Costing MCQ Questions and Solutions with Explanations

11

Cash from operation is equal to

A) net profit plus decrease in current assets B) net profit plus increase in current assets C) net profit minus decrease in current assets D) None of the above

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Answer & Solution

Answer: Option A

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12

The loss incurred on an incomplete contract is transferred to . . . . . . . . account.

A) costing profit and loss account B) profit and loss account C) trading account D) deferred to next year

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Answer & Solution

Answer: Option B

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13

BOGEY standard in Cost Accounting is also known as:

A) Basic standard B) Ideal standard C) Attainable standard D) Abnormal loss standard E) Basic waste control standard

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Answer & Solution

Answer: Option B

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14

Costing and cost accounting are . . . . . . . .

A) not the same B) one and the same C) not related at all D) None of these

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Answer & Solution

Answer: Option A

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15

The formula $$\frac{{\text{Q}}}{2}$$ is used to compute the:

A) Total ordering cost B) Total carrying cost C) Opportunity cost D) Re-order point

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Answer & Solution

Answer: Option B

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16

Debt equity ratio is a test of

A) liquidity B) profitability C) solvency D) turnover

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Answer & Solution

Answer: Option C

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17

Inventory turnover ratio = Cost of . . . . . . . . during the period ÷ Cost of average inventory held during the period.

A) inventory consumed B) minimum inventory C) maximum inventory D) None of these

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Answer & Solution

Answer: Option A

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18

Bin card is maintained by the . . . . . . . .

A) Cost accountant B) Clerk C) Storekeeper D) Branch accountant

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Answer & Solution

Answer: Option C

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19

Opportunity cost of capital invested in inventory is included in:

A) Ordering cost B) Carrying cost C) Stock-out cost D) Overheads

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Answer & Solution

Answer: Option B

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20

Which of the following statements is true about standard labour time?

A) Standard labour time indicates the time in hours needed for a specific process B) It is standardized on the basis of past experience C) In fixing standard time, due allowance should not be given to fatigue and tool setting D) The production manager does not provide any input in setting the labour time standards

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Answer & Solution

Answer: Option A

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Costing MCQ Questions and Solutions with Explanations | Commerce