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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-5 section-1

Each section contains 100 MCQs on Costing .
41
The type of loss that should not affect cost of inventories is ________.
Discuss
Answer & Solution
Answer: Option A
Solution:
The type of loss that should not affect cost of inventories is normal loss. loss:The loss expected or anticipated prior to production is a normal process loss. It is thus called a standard loss. A provision for such a loss is made before starting production. Weight losses, shrinkage, evaporation, rusting etc. are the examples of normal loss. Normal loss increases the cost of production of the usable goods realized.
42
The expenses relating to a particular process is ________.
Discuss
Answer & Solution
Answer: Option A
Solution:
The expenses relating to a particular process is debited to that process a/c. It is credited to Process A/c and calculated as a % on the input quantity.
43
Normal loss in the manufacturing process leads to _______.
Discuss
Answer & Solution
Answer: Option B
Solution:
Normal loss in the manufacturing process leads to increase in unit price of other good units. These normal losses are expected in the manufacturing process and cannot be avoided. Due to this our total cost of production will increase.
44
Abnormal loss and its value are _______.
Discuss
Answer & Solution
Answer: Option B
Solution:
Abnormal loss and its value are credited to process a/c. Abnormal Loss both in terms of quantity and value is recorded by. Crediting Process a/c and; Debiting Abnormal Loss a/c.
45
Actual loss is more than the predetermined normal loss, it is ________.
Discuss
Answer & Solution
Answer: Option B
Solution:
Actual loss is more than the predetermined normal loss, it is abnormal loss. Abnormal loss is the extra loss resulting when actual loss is greater than normal or expected loss, and it is given a cost. The abnormal loss is valued at the some unit rate as 'good' units and do not affect the the cost of good production. The cost is analysed separately in an abnormal loss account.
46
Classification and accumulation of costs by fixed and variable costs is of special importance in ________.
Discuss
Answer & Solution
Answer: Option D
Solution:
Classification and accumulation of costs by fixed and variable costs is of special importance in operating costing. Operating costing applies where standardized services are provided by an undertaking.
47
Process cost is ascertained and recorded in ________.
Discuss
Answer & Solution
Answer: Option D
Solution:
Process cost is ascertained and recorded in separate ledger a/c. Process costing is an accounting methodology that traces and accumulates direct costs, and allocates indirect costs of a manufacturing process. Costs are assigned to products, usually in a large batch, which might include an entire month's production.
48
Batch costing is useful to determine ________.
Discuss
Answer & Solution
Answer: Option C
Solution:
Batch costing is useful to determine economic batch quantity. In each batch, there are a number of units. The ascertainment of economic batch quantity is very useful. Economic batch quantity may be calculated by using the formula meant for calculating Economic Order Quantity (EOQ) in case of material control.
49
The basis for the payment of cash by contractee under contract is ________.
Discuss
Answer & Solution
Answer: Option A
Solution:
The basis for the payment of cash by contractee under contract is work certified. During the period of contract, Contractee has to pay sums of amount to contractor especially where a contractor is engaged in a big and long term contract. This amount is paid on the basis of certification of work done by surveyors or architects on behalf of the Contractee, who certified the value of the work done by the contractor.
50
Contract a/c is _______.
Discuss
Answer & Solution
Answer: Option A
Solution:
Contract a/c is a nominal a/c. Nominal Accounts are accounts related and associated to losses, expenses, income or gains.