriesengagedinmassproduction.

(a)Job

(c)Process

(b)Contract

(d)Batch

Ans.d

61.…..methodofcostingisusedinindustrieswheregoodsmovefromoneprocesstoanotheruntiltheirfinal

completion.

(a)Job

(c)Contract

(b)Process

(d)Batch

Ans.b

62.Inprocesscosting,costperunitofproductionincreasesdueto

(a)normalloss

5
(b)normalgain

(d)abnormalgain

(c)abnormalloss

Ans.a

63.Therawmateriallostinprocessing,havingnorecoveryvalueisknownas

(a)scrap

(b)waste

(c)spoilage

(d)Noneofthese

Ans.b

64.Abnormallossesare……totheprocessaccountand..….totheabnormallossaccount.

(a)credited,debited

(c)credited,credited

(b)debited,credited

(d)debited,debited

Ans.a

65.2,500kgsofmaterial‘X’areintroducedinprocess‘A’.Expectednormallossis2%.Actualoutputfromthe

processis2,400kgs.Theamountofabnormallosswillbe

(a)55kgs

(c)100kgs

(b)50kgs

(d)noabnormalloss

Ans.b

66.Aproductwhicharisesincidentallyintheproductionofthemainproductandwhichhasarelativelysmall

salesvalueascomparedwithmainproductisknownas

(b)joint-products

(a)scrap

(c)byproducts

(d)wastage

Ans.c

67.____________arethecostswhicharecommontotheprocessingofjointproductsorbyproductsuptothe

pointofseparation.

(a)Jointcosts

(b)Commoncosts

(c)Pre-separationcosts

(d)Noneoftheabove

Ans.b

68.Under…..accounting,separateledgersforfinancialandcostaccountingaremaintained.

(a)financialbook-keeping

(b)integrated

(c)non-integrated

(d)Noneoftheabove

Ans.c

69.Maintenanceof..…accountsavoidsduplicationofeffortsandreconciliationofcostandfinancial

accountsisnotrequired.

(a)non-integrated

(c)cost

(b)integrated

(d)financial

Ans.b

70.Integratedaccountsmerge……inonesetofaccounts.

(a)costandfinancialaccounts

(b)costandmanagementaccounts

(c)managementandfinancialaccounts

(d)Noneoftheabove

Ans.a