Cost Account
M.Com Part ( I & II ) and T.Y.B.Com
Very Importance MCQ
Q.1 A functional classification of costs would
classify "depreciation on office equipment" as a
A. Product cost
B. Administrative expense
C. Selling expense
D. Variable cost
ANS: D
Q.2. A particular cost is classified as being semi-variable. What is the effect on the TOTAL COST if activity increases by 20%?
A. Stays the same
B. Decreases by less than 20%
C. Increases by 20%
D. Increases by less than 20%
ANS: C
Q.3 The functional classification of costs include the following except
(a) Prime cost
(b) Production cost
(c) Administration cost
(d) Marketing cost
ANS: B
Q.4. Process of ascertainment of costs is known as
A. Costing
B. Cost reporting
C. Cost control
D. None of the above
ANS: A
Q.5.. Cost information facilitates many important decisions except
A. Introduction of a product
B. Whether to make or buy
C. Rate of dividend
D. Exploration of an additional market
ANS: A
Q.6.An example of fixed cost is
A. Materials consumed
B. Depreciation
C. Factory power
D. Packing material
ANS: B
Q.7. Variable cost per unit
A. Varies when output varies
B. Remains constant
C. Increases when output increases
D. Decreasases when output decreases
ANS: B
Q.8. Which of the following is considered to be a normal loss of material?
A. Loss due to accidents
B. Pilferage
C. Loss due to careless handling of material
D. Loss due to breaking the bulk
ANS: D
Q.9.Bin card is maintained by the
A. Accounts department
B. Costing department
C. Stores
D. None of the above
ANS: C
Q.10 Which of the.following documents is used for issuing materials to production departments ?
A. Purchase Requisition Note
B. Stores requisition Note
C. Goods Received Note
D. Stores Credit Note
ANS: A
Q.11. Labour turnover is
A. productivity of labour
B. Efficiency of the labour
C. change in labour force
D. total cost of the labour
ANS: C
Q.12. Bonus under halsey plan is paid
(a) At 50% of time saved
(b) At 75% of time saved
(c) At 80% of time saved
(d) At 90% of time saved
ANS: A
Q.13. Merricks multiple piece rate system has
(a) Two rates
(b) Three rates
(c) Four rates
(d) Five rates
ANS: B
Q.14. bad debt is an exampleof
(a) production overhead
(b) administration overhead
(c) selling overhead
(d) Distributin overhead
ANS: C
Q.15. Packing cost is a
(a) Production cost
(b) Selling cost
(c) Distribution cost
(d) It may be any of the above
ANS: C
Q.16. A typical factory overhead cost is
(a) Distribution
(b) Internal audit
(c) Compensation of plant manger
(d) design
ANS: C
Q.17. Cost of production – administrstion overheads=
(a) Prime cost
(b) Cost of sales
(c) Work cost
(d) Work-in-progress
ANS: A
Q.18 Which of the following items is not included in preparation of a cost sheet
(a) Carried inward
(b) Purchase returns
(c) Sales commission
(d) Interest paid
ANS: D
Q.19 Total cost – selling and distrubtion overheads =
(a) Cost of goods sold
(b) Closing stock
(c) Cost of prodution
(d) Net profit
ANS: D
Q.20.What is prime cost
(a) Total diret costs only
(b) Total indiret costs only
(c) Total non-production costs
(d) Total production costs
ANS: A
Q.21. Salary of a foreman should be classified as a
(a) Fixed overhead
(b) Variable overhead
(c) Semifixed or semi-varible overhead
(d) none of above
ANS: C
Q.22. Overheads expenses can be classified according to
(a) Function
(b) Elements
(c) Behavior
(d) All of the above
ANS: D
Q.23. Overtime premium is paid
(a) At normal rate
(b) Below the normal rate
(c) At 50% of the normal rate
(d) At double normal rate
ANS: D
Q.24. For calculation of labour turnover under separation method
(a) only the number of employees left from the organisation is considered
(b) only the number of employees replaced are considered
(c) only the number of employees retrenched are considered
(d) only the number of employees who are new to the organisation is considered
ANS: B
Q.25. Perpetual inventory system involves
a. Bin card and Stores ledger
b. Bill of material and Material req
c. Purchase requisition and purchase order
d. Inward and Outward invoices
ANS: A
A. Product cost
B. Administrative expense
C. Selling expense
D. Variable cost
ANS: D
Q.2. A particular cost is classified as being semi-variable. What is the effect on the TOTAL COST if activity increases by 20%?
