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.

41. A joint cost allocation method is based on relative value of total sales, at point of split off is classified as

by
A) sales value at split off method
B) joint costs at split off point method
C) joint products value at split off method
D) main product cost at split off method
✅ ANSWER: A
A joint cost allocation method is based on relative value of total sales, at point of split off is classified as sales value at split off method. The split-off point is the point at which joint production stops and processing for separate products begins.

43. Package which consists of two or more products to be sold for single price, but components of products in package have separate stand-alone price is called

by
A) step down product
B) dual mix product
C) bundled product
D) reciprocal product
✅ ANSWER: C
Package which consists of two or more products to be sold for single price, but components of products in package have separate stand-alone price is called bundled product. A bundled product is a package of two or more stand-alone products sold together for a single cost.

45. Re-order level is calculated as:

by
A) Maximum consumption x Maximum re-order period
B) Minimum consumption x Minimum re-order period
C) 1/2 of (Minimum + Maximum consumption)
D) Maximum level – Minimum level
✅ ANSWER: A
Re-order level is calculated as Maximum consumption x Maximum re-order period. To calculate the reorder level, multiply the average daily usage rate by the lead time in days for an inventory item.

46. In activity based costing method implementation, indirect costs are allocated by using the

by
A) no cost pool
B) One or two cost pools
C) sustained tracing
D) support tracing
✅ ANSWER: B
In activity based costing method implementation, indirect costs are allocated by using the One or two cost pools. Cost pools are commonly used for the allocation of factory overhead to units of production, as required by several accounting frameworks.

47. Total transferred-out cost plus normal spoilage is divided by number of goods units produced to calculate

by
A) cost per good units transferred out
B) cost per good units transferred in
C) revenue per good units transferred out
D) revenue per good units transferred in
✅ ANSWER: A
Total transferred-out cost plus normal spoilage is divided by number of goods units produced to calculate cost per good units transferred out.