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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-7

Each section contains 100 MCQs on Costing .
1
If budget sales units are 8000, ending inventory is 2000 units and beginning inventory is 3000, then budget production would be
Discuss
Answer & Solution
Answer: Option D
Solution:
Budget production = Budget sales + Ending inventory - Beginning inventory
= 8000 + 2000 - 3000 = 7000 units.
2
Cash sales, accounts receivables and rental receipts all are known as
Discuss
Answer & Solution
Answer: Option A
Solution:
Cash sales, accounts receivables and rental receipts all are known as cash receipts. A cash receipt is a printed statement of the amount of cash received in a cash sale transaction.
3
Centers such as revenue, cost, investment and profit all are known as
Discuss
Answer & Solution
Answer: Option C
Solution:
Centers such as revenue, cost, investment and profit all are known as responsibility center. A responsibility center is a functional entity within a business that has its own goals and objectives, dedicated staff, policies and procedures, and financial reports.
4
Method which ranks cost object incurred by individual users, in ranking order of more responsible users is classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
Method which ranks cost object incurred by individual users, in ranking order of more responsible users is classified as incremental cost allocation method. Cost allocation methods are designed to allocate costs not necessarily associated with a product, to the appropriate products to get a realistic estimate of costs so that a proper price can be determined for a particular product.
5
First ranked product, in incremental revenue allocation method, is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
First ranked product, in incremental revenue allocation method, is classified as primary product. Primary products are goods that are available from cultivating raw materials without a manufacturing process.
6
Products, divisions and customers are examples of
Discuss
Answer & Solution
Answer: Option D
Solution:
Products, divisions and customers are examples of revenue object. A revenue object document is used as the basis for revenue recognition and partner settlement.
7
In incremental cost allocation method, cost object user who is ranked third in ranking order is classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
In incremental cost allocation method, cost object user who is ranked third in ranking order is classified as second incremental user.
8
Cost of operating activity, facility or any cost object which usually shares by two or more than two users is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Cost of operating activity, facility or any cost object which usually shares by two or more than two users is classified as common cost. A common cost is a cost that is not attributable to a specific cost object, such as a product or process.
9
cost object user, who is ranked first in incremental cost allocation method is known as
Discuss
Answer & Solution
Answer: Option B
Solution:
cost object user, who is ranked first in incremental cost allocation method is known as primary user. The term primary user describes someone who interacts with a system. The primary user is in direct contact with the system interface and thus is usually most affected by it.
10
Costs, which consist of interdepartmental cost allocations plus cost of support department are classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Costs, which consist of interdepartmental cost allocations plus cost of support department are classified as complete reciprocal costs. The allocation of service department costs is incomplete if the method used for cost allocation ignores or does not give full recognition to interdepartmental services.