20%
25%
73%
125%
✅ The correct answer is A.
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.
232. In specification analysis, assumptions related to variance states that:
variance of residuals is constant
variance of goodness is constant
goodness of fit is constant
standard error is constant
✅ The correct answer is A.
In specification analysis, assumptions related to variance states that variance of residuals is constant.
In specification analysis, assumptions related to variance states that variance of residuals is constant.
233. Relationship between cost and cost drivers is
stationary
not stationary
intrinsic
extrinsic
✅ The correct answer is B.
Relationship between cost and cost drivers is not stationary. A Cost Driver is that factor or variable which has a cause and effect relationship with the total cost. The cost driver is the ’cause’ and the ‘cost incurred’ is the effect of it.
Relationship between cost and cost drivers is not stationary. A Cost Driver is that factor or variable which has a cause and effect relationship with the total cost. The cost driver is the ’cause’ and the ‘cost incurred’ is the effect of it.
234. Gross margin percentage in constant gross-margin percentage NRV method is based on
total labour costs
total production
total revenues
total costs
✅ The correct answer is B.
Gross margin percentage in constant gross-margin percentage NRV method is based on total production.
Gross margin percentage in constant gross-margin percentage NRV method is based on total production.
235. Manager who is responsible for investments of company, its costs and revenues is known as
profit center
investment center
cost center
revenue center
✅ The correct answer is B.
Manager who is responsible for investments of company, its costs and revenues is known as investment center. An investment center is a business unit that can utilize capital to contribute directly to a company’s profitability.
Manager who is responsible for investments of company, its costs and revenues is known as investment center. An investment center is a business unit that can utilize capital to contribute directly to a company’s profitability.
236. A Local Authority is preparing cash Budget for its refuse disposal department. Which of the following items would not be included in the cash budget?
Capital cost of a new collection vehicle
Depreciation of the machinery
Operatives wages
Fuel for the collection Vehicles
✅ The correct answer is B.
A Local Authority is preparing cash Budget for its refuse disposal department. Depreciation of the machinery would not be included in the cash budget. Depreciation is not a cash item and would be excluded from the cash budget.
A Local Authority is preparing cash Budget for its refuse disposal department. Depreciation of the machinery would not be included in the cash budget. Depreciation is not a cash item and would be excluded from the cash budget.
237. Bad debt is an example of ________.
production overhead
administrative overhead
selling overhead
distribution overhead
✅ The correct answer is C.
Bad debt is an example of selling overhead. The expenses incurred by an organization in carrying out its selling activities.
Bad debt is an example of selling overhead. The expenses incurred by an organization in carrying out its selling activities.
238. cost object user, who is ranked first in incremental cost allocation method is known as
First incremental user
primary user
secondary user
second incremental user
✅ The correct answer is B.
cost object user, who is ranked first in incremental cost allocation method is known as primary user. The term primary user describes someone who interacts with a system. The primary user is in direct contact with the system interface and thus is usually most affected by it.
cost object user, who is ranked first in incremental cost allocation method is known as primary user. The term primary user describes someone who interacts with a system. The primary user is in direct contact with the system interface and thus is usually most affected by it.
239. In plotting of cost functions, level of activities according to which charged cost is represented on
x-axis
y-axis
unit axis
term axis
✅ The correct answer is A.
In plotting of cost functions, level of activities according to which charged cost is represented on x-axis.
In plotting of cost functions, level of activities according to which charged cost is represented on x-axis.
240. An amount by which total cost changes with respect to change in level of activity is classified as
activity coefficient
cost coefficient
change coefficient
slope coefficient
✅ The correct answer is D.
An amount by which total cost changes with respect to change in level of activity is classified as slope coefficient. The slope coefficient usually refers to the coefficient of any independent variable, x, in a regression equation.
An amount by which total cost changes with respect to change in level of activity is classified as slope coefficient. The slope coefficient usually refers to the coefficient of any independent variable, x, in a regression equation.