Cost Accounting Multiple Choice Questions

Cost Accounting Multiple Choice Questions ( MCQS) Page-5. 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

81. Selling price per unit is ` 15, total variable cost per unit is ` 9, and total fixed costs are  15,000 of XIT‖. What is the breakeven point in units for ―XIT‖? 

a. 3,000 units

b. 1,000 units

c. 1,667 units

d. 2,500 units

82. While constructing a Break even chart, the gap between sales line and variable cost line shows which of the following?

a. Fixed cost

b. Break even point

c. Contribution margin

d. Variable cost

83. All of the following compose cost of goods sold EXCEPT:

a. Raw material

b. Labor

c. Capital

d. Factory overhead

84. Amount of Depreciation on fixed assets will be fixed in nature if calculated under which of the following method?

a. Straight line method

b. Reducing balance method

c. Some of year's digits method

d. Double declining method

85. Which of the following is NOT a relevant cost to decision making?

a. Opportunity costs

b. Relevant benefits

c. Avoidable costs

d. Sunk costs

86. What would be the attitude of the management in treating Sunk costs in decision making?

a. A periodic investment of cash resources that has been made and should be relevant for

decision making

b. It is a past cost which is not directly relevant in decision making

c. Management will treat it as variable cost each time in decision making

d. None of the given options

87. Mr. Aslam is running his own personal Financial services business. He has been offered a job for a salary of ` 45,000 per month which he does not availed. ` 45,000 will be considered as:

a. Sunk Cost

b. Opportunity cost

c. Avoidable cost

d. Historical cost

88. Which of the given cost does not become the part of cost unit?

a. Advertising expenses

b. Direct labor cost

c. Factory overhead cost

d. Cost of raw material

89. Budgeted Factory overhead at two activity levels is as follows for the period. 

Activity level Budgeted factory overhead

Low 10,000 Hours ` 40,000

High 50,000 Hours ` 80,000

Required: Identify variable rate with the help of above mentioned data. 

a.  4.00 per hour

b.  1.60 per hour

c.  1.00 per hour

d.  2.00 per hour

90. Which of the given cost is NOT required to prepare Cost of Production Report? 

a. Period cost

b. Material cost

c. Labour cost

d. Factory overhead cost

91. Identify the FOH rate on the basis of machine hour?

a.  4.00

b.  4.08

c.  4.210

d.  4.35

92. Which of the given will NOT be included for the calculation of equivalent units of material under weighted average costing method?

a. Opening work in process units

b. Closing work in process units

c. Unit completed and transferred out

d. None of the given options

93. The basic assumption made in direct costing with respect to fixed costs is that

a. Fixed cost is a controllable cost

b. Fixed cost is a product cost

c. Fixed cost is an irrelevant cost

d. Fixed cost is a period cost

94. The little Rock Company shows Break even sales is ` 40, 500 and Budgeted Sales is ` 50,000. Identify the Margin of safety ratio?

a. 19%

b. 81%

c. 1.81%

d. Required more data to calculate

95. A machine cost ` 60,000 five years ago. It is expected that the machine will generate future revenue of 40,000. Alternatively, the machine could be scrapped for ` 35,000. An equivalent machine in the same condition cost 38,000 to buy now. 

Required: Identify the realizable value with the help of given data. 

a.  60,000

b.  40,000

c.  35, 000

d.  38,000

Budgeted production overheads `2,80,000

Actual machine hours 70,000 hours

Actual production overheads `2,95,000

96. Cost of finished goods inventory is calculated by:

a. Deducting total cost from finished goods inventory

b. Multiplying units of finished goods inventory with the cost per unit

c. Dividing units of finished goods inventory with the cost per unit

d. Multiplying total cost with finished goods inventory

97. Assuming no returns outwards or carriage inwards, the cost of goods sold will be equal to:

a. Opening stock Less purchases plus closing stock

b. Closing stock plus purchases plus opening stock

c. Sales less gross profit

d. Purchases plus closing stock plus opening stock plus direct labor

98. All of the following are essential requirements of a good wage system EXCEPT:

a. Reduced labor and overhead costs

b. Reduced per unit variable costs

c. Increased production

d. Increased operating costs

99. Profit under absorption costing will be higher than under marginal costing if :

a. Produced units > Units sold

b. Produced units < Units sold

c. Produced units = Units sold

d. Profit cannot be determined with given statement

100. Good Job Plc makes one product which sells for ` 80 per unit. Fixed costs are ` 28,000 per month and marginal costs are ` 42 per unit. What sales level in units will provide a profit of ` 10,000?

a. 350 units

b. 667 units

c. 1,000 units

d. 1,350 units

Answers:

81 d 82 c 83 c 84 a

85 d 86 b 87 b 88 a 89 c 90 a 91 a

92 d 93 d 94 a 95 c 96 b 97 c 98 d

99 a 100 c