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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-8

Each section contains 100 MCQs on Costing .
1
In a joint process of production, product which yields low volume of sales as compared to total sales of other products is known as
Discuss
Answer & Solution
Answer: Option D
Solution:
In a joint process of production, product which yields low volume of sales as compared to total sales of other products is known as by-product.
2
Difference between final sales value and separable costs is equal to
Discuss
Answer & Solution
Answer: Option B
Solution:
Difference between final sales value and separable costs is equal to net realizable value. The net realizable value method allocates joint costs on the basis of the final sales value less separable costs.
3
As compared to sale value of main products, by-products have
Discuss
Answer & Solution
Answer: Option A
Solution:
As compared to sale value of main products, by-products have low sale value. When the process of making one thing results in a second product as well, that second thing is called a byproduct.
4
If final sales are $50000 and separable costs are $35000, then net realizable value will be
Discuss
Answer & Solution
Answer: Option A
Solution:
If final sales are $50000 and separable costs are $35000, then net realizable value will be $15,000.
Net realizable value = Final Sales - Seperable Cost.
= $50000 - $35000 = $15000.
5
Joint cost allocation method, in which individual product from joint products must gain a gross margin percentage is classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
Joint cost allocation method, in which individual product from joint products must gain a gross margin percentage is classified as constant gross margin percentage NRV method. Joint cost is the manufacturing cost incurred on a joint production process which takes common inputs but simultaneously produces multiple products called joint-products.
6
Manufacturing, distribution and marketing costs incur after split off point is classified under
Discuss
Answer & Solution
Answer: Option A
Solution:
Manufacturing, distribution and marketing costs incur after split off point is classified under separable costs. Separable costs are any costs incurred after the split-off point in a production process that can be assigned to specific products.
7
Method which allocates joint costs of joint products, considering physical measures such as volume or relative weight at point of split off is known as
Discuss
Answer & Solution
Answer: Option C
Solution:
Method which allocates joint costs of joint products, considering physical measures such as volume or relative weight at point of split off is known as physical-measure method. The physical measure method allocates cost by the weight, volume, or some other measurement of the product that's produced.
8
If value of final sales is $48000 and net realizable value is $35000, then value of sales costs would be
Discuss
Answer & Solution
Answer: Option B
Solution:
If value of final sales is $48000 and net realizable value is $35000, then value of sales costs would be $13,000.
Sales Cost = Final Sales - Net Realizable Value.
= $48000 - $35000 = $13000.
9
Second step, in constant gross margin percentage NRV method, to allocate joint cost is to compute
Discuss
Answer & Solution
Answer: Option D
Solution:
Second step, in constant gross margin percentage NRV method, to allocate joint cost is to compute total production cost of each product.
10
In a joint process of production, a product which yields high volume of sales as compared to total sales volume of other products is known as
Discuss
Answer & Solution
Answer: Option C
Solution:
In a joint process of production, a product which yields high volume of sales as compared to total sales volume of other products is known as main product. A main product is a joint output that generates a significant portion of the net realizable value within a joint production process.