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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-4 section-1

Each section contains 100 MCQs on Costing .
31
Number of worker employed is used as basis for the apportionment of ________.
Discuss
Answer & Solution
Answer: Option B
Solution:
Number of worker employed is used as basis for the apportionment of canteen expenses.
32
Fixed cost per unit increases when _______.
Discuss
Answer & Solution
Answer: Option D
Solution:
Fixed cost per unit increases when production volume decreases. Total fixed costs remain the same, within the relevant range. However, the fixed cost per unit decreases as production increases, because the same fixed costs are spread over more units.
33
The process of grouping of costs according to some common characteristics ________.
Discuss
Answer & Solution
Answer: Option D
Solution:
The process of grouping of costs according to some common characteristics classification. Cost may be classified according to their nature, i.e., material, labour and expenses and a number of other characteristics.
34
Which of the following is an example of semi-variable cost?
Discuss
Answer & Solution
Answer: Option C
Solution:
Telephone expenses is an example of semi-variable cost. A semi-variable cost, also known as a semi-fixed cost or a mixed cost, is a cost composed of a mixture of both fixed and variable components.
35
Fire insurance of stock can be apportioned on the basis of ________.
Discuss
Answer & Solution
Answer: Option A
Solution:
Fire insurance of stock can be apportioned on the basis of value of stock. A value stock is a stock that trades at a lower price relative to its fundamentals, such as dividends, earnings, or sales, making it appealing to value investors.
36
Appropriate basis for apportionment of material handling charges is ________.
Discuss
Answer & Solution
Answer: Option C
Solution:
Appropriate basis for apportionment of material handling charges is material consumed. Material handling costs are a crucial component of a manufacturing company's profit calculations.
37
Recreation expenses in factory are apportioned on the basis of ________.
Discuss
Answer & Solution
Answer: Option D
Solution:
Recreation expenses in factory are apportioned on the basis of number of employees. Canteen subsidy or expenses, pension, medical expenses, personnel department expenses, cost of recreational facilities. Expenses of wage department.
38
Charging output with overhead at reasonable rate is called ________.
Discuss
Answer & Solution
Answer: Option C
Solution:
Charging output with overhead at reasonable rate is called apportionment. Distribution of an overhead cost to several departments or cost centers is known as apportionment of overheads.
39
Comprehensive machine hour rate includes ________.
Discuss
Answer & Solution
Answer: Option A
Solution:
Comprehensive machine hour rate includes machine operators wages. Composite machine hour rate means the total variable expenses per hour plus the total fixed, constant or standing charges per hour not directly connected with the operation of the machine, but are the general factory overheads of the department.
40
In labour oriented manufacturing industry which method of overhead absorption is suitable?
Discuss
Answer & Solution
Answer: Option C
Solution:
In labour oriented manufacturing industry Labour hour method of absorption is suitable. Under this method, direct labour hours are considered for determining the overhead absorption rate. This rate is obtained by dividing the overheads by the total productive hours of workers. This method is suitable for labour intensive industries where manual labour is a dominant factor of production.