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.
bundled cost
common cost
stand-alone cost
incremental cost
✅ The correct answer is B.
Cost of operating activity, facility or any cost object which usually shares by two or more than two users is classified as common cost. A common cost is a cost that is not attributable to a specific cost object, such as a product or process.
supply department
support department
production department
allocation base department
✅ The correct answer is B.
Department which provides assisting services to internal departments is classified as support department.
4000 units
5000 units
8000 units
10000 units
✅ The correct answer is C.
Budget production = Budget sales + Ending inventory – Beginning inventory
= 5000 + 4000 – 1000 = 8000 units.
data of fixed cost
cost driver of data
pool of data
cost object of data
✅ The correct answer is C.
If coefficients are similar for two accounting periods, then single cost relationship is estimated with help of pool of data. Cost pools is an accounting term that refers to groups of accounts serving to express the cost of goods and service allocatable within a business or manufacturing organization.
investment planning models
financial planning models
cost planning models
revenues forecast models
✅ The correct answer is B.
Model which refers possibility for management to conduct sensitivity analysis can be categorized under financial planning models. A financial planning model uses certain elements to create a future financial plan for a company.
1800 units
2300 units
10300 units
1500 units
✅ The correct answer is B.
Equivalent units in current period = Beginning work in process equivalent units + Work done in current period equivalent units – Ending work in process equivalent units
= 2500 + 3800 – 4000 = 2300 units
Floor Area
Value of Machines
No of Workers
No of Machines
✅ The correct answer is B.
Most suitable basis for apportioning insurance of machine would be Value of Machines.
Straight piece rate
Differential piece rate
Premium and bonus plan
Time wage rate
✅ The correct answer is D.
Under Time wage rate method of wage payment, wages are influenced by idle time. Under time wage system, wages are paid on the basis of time spent on the job irrespective of the amount of work done.
normal spoilage rates
abnormal spoilage rates
normal scrap rates
abnormal scrap rates
✅ The correct answer is A.
Units of normal spoilage are divided to total completed units, rather than total actual produced units to calculate normal spoilage rates. The normal spoilage will be calculated as the total number of spoiled units, divided by the total units produced, and multiplied by 100.
$14,700
$68,000
$8,000
$42,000
✅ The correct answer is C.
Manufacturing overhead cost = Conversion cost – Direct manufacturing labour cost
= $25000 – $17000 = $8,000