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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-2

Each section contains 100 MCQs on Costing .
31
Bad debt is an example of ________.
Discuss
Answer & Solution
Answer: Option C
Solution:
Bad debt is an example of selling overhead. The expenses incurred by an organization in carrying out its selling activities.
32
Variable cost per unit ________.
Discuss
Answer & Solution
Answer: Option B
Solution:
Variable cost per unit remains constant. Variable costs are the costs that change in total each time an additional unit is produced or sold. With a variable cost, the per unit cost stays the same, but the more units produced or sold, the higher the total cost. Direct materials is a variable cost.
33
Increase in total variable cost is due to ________.
Discuss
Answer & Solution
Answer: Option C
Solution:
Increase in total variable cost is due to increase in production. Variable costs increase or decrease depending on a company's production volume; they rise as production increases and fall as production decreases.
34
An example of fixed cost ________.
Discuss
Answer & Solution
Answer: Option B
Solution:
An example of fixed cost rent for building. A fixed cost is a cost that does not change with an increase or decrease in the amount of goods or services produced or sold.
35
The process of allocating and apportioning the costs on suitable basis to all the departments is _______.
Discuss
Answer & Solution
Answer: Option B
Solution:
The process of allocating and apportioning the costs on suitable basis to all the departments is primary distribution.
36
The process of redistribution of service department costs to production departments is ________.
Discuss
Answer & Solution
Answer: Option C
Solution:
The process of redistribution of service department costs to production departments is secondary distribution.
37
Depreciation of plant can be apportioned on the basis of ________.
Discuss
Answer & Solution
Answer: Option A
Solution:
Depreciation of plant can be apportioned on the basis of plant value.
38
Indirect materials can be apportioned on the basis of ________.
Discuss
Answer & Solution
Answer: Option A
Solution:
Indirect materials can be apportioned on the basis of direct material. Indirect materials are materials used in the production process, but which cannot be linked to a specific product or job.
39
A cost unit is ________.
Discuss
Answer & Solution
Answer: Option C
Solution:
A cost unit is a unit of production or service in relation to which costs are ascertained. A cost unit refers to the unit of quantity of product, service or time (or combination of these) in relation to which costs may be ascertained or expressed.
40
Factory overhead is also called as ________.
Discuss
Answer & Solution
Answer: Option C
Solution:
Factory overhead is also called as works overhead. Factory overhead, also called manufacturing overhead or work overhead or American English factory burden, is the total cost involved in operating all production facilities of a manufacturing business that cannot be traced directly to a product. It generally applies to indirect labor and indirect cost.