Cost Accounting and Control Multiple Choice Questions
1. Cost estimation include(s) the following expenditure(s)
a. pattern making
b. tool making
c. selling expenses
d. all of the above
2. To calculate the probable cost of the product, knowledge of following factors involves
a. Production time required
b. Use of previous estimates of comparable parts
c. Effect of change in facilities on costing rates
d. All of the above
3. Cost accounting is a specialized branch of accounting which deals with
a. classification, recording, allocation and control of costs
b. classification, processing, allocation and directing
c. classification, recording, planning and control of costs
d. classification, recording, allocation and directing
4. Expenditure incurred on material, labour, machinery, production and inspection are summed up to find the
a. Total cost of product
b. Selling price of product
c. Factory cost of product
d. None of the above
5. Which of the following calculate the actual cost of product
a. Cost estimation
b. Costing
c. Both a. and (B)
d. None of the above
6. The cost data provide invaluable information for taking the following managerial decision(s)
a. To make or buy
b. To own or hire fixed asset
c. Determining the expansion or contraction policy
d. All of the above
7. Match the following
Type of costing Type of industry
a. Job costing 1. Utility services
b. Process costing 2. Automobile industry
c. Departmental costing 3. ship building
d. Operating costing 4. paper making
The correct answer is
(A). a. 2, b. 3, c. 1, d. 4
(B). a. 3, b. 4, c. 2, d. 1
(C). a. 4, b. 2, c. 1, d. 3
(D). a. 3, b. 2, c. 1, d. 4
8. The method of unit costing is adopted by
a. Transport services
b. Steel industry
c. Mines
d. Bicycle industry
9. ____ costing is a type of job costing.
a. Multiple
b. Operating
c. Unit
d. Batch
10. The following is cost of direct materials
a. Freight charges
b. grease
c. coolant
d. cotton waste
11. The following is cost of indirect materials
a. Lubricating oil
b. Octroi
c. Import duties
d. Insurance
12. The payment made to the following is cost of direct labour.
a. Machinist
b. Supervisor
c. Inspector
d. Sweeper
13. The payment made to the following is cost of indirect labour.
a. Time keeper
b. Welder
c. Moulder
d. Turner
14. Cost of preparing drawings for the manufacture of a particular product is
a. Cost of direct labour
b. Cost of indirect labour
c. Direct expenses
d. Indirect expenses
15. The following is also known as overhead costs or on costs.
a. Cost of direct labour
b. Cost of indirect labour
c. Direct expenses
d. Indirect expenses
16. The following is(are) the overhead cost(s)
a. Factory expenses
b. Selling expenses
c. Distribution expenses
d. All of the above
17. All such expenses which are incurred for creating and enhancing the demands for the products are
a. Selling expenses
b. Administrative expenses
c. Distribution expenses
d. All of the above
18. Prime cost=
a. cost of direct labour + cost of direct material + direct expenses
b. cost of indirect labour + cost of indirect material + direct expenses
c. cost of direct labour + cost of direct material + indirect expenses
d. cost of indirect labour + cost of direct material + indirect expenses
19. Factory Cost =
a. Prime cost + factory expenses
b. Prime cost + administrative expenses
c. Prime cost + selling expenses
d. Prime cost + distribution expenses
20. Manufacturing cost=
a. Factory cost + selling cost
b. Factory cost + distribution cost
c. Factory cost + administrative expenses
d. None of the above
21. The following is(are) the method(s) to increase profit
a. Increase the sales price
b. Increase the market
c. Reduce total cost
d. All of the above
22. Which of the following is variable cost?
a. Salaries of higher officers
b. Prime cost
c. Insurance cost
d. Repair cost
23. Which of the following is not a method of calculating (allocating) overhead cost?
a. Percentage on prime cost
b. Percentage on direct labour cost
c. Percentage on indirect labour cost
d. Percentage on direct material cost
24. The following method is an improvement over the percentage on direct labour cost method.
a. Machine hour rate
b. Percentage on prime cost
c. Percentage on direct material cost
d. Man hour rate
25. This method is useful where the products are manufactured by manual operations.
a. Percentage on prime cost
b. Percentage on direct material cost
c. Percentage on direct labour cost
d. Machine hour rate
26. The overhead cost for a particular job =
a. man hour rate x man hours spent on that job
b. man hour rate / man hours spent on that job
c. man hour rate + man hours spent on that job
d. man hour rate – man hours spent on that jab
27. Labour cost per product is Rs. 2/hr and time taken by each product is 2 hr. The factory overhead is 20% of the labour costs. The factory cost for 100 products if material cost per product is Rs. 3, is.
a. Rs. 700
b. Rs. 740
c. Rs. 780
d. Rs. 820
28. The following is (are) true for variable costs
a. Variable costs are the functions of output
b. Variable costs vary directly with the quantity produced
c. These become zero when the production is suspended
d. All of the above
29. The following cost helps in taking ‘make or buy’ decision.
a. Standard cost
b. Marginal cost
c. Differential cost
d. Sunk cost
30. To control costs it is essential to keep control on
a. Prime cost
b. Overheads
c. Indirect materials and tools cost
d. All of the above