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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-1 section-3

Each section contains 100 MCQs on Costing .
1
Describe the method of costing to be applied in case of Nursing Home:
Discuss
Answer & Solution
Answer: Option A
Solution:
Operating Costing to be applied in case of Nursing Home. Operating costing is an extension and refined form of process costing. It is also more or less very similar to single or output costing.
2
Describe the cost unit applicable to the Bicycle industry:
Discuss
Answer & Solution
Answer: Option B
Solution:
The cost unit applicable to the Bicycle industry is per bicycle.
3
"Calculate the prime cost from the following information:
Direct material purchased: Rs. 1,00,000.
Direct material consumed: Rs. 90,000.
Direct labour: Rs. 60,000.
Direct expenses: Rs. 20,000.
Manufacturing overheads: Rs. 30,000."
Discuss
Answer & Solution
Answer: Option C
Solution:
Prime cost = Raw material consumed + Direct labour + Direct expenses = 90000 + 60000 + 20000 = Rs. 170000.
4
"Total cost of a product: Rs 10,000.
Profit: 25% on Selling Price
Profit is:"
Discuss
Answer & Solution
Answer: Option C
Solution:
Profit on C.P = 10000 × 25/100 = 2500
Profit on S.P = 2500/(10000-2500) × 10000 = Rs. 3,333.
5
Which of these is not a Material control technique:
Discuss
Answer & Solution
Answer: Option C
Solution:
Maintaining stores ledger is not a Material control technique. A stores ledger is a manual or computer record of the raw materials and production supplies stored in a production facility. It is maintained by the person responsible for these assets, such as the warehouse manager.
6
Out of the following, what is not the work of purchase department:
Discuss
Answer & Solution
Answer: Option D
Solution:
Accounting for material received is not the work of purchase department. Most major companies and even some government organizations have a purchasing or procurement department as part of everyday operations. These departments provide a service that is the backbone of many manufacturing, retail, military and other industrial organizations.
7
Bin Card is a?
Discuss
Answer & Solution
Answer: Option B
Solution:
Bin Card is a quantitative record of material received, issued and balance. A BIN Card is a table that records the status of a good held in stock.
8
Stores Ledger is a:
Discuss
Answer & Solution
Answer: Option A
Solution:
Stores Ledger is a quantitative as well as value wise records of material received, issued and balance. A stores ledger is a manual or computer record of the raw materials and production supplies stored in a production facility. It is maintained by the person responsible for these assets, such as the warehouse manager.
9
Re-order level is calculated as:
Discuss
Answer & Solution
Answer: Option A
Solution:
Re-order level is calculated as Maximum consumption x Maximum re-order period. To calculate the reorder level, multiply the average daily usage rate by the lead time in days for an inventory item.
10
Economic order quantity is that quantity at which cost of holding and carrying inventory is:
Discuss
Answer & Solution
Answer: Option B
Solution:
Economic order quantity is that quantity at which cost of holding and carrying inventory is minimum and equal. Economic order quantity (EOQ) is the ideal order quantity a company should purchase for its inventory given a set cost of production, a certain demand rate, and other variables. This is done to minimize inventory holding costs and order-related costs.