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.
coordination
communication
annual profit plan
budgeting
✅ The correct answer is B.
An act of making sure, that all employees must understand goals is classified as communication. Communication is simply the act of transferring information from one place, person or group to another. Every communication involves (at least) one sender, a message and a recipient.
residual term
positive term
negative term
squared term
✅ The correct answer is A.
Vertical difference, which measures distance between estimated and actual cost for every single observation is classified as residual term.
actual values
predicted values
residual values
indexed values
✅ The correct answer is B.
Goodness of fit is used to measure wellness of predicted values. The goodness-of-fit is a measure of how well the fitted PF accounts for the data.
short lengths from wood work
defective aluminium cans recycled by manufacturer
detection of defective pieces before shipment
all of above
✅ The correct answer is B.
Defective aluminium cans recycled by manufacturer is an example of spoilage. Spoilage is waste or scrap that occurs during the manufacturing process.
to be implemented
based on current practice
based on past prices
based on sold quantity
✅ The correct answer is A.
In Kaizen budgeting, costs are based on all improvements which is to be implemented. Kaizen budgeting takes the concept of continual improvement and applies it to budgets and budget forecasting.
individual incentive scheme
group incentive scheme
time and piece wage system
differential piece wage system
✅ The correct answer is A.
Halsey premium plan is individual incentive scheme. Under Halsey plan minimum wages are guaranteed to every worker. A standard time is fixed for the workers. If the workers finish the work before standard time they are given bonus.
Last In First Out
First In First Out
Highest In First Out
weighted average price
✅ The correct answer is A.
According Last In First Out method of pricing issues is close to current economic values. LIFO Accounting means inventory which was acquired last would be used up or sold first.
activity level costs
input level costs
batch level costs
output level costs
✅ The correct answer is C.
Costs of all activities for a group of products, rather than individual product can be classified as batch level costs. A batch-level cost is a cost related to a group of units, but which is not associated with specific individual units.
planned schedule
cash budget
market budget
price schedule
✅ The correct answer is B.
Schedule of expected disbursements and cash receipts is considered as cash budget. A cash budget is an estimation of the cash inflows and outflows for a business over a specific period of time. This budget is used to assess whether the entity has sufficient cash to operate.
mixed curve
experience curve
discrete curve
fixed curve
✅ The correct answer is B.
Function which is used to measure decline in per unit cost of different business functions is classified as experience curve. Experience curve refers to a diagrammatic representation of the inverse relationship between the total value-added costs of a product and the company experience in manufacturing and marketing it.