Costing MCQ Questions and Solutions with Explanations

61

During a period of rising prices, which of the following inventory pricing methods tends to produce higher cost of goods sold?

A) LIFO B) FIFO C) Simple Average Method D) Inflated Price Method

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Answer & Solution

Answer: Option A

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62

Target price is subtracted from per unit target operating income to calculate

A) total current full cost B) total cost per unit C) target operating income per unit D) target cost per unit

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Answer & Solution

Answer: Option D

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63

Standard costing is more widely applied in . . . . . . . . industries.

A) process and engineering B) jobbing industries C) construction industry D) All of these

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Answer & Solution

Answer: Option A

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64

A technique, which accumulates and tracks costs of business function in value chain attributed to each market, offering from R and D to final customer support, is called

A) product life cycle B) life cycle budgeting C) life cycle costing D) target costing

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Answer & Solution

Answer: Option C

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65

When actual loss is . . . . . . . . than the estimated loss, the difference between the two is considered to be abnormal gain.

A) more B) less C) higher D) None of these

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Answer & Solution

Answer: Option B

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66

What is the basic difference between a static budget and a flexible budget?

A) A static budget is based on one specific level of production and a flexible budget can be prepared for any production level within a relevant range B) A static budget is for an entire production, but a flexible budget is applicable only to a single department C) Flexible budget allow management latitude in meeting goals, where as a static budget is based on a fixed standard D) A flexible budget considers only variable costs, but a static budget considers all costs

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Answer & Solution

Answer: Option A

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67

Return on Investment (RoI) is computed as

A) Net profit ratio * Capital turnover ratio B) Operating net profit ratio * Shareholders fund C) Net profit/Sales D) Cost of sales/Capital employed

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Answer & Solution

Answer: Option A

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68

Which of the following methods of stock valuation results in lower valuation of inventory and lower income when prices are rising:

A) FIFO Method B) LIFO Method C) Simple Average Method D) Weighted Average Method

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Answer & Solution

Answer: Option B

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69

Under Merrick's multiple piece rate system, 120% of the ordinary piece rate is given to workers whose level of performance is between . . . . . . . . of the standard output.

A) 83% and 100% B) 100% and 120% C) 0% and 83% D) None of these

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Answer & Solution

Answer: Option B

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70

Under Merrick's multiple piece rate system, 110% of the ordinary piece rate is given to workers whose level of performance is between . . . . . . . . of the standard output.

A) 83% and 100% B) 100% and 120% C) 0% and 83% D) None of these

Discuss

Answer & Solution

Answer: Option A

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Costing MCQ Questions and Solutions with Explanations | Commerce