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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-3 section-7

Each section contains 100 MCQs on Costing .
21
Method of revenue allocation, which ranks products included in bundle according to predetermined criteria of management is known as
Discuss
Answer & Solution
Answer: Option C
Solution:
Method of revenue allocation, which ranks products included in bundle according to predetermined criteria of management is known as incremental revenue allocation method. The ranking of the individual products in the suite determines the revenues allocated to them.
22
Method, which allocates cost of support department for operating departments by recognizing all mutual services provided is classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
Method, which allocates cost of support department for operating departments by recognizing all mutual services provided is classified as reciprocal method. In the reciprocal method, the relationship between the service departments is recognized. This means service department costs are allocated to and from the other service departments.
23
Package which consists of two or more products to be sold for single price, but components of products in package have separate stand-alone price is called
Discuss
Answer & Solution
Answer: Option C
Solution:
Package which consists of two or more products to be sold for single price, but components of products in package have separate stand-alone price is called bundled product. A bundled product is a package of two or more stand-alone products sold together for a single cost.
24
Method, which allocates cost of support department to operating and support departments is known as
Discuss
Answer & Solution
Answer: Option C
Solution:
Method, which allocates cost of support department to operating and support departments is known as step down method. The step method (also known as step down method) allocates the cost of a service department to other service departments as well as to operating departments. The cost allocation under step method is a sequential process.
25
Approaches to allocate costs of support department do not include
Discuss
Answer & Solution
Answer: Option D
Solution:
Approaches to allocate costs of support department do not include dual-rate cost-allocation method and single rate cost allocation method.
26
In incremental cost allocation method, cost object user who is ranked second in ranking order is known as
Discuss
Answer & Solution
Answer: Option A
Solution:
In incremental cost allocation method, cost object user who is ranked second in ranking order is known as First incremental user.
27
Second ranked product in incremental revenue allocation method is termed as
Discuss
Answer & Solution
Answer: Option B
Solution:
Second ranked product in incremental revenue allocation method is termed as First incremental product.
28
Methods used to allocate costs of reciprocal support departments include
Discuss
Answer & Solution
Answer: Option D
Solution:
Methods used to allocate costs of reciprocal support departments include direct method, step down and reciprocal method.
29
Method which allocates cost of support department to only operating departments is called
Discuss
Answer & Solution
Answer: Option B
Solution:
Method which allocates cost of support department to only operating departments is called direct method. The direct allocation method is a technique for charging the cost of service departments to other parts of a business.
30
Process in which earned revenue is related to specific revenue object, which can cannot trace it in cost effective way is known as
Discuss
Answer & Solution
Answer: Option A
Solution:
Process in which earned revenue is related to specific revenue object, which can cannot trace it in cost effective way is known as revenue allocation. Revenue allocation can be described as a method of sharing the centrally generated revenue among different tiers of government and how the amount allocated to a particular tier is shared among its components for economic development.