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Costing MCQ Questions and Solutions with Explanations | Commerce

Costing MCQ Questions and answers with easy and logical explanations. Commerce provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. Costing MCQ is important for exams like B.COM, M.COM, BBA, BBM, CA, CS, CMA, CPA, CFA, UPSC, NET, Banking and other commerce department exam. Page-2 section-4

Each section contains 100 MCQs on Costing .
11
If direct material cost is $85000 and direct manufacturing labour is $25000, then prime cost would be
Discuss
Answer & Solution
Answer: Option D
Solution:
Prime cost = Direct material cost + Manufacturing labour
= $85000 + $25000 = $110,000
12
In costing of project, wages paid to workers for unproductive work at time of material shortage is termed as
Discuss
Answer & Solution
Answer: Option C
Solution:
In costing of project, wages paid to workers for unproductive work at time of material shortage is termed as idle time wages. The labour cost of normal idle time may be treated as an item of factory expenses and recovered as an indirect charge in case of indirect workers.
13
Conversion cost is subtracted from direct manufacturing labour cost is to calculate the
Discuss
Answer & Solution
Answer: Option D
Solution:
Conversion cost is subtracted from direct manufacturing labour cost is to calculate the manufacturing overhead cost. Conversion costs is a term used in cost accounting that represents the combination of direct labor costs and manufacturing overhead costs.
14
An inward delivery charges and custom duties are classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
An inward delivery charges and custom duties are classified as direct material costs. Direct materials cost the cost of direct materials which can be easily identified with the unit of production.
15
Supplies, plant maintenance, plant rent, plant insurance and cleaning labour comes under which type of costs?
Discuss
Answer & Solution
Answer: Option B
Solution:
Supplies, plant maintenance, plant rent, plant insurance and cleaning labour comes under factory overhead costs. Factory overhead is the costs incurred during the manufacturing process, not including the costs of direct labor and direct materials. Factory overhead is normally aggregated into cost pools and allocated to units produced during the period.
16
If conversion cost is $25000 and direct manufacturing labour cost is $17000, then manufacturing overhead cost would be
Discuss
Answer & Solution
Answer: Option C
Solution:
Manufacturing overhead cost = Conversion cost - Direct manufacturing labour cost
= $25000 - $17000 = $8,000
17
For companies in service sector, cost which is not considerable is
Discuss
Answer & Solution
Answer: Option A
Solution:
For companies in service sector, cost which is not considerable is Inventoriable costs. Inventoriable costs, also known as product costs, refer to the direct costs associated with the manufacturing of products for revenue generation.
18
An overtime is considered in cost accounting as
Discuss
Answer & Solution
Answer: Option D
Solution:
An overtime is considered in cost accounting as indirect costs and overhead costs. Work performed by an employee or worker in excess of a basic workday ( typically 8 hours a day, 5 days a week) is overtime.
19
In income statement of merchandising costs, period cost includes all costs which are not related to
Discuss
Answer & Solution
Answer: Option D
Solution:
In income statement of merchandising costs, period cost includes all costs which are not related to cost of purchased goods. The cost of goods purchased is the net cost of merchandise acquired.
20
Wages paid to workers of factory are termed as
Discuss
Answer & Solution
Answer: Option B
Solution:
Wages paid to workers of factory are termed as overtime premium. An overtime premium is the additional payment made to an employee for hours worked in excess of 40 hours per week.