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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-8 section-1

Each section contains 100 MCQs on Costing .
71
Factory overhead can be charged on the basis of _______.
Discuss
Answer & Solution
Answer: Option C
Solution:
Factory overhead can be charged on the basis of prime cost.

In costing, prime cost is the sum of direct materials cost, direct labor cost, and direct expenses involved in the production process. Therefore, factory overhead can be allocated based on the prime cost, which represents the direct costs associated with production.

Therefore, the correct answer is Option C: prime cost.
72
Office and administrative expenses can be charged on the basis of _______.
Discuss
Answer & Solution
Answer: Option C
Solution:
Office and administrative expenses can be charged on the basis of prime cost. Administrative expenses are the expenses that an organization incurs not directly tied to a specific function such as manufacturing, production or sales.
73
Job costing used in ________.
Discuss
Answer & Solution
Answer: Option C
Solution:
Job costing used in printing works. The purpose of any business is to make money, and job costing is the most effective way to ensure that occurs. In a job costing system, costs may be accumulated either by job or by batch.
74
A document which provides for the detailed cost centre and cost unit is _______.
Discuss
Answer & Solution
Answer: Option B
Solution:
A document which provides for the detailed cost centre and cost unit is cost sheet. Cost sheet is a statement in which the details of expenses incurred on a particular product or job, during a specific period are presented.
75
Direct material is a _______.
Discuss
Answer & Solution
Answer: Option B
Solution:
Direct material is a variable cost. Direct material cost is the cost of the raw materials and components used to create a product.
76
The most important element of cost in manufacturing industries is _________.
Discuss
Answer & Solution
Answer: Option A
Solution:
The most important element of cost in manufacturing industries is material. Material is the first and most important element of cost. In most of the manufacturing organisations, materials form the single largest component of cost.
77
According to which method of pricing issues is close to current economic values?
Discuss
Answer & Solution
Answer: Option A
Solution:
According Last In First Out method of pricing issues is close to current economic values. LIFO Accounting means inventory which was acquired last would be used up or sold first.
78
Continuous stock taking is a part of ________.
Discuss
Answer & Solution
Answer: Option B
Solution:
Continuous stock taking is a part of perpetual inventory. Perpetual inventory is a method of accounting for inventory that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.
79
Which of the following methods of stock control aims at concentrating efforts on selected items of material?
Discuss
Answer & Solution
Answer: Option D
Solution:
ABC analysis methods of stock control aims at concentrating efforts on selected items of material. ABC method of inventory control involves a system that controls inventory and is used for materials and throughout the distribution management.
80
Material control involves ________.
Discuss
Answer & Solution
Answer: Option D
Solution:
Material control involves purchase, storage and issue of material. Materials control is the systematic control over the materials at all its stages procurement, storage and usage so as to help in maintaining regular and uninterrupted flow of the materials in the production pipeline.