QN1. Costing is a technique of
(a) Ascertainment of cost.
(b) Ascertainment of expenditure.
(c) Ascertainment of revenue.
(d) Control of cost.
(e) Both (a) and (d).
Answer: (a) Ascertainment of cost.Answer
QN2. The method of costing used in refinery is
(a) Job.
(b) Process.
(c) Standard.
(d) Contract.
Answer: (b) Process.Answer
QN3. In automobile industry , cost unit is___
(a) Quality.
(b) Number.
(c) Weight.
(d) (a) and (b).
Answer: (c) Weight.Answer
QN4. Ordering cost and carrying cost are equal at___level.
(a) Reorder.
(b) Average.
(c) EOQ.
(d) Danger.
Answer: (c) EOQ.Answer
QN5. Broadly speaking any expenditure over and above ———————-is known as overheads.
(a) Indirect costs.
(b) Fixed cost.
(c) Prime cost.
(d) Factory cost.
Answer: (a) Indirect costs.Answer
QN6. Which of the following is not a technique of costing?
(a) Marginal Costing.
(b) Standard Costing.
(c) Activity Based Costing.
(d) Incremental Costing.
Answer: (d) Incremental Costing.Answer
QN7. Which of the following statements are not correct?
(a) Variable overhead cost is a direct cost.
(b) Fixed overhead is a committed cost.
(c) Overhead cost is the aggregate of indirect material, indirect labour and other indirect expenses.
(d) Variable overhead is a discretionary cost.
Answer: (d) Variable overhead is a discretionary cost.Answer
QN8. Office telephone expense is an example of.
(a) Variable cost.
(b) Semi-variable cost.
(c) Fixed cost.
(d) Sunk cost.
Answer: (b) Semi-variable cost.Answer
QN9. ——————————-is a contract, provides that the contract price would be suitably enhanced on the happening of a specified contingency.
(a) Change to term.
(b) Repetitive.
(c) Arbitrage.
(d) Escalation.
Answer: (d) Escalation.Answer
QN10. Specific order costing includes.
(a) Job.
(b) Contract.
(c) Batch
(d) (a) and (b) of above.
(e) All of the above.
Answer: (e) All of the above.Answer
QN11. When the completion of the contract is less then ¼, the total expenditure on the contract is transferred to ————————-Account.
(a) Profit & Loss.
(b) Contra tees.
(c) Work-in-progress.
(d) None of the above.
Answer: (c) Work-in-progress.Answer
QN12. ___is the most important point to be determined in industries where batch costing is employed.
(a) Economic Order Quantity.
(b) Batch number.
(c) Economic Batch Quantity.
(d) Expiry date.
Answer: (c) Economic Batch Quantity.Answer
QN13. The method of costing applied in furniture industry is —————- costing.
(a) Process.
(b) Job.
(c) Operation.
(d) Batch.
Answer: (b) Job.Answer
QN14. The method of costing applied in steel industry is —————- costing.
(a) Process.
(b) Job.
(c) Operation.
(d) Batch.
Answer: (a) Process.Answer
QN15. When actual loss is more than estimated loss, the difference between the two is considered to be ————————–.
(a) Normal loss.
(b) Estimated loss.
(c) Abnormal loss.
(d) Provisional loss.
Answer: (c) Abnormal loss.Answer
QN16. ——————————–is spread on good items of production.
(a) Abnormal loss.
(b) Normal loss.
(c) Abnormal gain.
(d) Both (a) and (c).
(e) None of the above.
Answer: (b) Normal loss.Answer
QN17. Which of the following is an example of abnormal cost?
(a) Loss due to handling.
(b) Loss due to shrinkage.
(c) Loss due to leakage.
(d) Loss due to evaporation.
(e) Loss due to lock out.
Answer: (e) Loss due to lock out.Answer
QN18. The costs incurred up-to the point of separation is called——————— costs.
(a) Common.
(b) Normal.
(c) Abnormal.
(d) Relevant.
(e) None of the above.
Answer: (a) Common.Answer
QN19. The stage of production at which separate products are identified is known as ————————– stage.
(a) Milestone.
(b) Identification.
(c) Split off.
(d) Common.
Answer: (c) Split off.Answer
QN20. The most important criterion for distinguishing between scrap, by-product and joint product is —————————————of the products.
(a) Weight.
(b) Importance.
(c) Order of finality.
(d) Relative sales value.
Answer: (c) Order of finality.Answer
QN21. ——————————–is an example of variable cost.
(a) Rent of factory building.
(b) Direct material.
(c) Telephone charges.
(d) Depreciation.
Answer: (b) Direct material.Answer
QN22. ——————————is an example of fixed cost.
(a) Rent of factory building.
(b) Direct material.
