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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-2

Each section contains 100 MCQs on Costing .
41
Sundry overhead expenses may be apportioned in the ratio of ________.
Discuss
Answer & Solution
Answer: Option C
Solution:
Sundry overhead expenses may be apportioned in the ratio of labour hours. Sundry expenses are expenses that are small in amount and rare in occurrence. For these rare and insignificant expenses, a company might use a general ledger account entitled Sundry Expenses for these items.
42
Departmentalization of overhead is known as ________.
Discuss
Answer & Solution
Answer: Option A
Solution:
Departmentalization of overhead is known as primary distribution. Primary distribution involves apportionment or allocation of overhead to all departments in a factory on logical and rational basis. This process of apportionment is also known as departmentalisation of overhead.
43
When the actual overhead is less than the absorbed overhead it is ________.
Discuss
Answer & Solution
Answer: Option A
Solution:
When the actual overhead is less than the absorbed overhead it is over absorption. If the absorbed overheads at predetermined rates are greater than actual overheads, this is known as OVER-ABSORPTION.
44
Factory overhead is Rs 3,00,000 and direct material cost is Rs 5,00,000 What is the overhead rate under direct material cost method?
Discuss
Answer & Solution
Answer: Option C
Solution:
Overhead rate = Factory overhead / Direct material cost * 100
= 300000 / 500000 * 100 = 60%.
45
Works overhead is Rs 40,000, total machine hours is 8500 hours and time allowed for machine setting is 500 houRs What is the machine rate?
Discuss
Answer & Solution
Answer: Option D
Solution:
Machine hour rate = Works overhead / Machine hour
= 40000 / (8500 - 500) = Rs. 5 per hour.
46
Expenditure over and above prime cost is known as ________.
Discuss
Answer & Solution
Answer: Option A
Solution:
Expenditure over and above prime cost is known as overhead. Overhead is those costs required to run a business, but which cannot be directly attributed to any specific business activity, product, or service.
47
In a machine dominated industry which method of overhead absorption is suitable?
Discuss
Answer & Solution
Answer: Option D
Solution:
In a machine dominated industry Machine hour method of overhead absorption is suitable. Under this method, hourly rate of depreciation is calculated. The cost of the asset (less residual value if any) is divided by the estimated working hours. The actual depreciate for any given period depends upon the working hours during that year.
48
Most appropriate basis for the apportionment of power is ________.
Discuss
Answer & Solution
Answer: Option D
Solution:
Most appropriate basis for the apportionment of power is horse power of machines.
49
The costing method which can be used in industry where the product pass through different processes is known as ________.
Discuss
Answer & Solution
Answer: Option D
Solution:
The costing method which can be used in industry where the product pass through different processes is known as process costing. Process costing is used when there is mass production of similar products, where the costs associated with individual units of output cannot be differentiated from each other.
50
Value of normal loss is charged to ________.
Discuss
Answer & Solution
Answer: Option A
Solution:
Value of normal loss is charged to other good product. The value of normal loss is assessed on the basis of the production cost with which the profit and loss account is charged.