A. Stays the same
B. Decreases by less than 20%
C. Increases by 20%
D. Increases by less than 20%
ANS: C
Q.3 The functional classification of costs include the following except
(a) Prime cost
(b) Production cost
(c) Administration cost
(d) Marketing cost
ANS: B
Q.4. Process of ascertainment of costs is known as
A. Costing
B. Cost reporting
C. Cost control
D. None of the above
ANS: A
Q.5.. Cost information facilitates many important decisions except
A. Introduction of a product
B. Whether to make or buy
C. Rate of dividend
D. Exploration of an additional market
ANS: A
Q.6.An example of fixed cost is
A. Materials consumed
B. Depreciation
C. Factory power
D. Packing material
ANS: B
Q.7. Variable cost per unit
A. Varies when output varies
B. Remains constant
C. Increases when output increases
D. Decreasases when output decreases
ANS: B
Q.8. Which of the following is considered to be a normal loss of material?
A. Loss due to accidents
B. Pilferage
C. Loss due to careless handling of material
D. Loss due to breaking the bulk
ANS: D
Q.9.Bin card is maintained by the
A. Accounts department
B. Costing department
C. Stores
D. None of the above
ANS: C
Q.10 Which of the.following documents is used for issuing materials to production departments ?
A. Purchase Requisition Note
B. Stores requisition Note
C. Goods Received Note
D. Stores Credit Note
ANS: A
Q.11. Labour turnover is
A. productivity of labour
B. Efficiency of the labour
C. change in labour force
D. total cost of the labour
ANS: C
Q.12. Bonus under halsey plan is paid
(a) At 50% of time saved
(b) At 75% of time saved
(c) At 80% of time saved
(d) At 90% of time saved
ANS: A
Q.13. Merricks multiple piece rate system has
(a) Two rates
(b) Three rates
(c) Four rates
(d) Five rates
ANS: B
Q.14. bad debt is an exampleof
(a) production overhead
(b) administration overhead
(c) selling overhead
(d) Distributin overhead
ANS: C
Q.15. Packing cost is a
(a) Production cost
(b) Selling cost
(c) Distribution cost
(d) It may be any of the above
ANS: C
Q.16. A typical factory overhead cost is
(a) Distribution
(b) Internal audit
(c) Compensation of plant manger
(d) design
ANS: C
Q.17. Cost of production – administrstion overheads=
(a) Prime cost
(b) Cost of sales
(c) Work cost
(d) Work-in-progress
ANS: A
Q.18 Which of the following items is not included in preparation of a cost sheet
(a) Carried inward
(b) Purchase returns
(c) Sales commission
(d) Interest paid
ANS: D
Q.19 Total cost – selling and distrubtion overheads =
(a) Cost of goods sold
(b) Closing stock
(c) Cost of prodution
(d) Net profit
ANS: D
Q.20.What is prime cost
(a) Total diret costs only
(b) Total indiret costs only
(c) Total non-production costs
(d) Total production costs
ANS: A
Q.21. Salary of a foreman should be classified as a
(a) Fixed overhead
(b) Variable overhead
(c) Semifixed or semi-varible overhead
(d) none of above
ANS: C
Q.22. Overheads expenses can be classified according to
(a) Function
(b) Elements
(c) Behavior
(d) All of the above
ANS: D
Q.23. Overtime premium is paid
(a) At normal rate
(b) Below the normal rate
(c) At 50% of the normal rate
(d) At double normal rate
ANS: D
Q.24. For calculation of labour turnover under separation method
(a) only the number of employees left from the organisation is considered
(b) only the number of employees replaced are considered
(c) only the number of employees retrenched are considered
(d) only the number of employees who are new to the organisation is considered
ANS: B
Q.25. Perpetual inventory system involves
a. Bin card and Stores ledger
b. Bill of material and Material req
c. Purchase requisition and purchase order
d. Inward and Outward invoices
ANS: A
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