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.

611. In a joint process of production, a product which yields high volume of sales as compared to total sales volume of other products is known as

by
incremental product
sunk product
main product
split off product
✅ The correct answer is C.
In a joint process of production, a product which yields high volume of sales as compared to total sales volume of other products is known as main product. A main product is a joint output that generates a significant portion of the net realizable value within a joint production process.

612. Costing system, in which individual activities are identified as cost object is considered as

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manufactured costing
activity based costing
allocation costing
base costing
✅ The correct answer is B.
Costing system, in which individual activities are identified as cost object is considered as activity based costing. The ABC system of cost accounting is based on activities, which is any event, unit of work, or task with a specific goal, such as setting up machines for production, designing products, distributing finished goods, or operating machines.

613. Production units that do not meet customer specification, but can be sold to other customers as finished goods are classified as

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reduced work
spoilage
rework
scrap
✅ The correct answer is C.
Production units that do not meet customer specification, but can be sold to other customers as finished goods are classified as rework. Rework refers to the correction of a product that does not initially meet an entity’s minimum quality standards.

618. In cause and effect relationship between cost level and cost driver, inflationary price effects are removed by dividing cost through

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price index
cost index
profit index
cost driver index
✅ The correct answer is A.
In cause and effect relationship between cost level and cost driver, inflationary price effects are removed by dividing cost through price index. A price index is a normalized average (typically a weighted average) of price relatives for a given class of goods or services in a given region, during a given interval of time.