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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-6

Each section contains 100 MCQs on Costing .
31
In activity based costing system, description of activity can be classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
In activity based costing system, description of activity can be classified as activity list and activity dictionary.
32
Factors that accelerate process of refining a costing system include
Discuss
Answer & Solution
Answer: Option D
Solution:
Factors that accelerate process of refining a costing system include increase in product diversity, increase in indirect costs and product market competitions.
33
Cost pool category, which have similar cause and effect relationship, with each cost driver uses as an allocation base is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Cost pool category, which have similar cause and effect relationship, with each cost driver uses as an allocation base is classified as homogenous cost pool. A cost pool is a grouping of individual costs, typically by department or service center.
34
In activity based costing method implementation, indirect costs are allocated by using the
Discuss
Answer & Solution
Answer: Option B
Solution:
In activity based costing method implementation, indirect costs are allocated by using the One or two cost pools. Cost pools are commonly used for the allocation of factory overhead to units of production, as required by several accounting frameworks.
35
Costing system, in which individual activities are identified as cost object is considered as
Discuss
Answer & Solution
Answer: Option B
Solution:
Costing system, in which individual activities are identified as cost object is considered as activity based costing. The ABC system of cost accounting is based on activities, which is any event, unit of work, or task with a specific goal, such as setting up machines for production, designing products, distributing finished goods, or operating machines.
36
Type of costs that cannot be traced for individual products but help in supporting an organization are classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Type of costs that cannot be traced for individual products but help in supporting an organization are classified as facility sustaining costs.
37
In activity based costing method implementation, an output unit level costs are classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
In activity based costing method implementation, an output unit level costs are classified as indirect costs. Indirect costs are costs used by multiple activities, and which cannot therefore be assigned to specific cost objects.
38
Hierarchy which is based on different types of cost allocation and drivers, is to categorize cost pool activity is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Hierarchy which is based on different types of cost allocation and drivers, is to categorize cost pool activity is classified as cost hierarchy. The cost hierarchy is a classification system used in activity-based costing that designates activities based on how easily they can be traced to a product.
39
Product which requires large amount of resources, but incur low per unit cost is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Product which requires large amount of resources, but incur low per unit cost is classified as product under costing. Product cost refers to the costs incurred to create a product. These costs include direct labor, direct materials, consumable production supplies, and factory overhead.
40
Costs of undertaken activities is to support individual products are known as
Discuss
Answer & Solution
Answer: Option D
Solution:
Costs of undertaken activities is to support individual products are known as product sustaining costs. Product-sustaining costs are cost activities that support a particular product or service line, regardless of the number of units produced.