Cost Accounting Mcqs PDF
Cost Accounting Mcqs PDF
Cost Accounting Mcqs PDF
4. Imputed cost is a .
A. notional cost.
B. real cost.
C. normal cost.
D. variable
cost.
ANSWER: A
10. Multiple costing is a technique of using two or more costing methods for ascertainment of cost by.
A. the same firm.
B. the several firms.
C. the same industry.
D. the several industries.
ANSWER: A
11. Wages paid to a labour who was engaged in production activities can be termed as.
A. direct cost.
B. indirect cost.
C. sunk cost.
D. imputed cost.
ANSWER: A
12. The cost which is to be incurred even when a business unit is closed is a.
A. imputed cost.
B. historical cost.
C. sunk cost.
D. shutdown cost.
ANSWER: D
B. factory cost.
C. labour cost.
D. cost of goods sold.
ANSWER: B
19. Which one of the following is not considered for preparation of cost sheet?
A. Factory cost.
B. Goodwill written off.
C. Selling cost.
D. Labour
cost.
ANSWER: B
A. factory overhead.
B. selling overhead.
C. distribution overhead.
D. administration
overhead. ANSWER: A
C. distribution overhead.
D. administration
overhead. ANSWER: D
31. The ratios which reflect managerial efficiency in handling the assets is.
A. turnover ratios
B. profitability ratios.
C. short term solvency ratio.
D. long term solvency
ratio. ANSWER: A
32. The ratios which reveal the final result of the managerial policies and performance is .
A. turnover ratios.
B. profitability ratios.
C. short term solvency ratio.
D. long term solvency
ratio. ANSWER: B
45. The ratio which is calculated to measure the productivity of total assets is
A. return on equity.
B. return on share holders funds.
C. return on total assets.
D. return on equity share holders’ funds.
ANSWER: C
46. The ratio which shows the proportion of profits retained in the business out of the current year’s profits
is
A. . retained earnings ratio.
B. pay out ratio
C. earnings per share.
D. price earnings
ratio.
ANSWER: A
47. The ratio which indicates earnings per share reflected by the market price is .
A. retained earnings ratio.
B. pay out ratio.
C. earnings per share.
D. price earnings
ratio.
ANSWER: D
48. The ratio establishes the relationship between profit before interest and tax and fixed interest charges
is .
A. interest cover ratio.
B. fixed dividend cover ratio.
C. debt service coverage ratio.
D. dividend yield ratio.
ANSWER: A
49. The ratio shows the preference dividend as a proportion of profit available for shareholders is
.
A. interest cover ratio.
B. fixed dividend cover ratio.
C. debt service coverage ratio.
D. dividend yield ratio.
ANSWER: B
53. Which ratio is calculated to ascertain the efficiency of inventory management in terms of capital
investment?
A. stock velocity ratio.
B. debtors velocity ratio.
C. creditors velocity ratio.
D. working capital turnover ratio.
ANSWER: A
54. The ratio which measures the relationship between the cost of goods sold and the amount of average
inventory is
A. stock turnover ratio.
B. debtors velocity ratio.
C. creditors velocity ratio.
D. working capital turnover ratio.
ANSWER: A
57. Which ratio measures the number of times the receivables are rotated in a year in terms of sales?
A. stock turnover ratio.
B. debtors turnover ratio.
C. creditors velocity ratio.
D. working capital turnover ratio.
ANSWER: B
ANSWER: B
62. All those assets which are converted into cash in the normal course of business within one year are
known as .
A. fixed assets.
B. current assets.
C. fictitious assets.
D. wasting assets.
ANSWER: B
63. All those liabilities which are payable in cash in the normal course of business within a period of one
year are called _.
A. long term liabilities.
B. overdraft.
C. short term loans.
D. current liabilities.
ANSWER: D
64. Any transaction between a current account and another current account does not
Affect .
A. profit.
B. funds.
C. working capital.
D. capital.
ANSWER: B
65. Any transaction between a non current account and another non current account does not
affect .
