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.
total goods manufactured
total cash available
total revenue
total goods sold
✅ The correct answer is B.
Cash receipts is added in to beginning cash balance to calculate total cash available. A cash receipt is a printed statement of the amount of cash received in a cash sale transaction.
summarize total costs
compute cost for each equivalent unit
summarize flow of output
compute output in units
✅ The correct answer is B.
Forth step in process costing system is to compute cost for each equivalent unit. Process costing is a term used in cost accounting to describe one method for collecting and assigning manufacturing costs to the units produced.
$6.20
$7.20
$4.20
$5.20
✅ The correct answer is C.
Relevant opportunity cost of capital = Cost of units purchased × Rate of return
= $35 × 12% = $4.20
evaluate variable driver
evaluate cost driver
evaluate price driver
evaluate demand driver
✅ The correct answer is B.
In quantitative analysis of estimating cost function, last and foremost step is to evaluate evaluate cost driver. A cost driver is the unit of an activity that causes the change in activity’s cost.
$47,000
$33,000
$57,000
$18,000
✅ The correct answer is A.
Conversion cost = Direct manufacturing labour costs + Manufacturing overhead cost
= $40000 + $7000 = $47,000
fixed cost driver
cost driver and cost
cost driver and object
mixed cost driver
✅ The correct answer is B.
In adjustment issues of costing, database must contain reliable measure of cost driver and cost. A cost driver is the unit of an activity that causes the change in activity’s cost.
33
91
81
43
✅ The correct answer is A.
Disturbance term = Observed cost value ÷ Predicted cost value
= 62 – 29 = 33
material requisition
material order
goods received note
purchase requisition
✅ The correct answer is A.
consumption of material
issue of material
purchase of material
purchase, storage and issue of material
✅ The correct answer is D.
Material control involves purchase, storage and issue of material. Materials control is the systematic control over the materials at all its stages procurement, storage and usage so as to help in maintaining regular and uninterrupted flow of the materials in the production pipeline.
coordinating company effort
action plan
action accountability
project accountability
✅ The correct answer is A.
An assignment of task for managers, who are accountable for their actions in controlling and budgeting of resources is classified as coordinating company effort. Co-ordination is the unification, integration, synchronization of the efforts of group members so as to provide unity of action in the pursuit of common goals. It is a hidden force which binds all the other functions of management.