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.

582. Budgeting method, which incorporates an improvement anticipated in budgeting period into budget numbers can be classified as

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anticipated budgeting
number budgeting
predict budgeting
kaizen budgeting
✅ The correct answer is D.
Budgeting method, which incorporates an improvement anticipated in budgeting period into budget numbers can be classified as kaizen budgeting. Kaizen budgeting takes the concept of continual improvement and applies it to budgets and budget forecasting.

583. Which of the following organisations should not be advised to use service costing?

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Distribution service
Hospital
Maintenance division of a manufacturing company
A light engineering company
✅ The correct answer is D.
A light engineering company should not be advised to use service costing. Service costing is a type of operation costing which is used in organizations which provide services instead of producing goods.

585. Method, which uses specific information on products as weights to allocate bundled revenues for each product in bundle is classified as

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step down allocation method
stand-alone revenue allocation method
incremental revenue allocation method
revenue mix allocation method
✅ The correct answer is B.
Method, which uses specific information on products as weights to allocate bundled revenues for each product in bundle is classified as stand-alone revenue allocation method. Revenue Allocation Method uses product-specific information on the products in the bundle as weights for allocating the bundled revenues to the individual products.

586. _________ is also known as working capital ratio.

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Current ratio
Quick ratio
Liquid ratio
Debt-equity ratio
✅ The correct answer is A.
Current ratio is also known as working capital ratio. The working capital ratio is commonly used to assess a company’s financial performance. Low working capital ratio values, near one or lower, can indicate serious financial problems with a company. The working capital ratio reveals whether the company has enough short-term assets to pay off its short-term debt.

589. Number of methods available for calculation of Labour turnover is ________.

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two
three
four
five
✅ The correct answer is B.
Separation Method

Labour Turnover = No. of workers left or separated during a period / Average number of workers on role during that period x 100

Replacement Method

Labour Turnover = No. of workers replaced during a period / Average number of workers on role during that period x 100

Flux Method

Labour Turnover = (No.of workers separated in a period + No. of workers replaced in the same period) / Average number of workers on role during that period x 100

Note : Average No.of. Workers = (No. of workers at the beginning of the period + No. of workers at the end of the period) / 2

590. Costs of undertaken activities is to support individual products are known as

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expected sustaining
input sustaining
output sustaining
product sustaining costs
✅ The correct answer is D.
Costs of undertaken activities is to support individual products are known as product sustaining costs. Product-sustaining costs are cost activities that support a particular product or service line, regardless of the number of units produced.