Costing MCQ Questions and Solutions with Explanations

Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7 Section 8 Section 9 Section 10 Section 11 Section 12 Section 13 Section 14

1.
. . . . . . . . is the smallest segment of activity or area or responsibility for which costs are accumulated.

A. Cost object

B. Cost centre

C. Cost driver

D. None of the above

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2.
Economic order quantity analysis is used for-

A. Ratio analysis

B. Budgetory control

C. Inventory control

D. Sales budgeting

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3.
Which of the following involves receiving a required inventory item at the exact time needed?

A. PERT

B. FOB

C. JIT

D. ABC

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4.
Labour rate variance is computed by multiplying the:

A. Standard labour rate with the difference between standard labour hours and actual labour hours

B. Actual labour hours with the difference between standard labour hours and actual labour hours

C. Actual labour rate with the difference between standard labour rate and actual labour hours

D. None of the above

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5.
Market price method is considered to be the best method when . . . . . . . .

A. quotations have to be sent

B. prices fluctuate

C. materials are subject to natural wastage

D. None of these

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6.
Bin card is a record of . . . . . . . . only.

A. cost

B. value

C. quantity

D. expense

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7.
The full form of CIF is:

A. Cost, Insurance and Freight

B. Cost, Investment and Freight

C. Company, Insurance and Freight

D. Company, Investment and Freight

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8.
Process costing is used in which industry?

A. Manufacturing industries

B. Mining industries

C. Both A and B

D. None of the above

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9.
Fixed cost per unit . . . . . . . . with rise in output and . . . . . . . . with fall in output.

A. decreases, increases

B. increases, decreases

C. is constant, remains same

D. None of the above

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10.
Match the following.

List-I List-II

a. Prepaid expenses 1. Solvency ratio

b. Sales ratio 2. Net profit margin × Investment turnover

c. Return on investments 3. Turnover ratio

d. 100-Proprietary ratio 4. Current asset

A. a-4, b-3, c-1, d-2

B. a-4, b-3, c-2, d-1

C. a-2, b-1, c-4, d-3

D. a-2, b-4, c-1, d-3

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1 2 3 4 5 6 7 8 9 10

List-I	List-II
a. Prepaid expenses	1. Solvency ratio
b. Sales ratio	2. Net profit margin × Investment turnover
c. Return on investments	3. Turnover ratio
d. 100-Proprietary ratio	4. Current asset

Costing MCQ Questions and Solutions with Explanations | Commerce

1. . . . . . . . . is the smallest segment of activity or area or responsibility for which costs are accumulated.

Answer & Solution

2. Economic order quantity analysis is used for-

Answer & Solution

3. Which of the following involves receiving a required inventory item at the exact time needed?

Answer & Solution

4. Labour rate variance is computed by multiplying the:

Answer & Solution

5. Market price method is considered to be the best method when . . . . . . . .

Answer & Solution

6. Bin card is a record of . . . . . . . . only.

Answer & Solution

7. The full form of CIF is:

Answer & Solution

8. Process costing is used in which industry?

Answer & Solution

9. Fixed cost per unit . . . . . . . . with rise in output and . . . . . . . . with fall in output.

Answer & Solution

10. Match the following. List-I List-II a. Prepaid expenses 1. Solvency ratio b. Sales ratio 2. Net profit margin × Investment turnover c. Return on investments 3. Turnover ratio d. 100-Proprietary ratio 4. Current asset

Answer & Solution

Read More Section(Costing)

1.
. . . . . . . . is the smallest segment of activity or area or responsibility for which costs are accumulated.

2.
Economic order quantity analysis is used for-

3.
Which of the following involves receiving a required inventory item at the exact time needed?

4.
Labour rate variance is computed by multiplying the:

5.
Market price method is considered to be the best method when . . . . . . . .

6.
Bin card is a record of . . . . . . . . only.

7.
The full form of CIF is:

8.
Process costing is used in which industry?

9.
Fixed cost per unit . . . . . . . . with rise in output and . . . . . . . . with fall in output.

10.
Match the following.

List-I List-II

a. Prepaid expenses 1. Solvency ratio

b. Sales ratio 2. Net profit margin × Investment turnover

c. Return on investments 3. Turnover ratio

d. 100-Proprietary ratio 4. Current asset