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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-3

Each section contains 100 MCQs on Costing .
31
Calculate the labour turnover rate according to Separation method from the following:
No of workers on the payroll:
- At the beginning of the month: 500
- At the end of the month: 600

During the month, 5 workers left, 20 workers were discharged and 75 workers were recruited Of these, 10 workers were recruited in the vacancies of those leaving and while the rest were engaged for an expansion scheme
Discuss
Answer & Solution
Answer: Option A
Solution:
Separation method = No of worker separated during the period/Average no of workers at same period × 100
No of worker separated during the period = 25
Average no of workers = (500+600)/2= 550
∴25/ 550 × 100
=4.55%
32
A worker is allowed 60 hours to complete the job on a guaranteed wage of Rs 10 per hour Under the Rowan Plan, he gets an hourly wage of Rs 12 per hour For the same saving in time, how much he will get under the Halsey Plan?
Discuss
Answer & Solution
Answer: Option B
No explanation is given for this question. Let's Discuss on Board
33
Overhead refers to:
Discuss
Answer & Solution
Answer: Option B
Solution:
Overhead refers to all Indirect costs. Indirect costs include administration, personnel and security costs. These are those costs which are not directly related to production. Some indirect costs may be overhead. But some overhead costs can be directly attributed to a project and are direct costs.
34
Allotment of whole item of cost to a cost centre or cost unit is known as:
Discuss
Answer & Solution
Answer: Option B
Solution:
Allotment of whole item of cost to a cost centre or cost unit is known as Cost Allocation. Cost allocation is the process of identifying, aggregating, and assigning costs to cost objects. A cost object is any activity or item for which you want to separately measure costs.
35
Which of the following is not a method of cost absorption?
Discuss
Answer & Solution
Answer: Option D
Solution:
Repeated distribution method is not a method of cost absorption. Absorption costing is a method for accumulating the costs associated with a production process and apportioning them to individual products.
36
Service departments costs should be allocated to:
Discuss
Answer & Solution
Answer: Option C
Solution:
The service departments render service (benefit) to the production departments. Service departments may exist to provide services of various kinds to other departments. For example, personnel, maintenance, boiler house, pump house, power generation departments are service departments which provide service to the production and other service centres.
37
Most suitable basis for apportioning insurance of machine would be:
Discuss
Answer & Solution
Answer: Option B
Solution:
Most suitable basis for apportioning insurance of machine would be Value of Machines.
38
Blanket overhead rate is:
Discuss
Answer & Solution
Answer: Option A
Solution:
Blanket overhead rate is one single overhead absorption rate for the whole factory. It is a common absorption rate used throughout a factory and for all jobs and units of output irrespective of the departments in which they were produced or processed. It is a one single overhead absorption rate for the whole of the factory.
39
AT Co makes a single product and is preparing its material usage budget for next year Each unit of product requires 2kg of material, and 5,000 units of product are to be produced next year Opening inventory of material is budgeted to be 800 kg and AT co budgets to increase material inventory at the end of next year by 20%. The material usage budget for next year is
Discuss
Answer & Solution
Answer: Option C
No explanation is given for this question. Let's Discuss on Board
40
"During September, 300 labour hours were worked for a total cost of Rs. 4800 The variable overhead expenditure variance was Rs. 600 (A) Overheads are assumed to be related to direct labour hours of active working.
What was the standard cost per labour hour?"
Discuss
Answer & Solution
Answer: Option A
Solution:
Total Cost 4800 Variance was Rs. 600 (A) As Variance adverse means it is higher than standard cost So standard cost = 4800 - 600 = 4200 Labour worked 300 hours Standard cost per labour hour = 4200/300 =14