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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-7 section-1

Each section contains 100 MCQs on Costing .
61
The stores keeper should initiate a purchase requisition when stock reaches ________.
Discuss
Answer & Solution
Answer: Option D
Solution:
The stores keeper should initiate a purchase requisition when stock reaches Re-order level. Reorder level (or reorder point) is the inventory level at which a company would place a new order or start a new manufacturing run.
62
Direct cost incurred can be identified with ________.
Discuss
Answer & Solution
Answer: Option B
Solution:
Direct cost incurred can be identified with each unit of output. Direct costs (such as for labor, material, fuel or power) vary with the rate of output but are uniform for each unit of production, and are usually under the control and responsibility of the department manager.
63
Costing refers to the techniques and processes of ________.
Discuss
Answer & Solution
Answer: Option A
Solution:
Costing refers to the techniques and processes of ascertainment of costs. Costing is any system for assigning costs to an element of a business.
64
Cost accounting was developed because of the _________.
Discuss
Answer & Solution
Answer: Option A
Solution:
Cost accounting was developed because of the limitations of the financial accounting. The limitations of financial statements are those factors that a user should be aware of before relying on them to an excessive extent. The following are all limitations of financial statements: Dependence on historical costs. Transactions are initially recorded at their cost.
65
Multiple costing is a technique of using two or more costing methods for ascertainment of cost by _______.
Discuss
Answer & Solution
Answer: Option A
Solution:
Multiple costing is a technique of using two or more costing methods for ascertainment of cost by the same firm. Multiple costing, also known as composite costing, is a type of accounting method used when goods are sold that contain several other processed parts, and these parts are costed differently.
66
Which one of the following is not considered for preparation of cost sheet?
Discuss
Answer & Solution
Answer: Option B
Solution:
Goodwill written off is not considered for preparation of cost sheet. A firm will write off goodwill when it wants to shrink the balance sheet and if it thinks that the goodwill doesnt represent anything.
67
Sale of defectives is reduced from ________.
Discuss
Answer & Solution
Answer: Option C
Solution:
Sale of defectives is reduced from cost of production. The sale value of scrap may be deducted from the cost of materials consumed or factory overhead.
68
Cost of sales plus profit is _______.
Discuss
Answer & Solution
Answer: Option A
Solution:
Cost of sales plus profit is selling price.
69
Prime cost includes _______.
Discuss
Answer & Solution
Answer: Option C
Solution:
Prime cost includes direct materials, direct wages and direct expenses. Prime costs are a firm's expenses directly related to the materials and labor used in production. It refers to a manufactured product's costs, which are calculated to ensure the best profit margin for a company.
70
Depreciation of plant and machinery is a part of ________.
Discuss
Answer & Solution
Answer: Option A
Solution:
Depreciation of plant and machinery is a part of factory overhead. Factory overhead is the costs incurred during the manufacturing process, not including the costs of direct labor and direct materials. Factory overhead is normally aggregated into cost pools and allocated to units produced during the period.