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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-2

Each section contains 100 MCQs on Costing .
61
Input is 10,000 units and normal loss is 20% of input and abnormal loss is 400 units What is actual output?
Discuss
Answer & Solution
Answer: Option A
Solution:
Output after normal loss
= 10000 - (10000 × 20%) = 8000 units.
Output after abnormal loss
= 8000 - 400 = 7600 units.
62
Cost of process Rs1,60,000 and profit to be charged on the transfer price is 20% What is the inter process profit?
Discuss
Answer & Solution
Answer: Option B
Solution:
Inter process profit
= (160000 / (100% - 20%) - 160000)
= 200000 - 160000 = Rs. 40000.
63
Job costing method is the most suitable method for ________.
Discuss
Answer & Solution
Answer: Option D
Solution:
Job costing method is the most suitable method for repair shops. A job costing system is used by companies that produce unique products or jobs.
64
Which method of costing can be used in furniture manufacture industry?
Discuss
Answer & Solution
Answer: Option A
Solution:
Job costing method of costing can be used in furniture manufacture industry. A job card is made for each work or job. This method of costing is used in the factories which produce the machine tool and other engineering products, furniture projects, hardware and interior decoration. This method of costing is also called a piece of work costing or terminal costing.
65
Contract costing is most appropriate method of costing for ________.
Discuss
Answer & Solution
Answer: Option A
Solution:
Contract costing is most appropriate method of costing for construction industry. Contract costing is the tracking of costs associated with a specific contract with a customer.
66
Cost of contract and profit or loss thereon are determined by preparing ________.
Discuss
Answer & Solution
Answer: Option D
Solution:
Cost of contract and profit or loss thereon are determined by preparing separate ledger a/c. A separate contract account is prepared for each contract.
67
The basis for determining profit to be taken into account on incomplete contract is ________.
Discuss
Answer & Solution
Answer: Option C
Solution:
The basis for determining profit to be taken into account on incomplete contract is percentage of work certified as done.
68
The amount paid to sub-contractor is ________.
Discuss
Answer & Solution
Answer: Option B
Solution:
The amount paid to sub-contractor is debited to contract a/c. Contract means a big job in which work is done at site and not in factory premises. The cost of each contract is ascertained. Thus in this method of costing, each contract is a cost unit and an account is opened for each contract in the books of contractor to ascertain profit/loss thereon.
69
Work uncertified is ________.
Discuss
Answer & Solution
Answer: Option B
Solution:
Work uncertified is credited to contract a/c. The cost of work uncertified represents the cost of work which has already been. completed, but for that the contractor has not received completion certificate from the contractee's surveyor or architect.
70
In case of complete contract, the whole amount of profit is transferred to ________.
Discuss
Answer & Solution
Answer: Option C
Solution:
In case of complete contract, the whole amount of profit is transferred to profit and loss a/c.