Costing mcqs

✅ The correct answer is C.
This is a point at which the store keeper should initiate purchase requisition for fresh supply It is reorder level. Re-order level is a level of material at which the storekeeper should initiate the purchase requisition for fresh supplies. When the stock-in-hand comes down to the re-ordering level, it is an indication that an action should be taken for replenishment or purchase.

✅ The correct answer is C.
An inward delivery charges and custom duties are classified as direct material costs. Direct materials cost the cost of direct materials which can be easily identified with the unit of production.

✅ The correct answer is D.
Budget, which predicts effect of given level of operations on a cash position is classified 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.

✅ The correct answer is A.
Cost of idle time arising due to non availability of raw material is charged to costing profit and loss account. The cost of idle facilities for reasons such as trade depression, shortage of demand, etc. should be written off to Costing Profit and Loss Account.

✅ The correct answer is C.
If units of normal spoilage are 150 and total good units manufactured are 1500, then normal spoilage rate would be 10.00%.
Normal spoilage% = Normal spoilage / Total unit × 100
= 150/1500 × 100 = 10%.

✅ The correct answer is D.
Cost of Good units will be affected by normal loss.

✅ The correct answer is A.
Cost, which is related to specific cost object and economically traceable, will be classified as direct cost. A direct cost is a price that can be completely attributed to the production of specific goods or services.

✅ The correct answer is C.
Costing and allocating situation, in which indirect cost allocated amount is less than actually incurred amount is known as under allocated indirect cost. Overhead allocation is the apportionment of indirect costs to produced goods.

✅ The correct answer is C.
Objective is main advantage of quantitative method. Generally, quantitative methods are designed to provide summaries of data that support generalisations about the phenomenon under study.

✅ The correct answer is A.