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.

241. All costs, which are assigned to manufactured products for specific calculations are classified as

by
contracting costs
product cost
government costs
marketing costs
✅ The correct answer is B.
All costs, which are assigned to manufactured products for specific calculations are classified as product cost. Product cost refers to the costs incurred to create a product. These costs include direct labor, direct materials, consumable production supplies, and factory overhead.

242. Number of observations in regression analysis is considered as

by
degree of possibility
degree of average
degree of variance
degree of freedom
✅ The correct answer is D.
Number of observations in regression analysis is considered as degree of freedom. In a regression model, each term is an estimated parameter that uses one degree of freedom. In the regression output below, you can see how each term requires a DF.

247. Direct labour means ________.

by
labour which can be conveniently associated with aparticular cost unit
labour which completes the work manually
permanent labour in the production department
labour which is recruited directly and not through contractors
✅ The correct answer is A.
Direct labour means labour which can be conveniently associated with aparticular cost unit. Direct Labour cost consists of wages paid to workers directly engaged in manufacturing or handling a product, job or process.

249. Spread of over allocated overhead and under allocated overhead among work in process, finished goods and goods sold cost is classified as

by
proration approach
appreciation approach
depreciation approach
adjusted approach
✅ The correct answer is A.
Spread of over allocated overhead and under allocated overhead among work in process, finished goods and goods sold cost is classified as proration approach.

250. Method which ranks cost object incurred by individual users, in ranking order of more responsible users is classified as

by
bundled products allocation method
variable cost allocation method
stand-alone cost allocation method
incremental cost allocation method
✅ The correct answer is D.
Method which ranks cost object incurred by individual users, in ranking order of more responsible users is classified as incremental cost allocation method. Cost allocation methods are designed to allocate costs not necessarily associated with a product, to the appropriate products to get a realistic estimate of costs so that a proper price can be determined for a particular product.