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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-9 section-3

Each section contains 100 MCQs on Costing .
81
"Following information is available of XYZ Limited for quarter ended June, 20XX
Fixed cost Rs 5,00,000
Variable cost Rs 10 per unit
Selling price Rs 15 per unit
Output level 1,50,000 units
What will be amount of profit earned during the quarter using the marginal costing technique?"
Discuss
Answer & Solution
Answer: Option A
No explanation is given for this question. Let's Discuss on Board
82
The P/v ratio of a company is 50% and margin of safety is 40%. If present sales is Rs 30,00,000 then Break Even Point in Rs will be
Discuss
Answer & Solution
Answer: Option B
Solution:
Break even point = Sales - Margin of Safety
= 3000000 * (100% - 40%)
= Rs. 1800000
83
Following information is available of PQR for year ended March, 20XX: 4,000 units in process, 3,800 units output, 10% of input is normal wastage, Rs 2.50 per unit is scrap value and Rs 46,000 incurred towards total process cost then amount on account of abnormal gain to be transferred to Costing P&L will be:-
Discuss
Answer & Solution
Answer: Option A
Solution:
VALUE OF ABNORMAL GAIN = (Total cost - scrap value)/No of unit produced × Abnormal Issue
=(46000-(400×2.50))/(4000-400) × 200
=2500
84
In element-wise classification of overheads, which one of the following is not included —
Discuss
Answer & Solution
Answer: Option A
Solution:
In element-wise classification of overheads, Fixed overheads is not included. The fixed overheads do not vary in total in a certain level of production.
85
When the sales increase from Rs 40,000 to Rs 60,000 and profit increases by Rs 5,000, the P/V ratio is —
Discuss
Answer & Solution
Answer: Option C
Solution:
Increase in sales = Rs. 60000 - Rs. 40000 = Rs. 20000
PV Ratio = Increase in Profit / Increase in sales
= 5000 / 20000 = 0.25
86
Labour related to manufacturing of product can be classified under
Discuss
Answer & Solution
Answer: Option A
Solution:
Labour related to manufacturing of product can be classified under direct manufacturing labour costs. The cost of labor is the amount of employee wages and benefits, plus payroll taxes paid by an employer. The cost of labor can be broken into direct and indirect costs.
87
Direct material costs are added into direct manufacturing costs to calculate
Discuss
Answer & Solution
Answer: Option B
Solution:
Direct material costs are added into direct manufacturing costs to calculate prime costs. Direct materials cost the cost of direct materials which can be easily identified with the unit of production.
88
Direct manufacturing labour costs is added into manufacturing overhead cost to calculate
Discuss
Answer & Solution
Answer: Option B
Solution:
Direct manufacturing labour costs is added into manufacturing overhead cost to calculate conversion costs. Conversion costs is a term used in cost accounting that represents the combination of direct labor costs and manufacturing overhead costs.
89
In cost terms, direct manufacturing labour cost is included in
Discuss
Answer & Solution
Answer: Option D
Solution:
In cost terms, direct manufacturing labour cost is included in prime costs and conversion costs. Direct labor cost is the total cost of employing workers that work directly on a manufacturing product.
90
Conversion cost is $20000 and manufacturing overhead cost is $7000, then direct manufacturing labour cost will be
Discuss
Answer & Solution
Answer: Option B
Solution:
Direct manufacturing labour cost = Conversion cost - Manufacturing overhead cost
= $20000 - $7000 = $13000