Cost Accounting Quiz

Cost Accounting Multiple Choice Questions ( MCQS) Page-3. The following Cost Accounting Questions are Collected 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

41. If, Sales = ` 800,000 

Markup rate = 25% of cost 

What would be the value of Gross profit?

a.  200,000

b.  160,000

c.  480,000

d.  640,000

42. Which of the following is TRUE when piece rate system is used for wage determination?

a. Under this method of remuneration a worker is paid on the basis of time taken by him to

perform the work

b. Under this method of remuneration a worker is paid on the basis of production

c. The rate is expressed in terms of certain sum of money for total production

d. The rate is not expressed in terms of certain sum of money for total production

43. The salary of factory clerk is treated as:

a. Direct labor cost

b. Indirect labor cost

c. Conversion cost

d. Prime cost

44. Average consumption x Emergency time is a formula for the calculation of:

a. Lead time

b. Re-order level

c. Maximum consumption

d. Danger level

45. EOQ is a point where:

a. Ordering cost is equal to carrying cost

b. Ordering cost is higher than carrying cost

c. Ordering cost is lesser than the carrying cost

d. Total cost is maximum

46. A worker is paid ` 0.50 per unit and he produces 18 units in 7 hours. Keeping in view the piece rate system, the total wages of the worker would be: 

a. 18 x 0.50 = ` 9

b. 18 x 7 = ` 126

c. 7 x 0.5 = ` 3.5

d. 18 x 7 x 0.50 = ` 63

47. When closing stock is over valuate, what would its effect on profit?

a. Cannot determined with given statement

b. It will Increase the profit

c. It will decrease the profit

d. No effect on profit

48. A firm sells bags for ` 14 each. The variable cost for each unit is ` 8. What is the contribution margin per unit? 

a.  6

b.  12

c.  14

d.  8

49. Which of the following is NOT true? A small company's breakeven point: 

a. Occurs where its revenue equals its expenses

b. Shows entrepreneurs‘ minimum level of activity required to keep the company in operation

c. Is the point at which a company neither earns a profit nor incurs a loss

d. Total contribution margin equals total variable expenses

50. Keller Co. sells a single product for ` 28 per unit. If variable costs are 65% of sales and fixed costs total ` 9,800, the break-even point will be:

a. 15,077 units

b. 18,200 units

c. 539 units

d. 1,000 units

51. If B Limited shows required production of 120 cases of product for the month, direct labor per case is 3 hours at ` 12 per hour. Budgeted labor costs for the month should be: 

a.  1,360

b.  1,440

c.  4,320

d.  5,346

52. Which of the following is a process by which managers analyze options available to set courses of  action by the organization?

a. Heuristics method

b. Decision making

c. The Delphi technique

d. Systematic error

53. Which of the following is not true about differential costs?

a. It is a broader concept than variable cost as it takes into account additional fixed costs

caused by management decisions

b. With the passage of time and change in situation, differential costs will vary

c. The difference in cost between buying them from outside or make them in the company is

differential cost, irrelevant for decisions

d. They are extra or incremental costs caused by a particular decision

54. Which one of the following is the Traditional approach for costing?

a. Contribution approach

b. Absorption costing approach

c. Decision making approach

d. Marginal costing approach

55. What would be the margin of safety ratio based on the following information?

Sales price = ` 100 per unit

Variable cost = ` 25 per unit

Fixed cost = ` 50 per unit 

a. 25%

b. 33.333%

c. 66.666%

d. 75%

56. If:

Cost of opening finished goods ` 2,000

Cost of goods to be produced ` 6,000 

Operating expenses ` 1,000. 

Which of the following is the cost of goods available for sale? 

a.  8,000

b.  4,000

c.  7,000

d.  9,000

57. Ahmed Corporation has sales of ` 500,000 for the period. The selling expenses are estimated as 

12% of sales. The gross profit for the period is amounting to ` 150,000.

Calculate the amount of selling expenses for the period?

a.  60,000

b.  45,000

c.  90,000

d.  210,000

58. Which of the following would be considered to be an investment centre?

a. Managers have control over marketing

b. Managers have a sales team

c. Managers have a sales team and are given a credit control function

d. Managers can purchase capital assets and are given a credit control function

59. Which of the following would NOT lead to an increase in net cash flow?

a. Larger sales volume

b. Higher selling price

c. Reduced material cost

d. Charging of lower depreciation

60. All of the following are features of a relevant cost EXCEPT:

a. They affect the future cost

b. They cause an increment in cost

c. Relevant cost is a sunk cost

d. They affect the future cash flows

Answers

41 b 42 b 43 b 44 d 45 a 46 a 47 b 48 a 49 d

50 d 51 c 52 b 53 c 54 b 55 b 56 a

57 a 58 d 59 d 60 c