(c) Telephone charges.
(d) Supervisor’s salary.
Answer: (a) Rent of factory building.Answer
QN23. ——————————is an example of semi-variable cost.
(a) Rent of factory building.
(b) Direct material.
(c) Telephone charges.
(d) Supervisor’s salary.
(e) Both (c) and (d).
Answer: (e) Both (c) and (d).Answer
QN24. ————————- and variable costs are same.
(a) Marginal cost.
(b) Average cost.
(c) Budgeted cost.
(d) Standard cost.
(e) Differential cost.
Answer: (a) Marginal cost.Answer
QN25. Conversion cost doesn’t include—————.
(a) Direct Material.
(b) Direct labour.
(c) Factory overhead.
(d) Both (a) and (b).
Answer: (a) Direct Material.Answer
QN26. Fixed costs are also called ……………..
(a) Standard costs.
(b) Imputed costs.
(c) Capacity costs.
(d) Sunk costs.
Answer: (c) Capacity costs.Answer
QN27. —————————–are relevant costs for decision making.
(a) Differential Costs.
(b) Incremental Fixed costs.
(c) Variable costs.
(d) Imputed costs.
(e) None of the above
(f) All of the above.
Answer: (f) All of the above.Answer
QN28. —————————–are irrelevant costs for decision making.
(a) Differential Costs.
(b) Incremental Fixed costs.
(c) Variable costs.
(d) Imputed costs.
(e) Sunk costs.
(f) All of the above.
Answer: (e) Sunk costs.Answer
QN29. The profit in marginal costing differs from absorption costing method mainly because of:
(a) Fixed Cost treatment.
(b) Variable cost treatment.
(c) Difference in stock valuation.
(d) Over or under absorption of overheads.
(e) Both (c) and (d).
Answer: (d) Over or under absorption of overheads.Answer
QN30. Muskan Ltd which makes only one product sells 10,000 units of its product making a loss of Rs 10,000. The variable cost per unit of the product is Re 8 and the fixed cost is Rs 30,000. What is the Contribution per unit?
(a) Rs 8.
(b) Rs 2.
(c) Rs 3.
(d) None of the above.
Answer: (b) Rs 2.Answer
QN31. What is the Break even point in the above case(Q30) , if the sales price, variable cost and fixed cost remain the same.
(a) 15000 units.
(b) 12000 units.
(c) 20000 units.
(d) None of the above.
Answer: (a) 15000 units.Answer
QN32. Standard costing is more widely used method in——————————–industry.
(a) Contract.
(b) Transport.
(c) Process.
(d) None of the above.
Answer: (d) None of the above.Answer
QN33. Which of the below is not one type of standard?.
(a) Current.
(b) Basic.
(c) Normal.
(d) Ideal.
Answer: (a) Current.Answer
QN34. Variance is comparison of ——————— with standards.
(a) Estimated.
(b) Calculated.
(c) Actual.
(d) Ideals.
Answer: (c) Actual.Answer
QN35. The process of comparing profits reflected by cost accounting records and financial accounting records and to know the reason of difference is known as:
(a) Audit.
(b) Verification.
(c) Examination.
(d) Reconciliation.
(e) Investigation.
Answer: (d) Reconciliation.Answer
QN36. Which of the following items could be reason/reasons of the difference between two sets of books of accounts (Financial/Cost).
(a) Stock valuation method.
(b) Absorption of overheads.
(c) Interest on debentures.
(d) Goodwill written off.
(e) All of the above.
Answer: (e) All of the above.Answer
QN37. If the opening stock was valued at Rs 4000 in financial accounts and Rs 5000 in cost accounts, what will the impact of the transaction?
(a) Cost account profit is more by Rs 1000.
(b) It gets off-set during the year, hence no impact.
(c) Financial accounts profit is more by Rs 1000.
(d) None of the above.
Answer: (c) Financial accounts profit is more by Rs 1000.Answer
QN38. The technique which does not take into account the past trends in preparing the budgets is ————————-.
(a) Incremental Budgeting.
(b) Performance Budgeting.
(c) Zero Based Budgeting.
(d) Target Budgeting.
(e) None of the above.
Answer: (c) Zero Based Budgeting.Answer
QN39. Which is the following statement is not true about budgeting?
(a) Budgeting is a forecasting technique.
(b) Budgeting is different from standard costing.
(c) It is done prior to defined period of time.
(d) Budgeting is only financial statement.
(e) It is financial / and or quantitative statement.
Answer: (d) Budgeting is only financial statement.Answer
QN40. A budget prepared for the entire firm/company is called—————-budget.
(a) Functional.
(b) Master.
(c) Flexible.
(d) Fixed.
(e) None of the above.
Answer: (b) Master.Answer