A. profit.
B. funds.
C. working capital.
D. capital.
ANSWER: B
66. Principle’ for preparation of working capital statement -Increase in current asset .
A. increases working capital.
B. decreases working capital.
C. decrease fixed capital.
D. increase fixed capital.
ANSWER: A
67. Principle’ for preparation of working capital statement - Decrease in current asset .
A. increases working capital.
B. decreases working capital.
C. decrease fixed capital.
D. increase fixed capital.
ANSWER: B
68. Principle’ for preparation of working capital statement -Increase in current liability .
A. increases working capital.
B. decreases working capital.
C. decrease fixed capital.
D. increase fixed capital.
ANSWER: B
69. Principle’ for preparation of working capital statement -Decrease in current Liability .
A. increases working capital.
B. decreases working capital.
C. decrease fixed capital
D. increase fixed capital.
ANSWER: A
85. 1f` fixed costs decrease while variable cost per unit remains constant, the new B.E.P in relation to the
old B.E.P will be .
A. lower .
B. higher.
C. . unchanged .
D. indeterminate.
ANSWER: B
86. If fixed costs decrease while the variable cost per unit remains constant, the new contribution margin in
relation to the old contribution margin will be .
A. lower .
B. unchanged .
C. higher.
D. indeterminate.
ANSWER: B
87. Selling price per unit Rs. 10; Variable cost Rs. 8 per unit; Fixed cost Rs. 20,000; Break-even
production in units .
A. 10,000.
B. 16,300.
C. 2,000.
D. 2,500.
ANSWER: D
88. Sales Rs. 25,000; Variable cost Rs. 8,000; Fixed cost Rs. 5,000; Break-even sales
in value .
A. Rs. 7,936.
B. Rs. 7,353.
C. Rs. 8,333.
D. Rs. 9,090.
ANSWER: B
89. Fixed cost Rs. 80,000; Variable cost Rs. 2 per unit; Selling price_Rs. 10 per unit; turnover required for
a profit target of Rs. 60,000.
A. Rs. 1,75,000.
B. Rs. 1,17,400.
C. Rs. 1.57,000.
D. Rs. 1,86,667.
ANSWER: A
90. Sales Rs. 25,000; Variable cost Rs. 15,000; Fixed cost Rs .4,000; P/V Ratio is .
A. 40% .
B. 80%
C. 15%
D. 30%.
ANSWER: A
91. Sales Rs. 50,000; Variable cost Rs. 30,000; Net profit Rs. 6,000; fixed cost is .
A. Rs. 10,000.
B. b. Rs. l4,000 .
C. Rs. 12,000.
D. Rs. 8,000.
ANSWER: B
92. Actual sales Rs .4,00,000; Break-even sales Rs. 2,50,000; Margin of Safety in
percentage is _.
A. 33.33%.
B. 66.67%
C. 37.5% .
D. 76.33%.
ANSWER: C
93. P/V Ratio 50%; Variable cost of the produce Rs. 25; Selling price is .
A. Rs. 50 .
B. Rs. 40.
C. Rs. 30 .
D. Rs. 55.
ANSWER: A
94. Fixed cost Rs. 2,00,000; Sales Rs. 8,00,000; P/V Ratio 30%; the amount of' profit is .
A. Rs. 50,000.
B. Rs. 40,000 .
C. Rs. 35,000 .
D. Rs. 45,000 .
ANSWER: B
95. P/V Ratio is 25% and Margin of Safety is Rs; 3,00,000, the amount of profit is .
A. Rs. 1,00,000.
B. Rs. 80,000.
C. Rs. 75,000.
D. . Rs. 60,000.
ANSWER: C
96. Total sales Rs. 20,00,000; Fixed expenses Rs. 4,00,000; P/V Ratio 40%; Break-even capacity
in percentage is .
