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.

183. “Calculate the prime cost from the following information: Direct material purchased: Rs. 1,00,000. Direct material consumed: Rs. 90,000. Direct labour: Rs. 60,000. Direct expenses: Rs. 20,000. Manufacturing overheads: Rs. 30,000.”

by
Rs. 1,80,000
Rs. 2,00,000
Rs. 1,70,000
Rs. 2,10,000
✅ The correct answer is C.
Prime cost = Raw material consumed + Direct labour + Direct expenses = 90000 + 60000 + 20000 = Rs. 170000.

187. Partial or completed units of manufactured goods, that do not meet customer specifications and get sold at reduced price or simply discarded, are called

by
spoilage
rework
scrap
equivalence
✅ The correct answer is A.
Partial or completed units of manufactured goods, that do not meet customer specifications and get sold at reduced price or simply discarded, are called spoilage. Spoilage is waste or scrap that occurs during the manufacturing process.

188. Flexible budget amount is added to flexible budget variance to calculate

by
static result
actual result
secondary result
primary result
✅ The correct answer is B.
Flexible budget amount is added to flexible budget variance to calculate actual result. A flexible budget, also called a variable budget, is financial plan of estimated revenues and expenses based on the current actual amount of output.

190. In a joint process of production, two or more products that yield high volume of sales as compared to total sales of other products are classified as

by
split off product
joint product
sunk product
main product
✅ The correct answer is B.
In a joint process of production, two or more products that yield high volume of sales as compared to total sales of other products are classified as joint product. A joint product is a product that results jointly with other products from processing a common input. A joint product can be the output of a process with fixed or variable proportions.