Costing MCQ Questions and Solutions with Explanations

31

The labour rate of pay variance can be calculated by which of the following equations?

A) Budgeted labour costs - Actual labour costs B) (Standard hours - Actual hours) × Actual wage rate C) (Standard wage rate - Actual wage rate) × Actual hours worked D) (Standard wage rate - Actual wage rate) × Standard hours worked

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Answer & Solution

Answer: Option C

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32

Operating costing is also known as . . . . . . . . costing.

A) service B) batch C) multiple D) job

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Answer & Solution

Answer: Option A

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33

. . . . . . . . is a technique of stock control which leads to saving of time of the management because attention is required to be paid only to some of the items rather than on all the items.

A) ABC Analysis B) JIT Inventory System C) VED Analysis D) Perpetual Inventory System

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Answer & Solution

Answer: Option A

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34

Match the items of List-I with the items of List-Il and indicate the correct answer.

List-I	List-II
a. Debtors turnover ratio	1. Solvency ratio
b. Proprietary ratio	2. Liquidity ratio
c. Operating ratio	3. Activity ratio
d. Acid test ratio	4. Profitability ratio

A) a-2, b-4, c-3, d-1 B) a-3, b-2, c-1, d-4 C) a-3, b-1, c-4, d-2 D) a-4, b-3, c-2, d-1

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Answer & Solution

Answer: Option C

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35

Match the following.

List-I	List-II
a. Increase in fund	1. Application of funds
b. Goods purchased on credit	2. Drain in working capital
c. Commission outstanding	3. Sources of funds
d. Net loss	4. No flow of funds

A) a-4, b-3, c-2, d-1 B) a-4, b-3, c-1, d-2 C) a-3, b-4, c-1, d-2 D) a-3, b-4, c-2, d-1

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Answer & Solution

Answer: Option C

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36

Cash Budget is a . . . . . . . . budget.

A) long-term B) very long-term C) short-term D) very short-term

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Answer & Solution

Answer: Option C

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37

A bill of material serves the purpose of . . . . . . . .

A) material requisition B) stores ledger C) material issue analysis sheet D) None of these

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Answer & Solution

Answer: Option A

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38

When is a business unit known to be a profit centre?

A) If its operations or departments are not directly involved in revenue generating activities, but instead focus on elements of cost control B) If its management is evaluated not only on revenues and expenses, but also on asset investment C) If its management is compensated based on the level of profitability D) If its management is held accountable for both revenues and expenses and has the authority to make decision regarding its products, markets and source of supply

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Answer & Solution

Answer: Option D

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39

The relationship between two financial variables can be expressed in

A) Pure ratio B) Percentage C) Rate or time D) Either of the above

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Answer & Solution

Answer: Option D

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40

Period costs charged to . . . . . . . .

A) cost of production B) products C) period D) None of these

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Answer & Solution

Answer: Option C

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Costing MCQ Questions and Solutions with Explanations | Commerce