A. 40% .
B. 60% .
C. 50% .
D. 45%.
ANSWER: C
97. Break - even point occurs at 40% of` total capacity, margin of safety will be .
A. 40% .
B. 60% .
C. 80% .
D. 85% .
ANSWER: B
98. If the P/V Ratio of a product is 30% and selling price is Rs. 25 per unit, the marginal cost of the
product would be .
A. Rs.18.75 .
B. Rs.16 .
C. Rs. 15 .
D. Rs.20 .
ANSWER: A
104. The budget which usually takes the form of budgeted profit and loss account and balance sheet is
known as
A. Flexible budget .
B. Master budget.
C. Cash budget .
D. Purchase budget.
ANSWER: B
108. Preparing budget figures for different levels of activity within a range under flexible budgeting is
.
A. Formula method.
B. Multi-activity method.
C. Budget cost allowance method.
D. Proportionate method.
ANSWER: B
109. What type of budget is designed to take into account forecast change in costs, prices, etc?
A. Master budget.
B. Rolling budget.
C. Flexible budget .
D. Functional
budget.
ANSWER: B
114. Budget designed to remain constant irrespective of the level of activity attained
is called .
A. Fixed budget.
B. Flexible budget.
C. Sales budget.
D. Production
budget ANSWER: A
118. Material budget consists of two parts, one is the consumption budget and another Is .
A. Material purchase budget.
B. Material sales budget.
C. Material production budget.
D. Material
budget.
ANSWER: A
122. Budget of indirect costs in the form of indirect wages, indirect material and indirect expenses in the
factory is .
A. Production overhead budget.
B. Administration overhead budget.
C. Selling and distribution overhead budget.
D. Master budget.
ANSWER: A
123. The budget prepared to estimate the expenditure to be incurred for planning, organizing, direction and
control function of the management is .
A. . Production overhead budget.
B. Administration overhead budget.
C. Selling and distribution overhead budget.
D. Master budget.
ANSWER: B
124. The budget prepared to estimate expenditure to be incurred to sell the product and its distribution is
.
A. Production overhead budget.
B. Administration overhead budget.
C. Selling and distribution overhead budget.
D. Master
budget ANSWER:
C
125. The budget prepared to estimate the research and development expenditure to be incurred during
a specific period is .
A. Production overhead budget.
B. Administration overhead budget.
C. Selling and distribution overhead budget.
D. Research and development budget.
ANSWER: D
126. The budget prepared to estimate the expenditure on fixed assets is known as.
A. Capital expenditure budget
B. Production overhead budget.
C. Administration overhead budget.
D. Selling and distribution overhead
budget. ANSWER: A
127. The budget prepared for replacement of assets, expansion of production facilities, adoption of new
technologies etc. is .
A. Capital expenditure budget.
B. Production overhead budget.
C. Administration overhead budget.
D. Selling and distribution overhead
budget. ANSWER: A
20
C. Job In Time.
D. Job Inventory Time.
ANSWER: A
134. FIFO is .
A. Fast Investment in Future Order.
B. First In First Out.
C. Fast In Fast Out
D. Fast Issue Of Fast Order.
ANSWER: D
137. Scrap is .
A. residue of material.
B. wastage of material.
C. surplus material.
D. abnormal loss of material.
ANSWER: A
138. Material is issued by store keeper against.
A. material requisition.
B. material order.
C. goods received note.
D. purchase requisition.
ANSWER: A
140. The document which is prepared after receiving and inspecting material .
A. material record note.
B. goods received note.
C. bill of material.
D. inventory record.
ANSWER: B
146. Material consumed is Rs. 5,00,000 Opening stock of raw material is Rs. 50,000 and Closing stock of
raw material is Rs. 25,000. What is the cost of raw material purchased?
A. Rs. 4,50,000.
B. Rs. 4,75,000.
C. Rs. 5,25,000.
D. Rs. 5, 50,000.
ANSWER: B
147. If selling price is Rs. 25,000 and profit is Rs. 5,000 then what is the percentage of profit on
cast?
A. 20%.
B. 25%.
C. 33.33%.
D. 35%.
ANSWER: B