$47,000
$57,000
$87,000
$97,000
✅ The correct answer is C.
Flexible budget amount = Operating income + static budget
= $68000 + $19000 = $87,000
Flexible budget amount = Operating income + static budget
= $68000 + $19000 = $87,000
Costing
Costing MCQs with Answers and Explanations | Cost Accounting Objective Questions
Sharpen your understanding of Costing and Cost Accounting with our collection of MCQs with answers and detailed explanations. Covering key topics such as marginal costing, standard costing, process costing, job order costing, variance analysis, budgeting, cost control, and managerial decision-making, these objective questions are highly useful for students, teachers, and candidates preparing for professional and competitive exams (CA, ACCA, ICMA, MBA, CSS, PMS, NTS, FPSC, PPSC, UPSC, etc.). Each question includes a clear solution and explanation to strengthen concepts, improve problem-solving skills, and enhance exam preparation. Perfect for practice, self-assessment, and revision in the field of Cost Accounting.
172. If an allocated indirect cost is $1500 and actual incurred indirect cost is $1200, then this is classified as
applied indirect cost
applied direct cost
incurred indirect cost
over allocated indirect cost
✅ The correct answer is D.
If an allocated indirect cost is $1500 and actual incurred indirect cost is $1200, then this is classified as over allocated indirect cost because the allocated amount is less than actual amount.
If an allocated indirect cost is $1500 and actual incurred indirect cost is $1200, then this is classified as over allocated indirect cost because the allocated amount is less than actual amount.
173. Type of spoilage, which is considered as controllable and can be avoided is called
abnormal spoilage
normal spoilage
transferred-in spoilage
transferred-out spoilage
✅ The correct answer is A.
Type of spoilage, which is considered as controllable and can be avoided is called abnormal spoilage. Abnormal spoilage is the amount of waste or destruction of inventory beyond what is expected in normal business processes.
Type of spoilage, which is considered as controllable and can be avoided is called abnormal spoilage. Abnormal spoilage is the amount of waste or destruction of inventory beyond what is expected in normal business processes.
174. A cost unit is ________.
the cost per machine hour
the cost per labour hour
a unit of production or service in relation to which costs are ascertained
a measure of work output in a standard hour
✅ The correct answer is C.
A cost unit is a unit of production or service in relation to which costs are ascertained. A cost unit refers to the unit of quantity of product, service or time (or combination of these) in relation to which costs may be ascertained or expressed.
A cost unit is a unit of production or service in relation to which costs are ascertained. A cost unit refers to the unit of quantity of product, service or time (or combination of these) in relation to which costs may be ascertained or expressed.
175. An amount of spoilage that is not natural in a specific production process is categorized as
normal scrap
normal spoilage
abnormal spoilage
weighted spoilage
✅ The correct answer is C.
An amount of spoilage that is not natural in a specific production process is categorized as abnormal spoilage. Abnormal spoilage does not directly correspond to the number of units produced, and is considered an unexcepted surplus.
An amount of spoilage that is not natural in a specific production process is categorized as abnormal spoilage. Abnormal spoilage does not directly correspond to the number of units produced, and is considered an unexcepted surplus.
176. Budget which specifies an operating and financial plan, usually for a fiscal year or any specific period of time is classified as
annual budget
operating budget
specific budget
master budget
✅ The correct answer is D.
Budget which specifies an operating and financial plan, usually for a fiscal year or any specific period of time is classified as master budget. The master budget is the aggregation of all lower-level budgets produced by a company’s various functional areas, and also includes budgeted financial statements, a cash forecast, and a financing plan.
Budget which specifies an operating and financial plan, usually for a fiscal year or any specific period of time is classified as master budget. The master budget is the aggregation of all lower-level budgets produced by a company’s various functional areas, and also includes budgeted financial statements, a cash forecast, and a financing plan.
177. Line which uses to join observations with lower and highest values of cost driver is called
straight line
curved line
horizontal line
vertical line
✅ The correct answer is A.
Line which uses to join observations with lower and highest values of cost driver is called straight line.
Line which uses to join observations with lower and highest values of cost driver is called straight line.
178. In a given scenario, if cost is considered as indirect cost then independent variable will be considered as
demand allocation base
supply allocation base
cost allocation base
price allocation base
✅ The correct answer is C.
In a given scenario, if cost is considered as indirect cost then independent variable will be considered as cost allocation base. An allocation base is the basis upon which an entity allocates its overhead costs.
In a given scenario, if cost is considered as indirect cost then independent variable will be considered as cost allocation base. An allocation base is the basis upon which an entity allocates its overhead costs.
179. Fourth step in development of operating budget is to
choose alternatives
evaluate alternatives
efficiency improvements
predicted improvements
✅ The correct answer is A.
Fourth step in development of operating budget is to choose alternatives. An operating budget is a forecast of the revenues and expenses expected for one or more future periods.
Fourth step in development of operating budget is to choose alternatives. An operating budget is a forecast of the revenues and expenses expected for one or more future periods.
180. An estimation of relationship between one independent variable and dependent variable is known as
simple regression
Two way regression
One variable series
multiple regression
✅ The correct answer is A.
An estimation of relationship between one independent variable and dependent variable is known as simple regression. Simple linear regression is a statistical method that allows us to summarize and study relationships between two continuous (quantitative) variables.
An estimation of relationship between one independent variable and dependent variable is known as simple regression. Simple linear regression is a statistical method that allows us to summarize and study relationships between two continuous (quantitative) variables.