Cost Accounting Mcqs

Cost Accounting Multiple Choice Questions ( MCQS) Page-2. The following Cost Accounting Questions from different Past Papers etc, PPSC Past Papers, Fpsc Pass Papers, NTS and also from MCQS Bank. These Questions are helpful for the preparation of Written test for the Posts of Accountant, Cost Accountant, Auditor and any for any Accounts Related Jobs Tests.

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Multiple Choice Questions on Cost Accounting

21. Horizon Ltd. Manufactures product BM for last 5 years. The company maintains a margin of safety of 37.5% with overall contribution to sales ratio of 40%. If the fixed cost is ` 5 lakh, the profit of the company is

a.  24.00 laks

b.  12.50 lakh

c.  3.00 lakh

d. None of A, B, C

22. The cost-volume-profit relationship of a company is described by the equation y = ` 8,00,000 + 0.60x, in which x represents sales revenue and y is the total cost at the sales volume represented by x. If the company desires to earn a profit of 20% on sales, the required sales will be.

a.  40,00,000

b.  35,50,000

c.  24,00,000

d.  20,00,000

23. ABC Ltd. is having 400 workers at the beginning of the year and 500 workers at the end of the year. During the year 20 workers were discharged and 15 workers left the organization. During the year the company has recruited 65 workers. Of these, 18 workers were recruited in the vacancies of those leaving, while the rest were engaged for an expansion scheme. The labour turnover rate under separation method is :

a. 22.20%

b. 7.78%

c. 4.00%

d. 14.40%

24. One of the most important tools in cost planning is:

a. Direct cost

b. Cost Sheet

c. Budget

d. Marginal Costing.

25. Economies and diseconomies of scale explain why the: 

a. Short-run average fixed cost curve declines so long as output increases.

b. Marginal cost curve must intersect the minimum point of the firm's average total cost curve.

c. Long-run average total cost curve is typically U-shaped.

d. Short-run average variable cost curve is U-shaped.

26. Which of the following is not a relevant cost?

a. Replacement cost

b. Sunk cost

c. Marginal cost

d. Standard cost.

27. Which of the following is an accounting record?

a. Bill of Material

b. Bin Card

c. Stores Ledger.

d. All of these.

28. The fixed-variable cost classification has a special significance in preparation of :

a. Flexible Budget

b. Master Budget

c. Cash Budget

d. Capital Budget

29. Input in a process is 4000 units and normal loss is 20%. When finished output in the process is only 3240 units, there is an :

a. Abnormal loss of 40 units

b. Abnormal gain of 40 units

c. Neither abnormal loss nor gain.

d. Abnormal loss of 60 units.

30. Idle capacity of a plant is the difference between:

a. Maximum capacity and practical capacity

b. Practical capacity and normal capacity

c. Practical capacity and capacity based on sales expectancy

d. Maximum capacity and actual capacity.

31. When P/V ratio is 40% and sales value is `10,000, the variable cost will be 

a.  4000

b.  6000

c.  10000

d. Variable Cost cannot be calculated from data given.

32. The forex component of imported material cost is converted 

a. At the rate on the date of settlement

b. At the rate on the date of transaction

c. At the rate on date of delivery

d. None of the above.

33. Maximum possible productive capacity of a plant when no operating time is lost , is its

a. Practical capacity

b. Theoretical capacity

c. Normal capacity

d. Capacity based on sales expectancy

34. When production is below standard specification or quality and cannot be rectified by incurring 

additional cost, it is called

a. Defective

b. Spoilage

c. Waste

d. Scrap

35. CAS 8 requires each type of utility to be treated as 

a. Separate cost object

b. Not part of cost as not include in material

c. Not part of cost as they do not form part of product

d. Treated as administrative overheads.

36. Selling and distribution overhead does not include:

a. Cost of warehousing

b. Repacking cost

c. Transportation cost

d. Demurrage charges.

37. When overtime is required for meeting urgent orders, overtime premium should be

a. Charged to Costing Profit and Loss A/c

b. Charged to overhead costs

c. Charged to respective jobs

d. None of the above.

38. Exchange losses or gains after purchase transaction is complete is treated as 

a. Product cost.

b. Overhead cost.

c. Purchase cost.

d. Finance cost

39. Selling price per unit ` 15.00; Direct Materials cost per unit ` 3.50; Direct Labour cost per unit ` 4.00 Variable Overhead per unit ` 2.00; Budgeted fixed production overhead costs are ` 60,000 per annum charged evenly across each month of the year. Budgeted production costs are 30,000 units per annum. What is the Net profit per unit under Absorption costing method. 

a.  9.50

b.  15.00

c.  11.50

d.  3.50

40. Which of the following cost is linked with the calculation of cost of inventories?

a. Product cost

b. Period cost

c. Both product and period cost

d. Historical cost

Answers

21 c 22 a 23 b 24 c 25 c 26 b 27 c 28 a

29 b 30 d 31 b 32 b 33 c 34 b 35 a

36 d 37 c 38 d 39 d 40 a