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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-4

Each section contains 100 MCQs on Costing .
41
Required rate of return, is multiplied per unit cost of purchased units to calculate
Discuss
Answer & Solution
Answer: Option B
Solution:
Required rate of return, is multiplied per unit cost of purchased units to calculate relevant opportunity cost of capital.
42
An ability of an accounting system, to point out use of resources in every step of production process is called
Discuss
Answer & Solution
Answer: Option B
Solution:
An ability of an accounting system, to point out use of resources in every step of production process is called audit trails. An audit trail is a step-by-step record by which accounting or trade data can be traced to its source.
43
Systematic flow of services, goods or information from buying material for product delivery to customers is known as
Discuss
Answer & Solution
Answer: Option A
Solution:
Systematic flow of services, goods or information from buying material for product delivery to customers is known as supply chain. A supply chain is a network between a company and its suppliers to produce and distribute a specific product to the final buyer. This network includes different activities, people, entities, information, and resources.
44
Costs associated with storage of finished goods such as spoilage, obsolescence and insurance of goods are classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Costs associated with storage of finished goods such as spoilage, obsolescence and insurance of goods are classified as carrying costs. Carrying costs are the costs of holding inventory and include maintenance, specifically in regard to perishable items, and storage costs.
45
Costs of goods acquired from suppliers is classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
Costs of goods acquired from suppliers is classified as purchasing costs. It is important when you decide to buy a home that you have a full understanding of the costs associated with your purchase.
46
If demand in units is 18000, relevant ordering cost for each year is $150 and an order quantity is 1500, then annual relevant ordering cost would be
Discuss
Answer & Solution
Answer: Option D
Solution:
Annual relevant ordering cost
= (18000 ÷ (1500/150 × 100)) = $180
47
If relevant opportunity cost of capital is $2950 and relevant carrying cost of inventory is $6700, then relevant incremental cost will be
Discuss
Answer & Solution
Answer: Option C
Solution:
Relevant incremental cost = Relevant carrying cost of inventory - Relevant opportunity cost of capital
= $6700 - $2950 = $3,750
48
Profit forgone by capital investment in inventory rather than investment of capital to somewhere else is classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
Profit forgone by capital investment in inventory rather than investment of capital to somewhere else is classified as relevant opportunity cost of capital.
49
An example of shrinkage costs is
Discuss
Answer & Solution
Answer: Option D
Solution:
An example of shrinkage costs is clerical errors. Shrinkage is the loss of inventory that can be attributed to factors such as employee theft, shoplifting, administrative error, vendor fraud, damage in transit or in store, and cashier errors that benefit the customer.
50
If relevant incremental costs are $5000 and relevant opportunity cost of invested capital is $2500, then relevant inventory carrying costs would be
Discuss
Answer & Solution
Answer: Option A
Solution:
Relevant inventory carrying costs = Relevant incremental costs + Relevant opportunity cost of invested capital
= $5000 + $2500 = $7,500