Costing mcqs

Hierarchy which is based on different types of cost allocation and drivers, is to categorize cost pool activity is classified as

by
cost hierarchy
price hierarchy
activity hierarchy
purpose hierarchy
✅ The correct answer is A.
Hierarchy which is based on different types of cost allocation and drivers, is to categorize cost pool activity is classified as cost hierarchy. The cost hierarchy is a classification system used in activity-based costing that designates activities based on how easily they can be traced to a product.

Calculate the labour turnover rate according to replacement method from the following: No of workers on the payroll: – At the beginning of the month: 500 – At the end of the month: 600 During the month, 5 workers left, 20 workers were discharged and 75 workers were recruited Ofthese, 10 workers were recruited in the vacancies of those leaving and while the rest were engaged for an expansion scheme

by
4.55%
1.82%
6%
3%
✅ The correct answer is B.
Replacement method = No of worker replaced during the period/Average no of workers at same period × 100

No of worker replaced during the period = 10

Average no of workers = (500+600)/2= 550

∴10/ 550 × 100

=1.82%

If budgeted total direct labour hours are 3800 and budgeted direct labour cost is $480000, then budgeted direct labour cost rate will be

by
$126.32 per labour hour
$128.32 per labour hour
$130 per labour hour
$132 per labour hour
✅ The correct answer is A.
Budgeted direct labour cost rate = Budgeted direct labour cost ÷ Budgeted total direct labour hours
= $480000 ÷ 3800 = $126.32 per labour hour

In a normal accounting period, allocated amount of indirect cost is $2000 and actual amount is $2200, then this is classified as

by
over allocated budget
under allocated budget
under allocated indirect cost
over allocated direct cost
✅ The correct answer is A.
In a normal accounting period, allocated amount of indirect cost is $2000 and actual amount is $2200, then this is classified as over allocated budget because allocated amount is less than actual amount.

Quantitative expression, of action plan by management of firm for a specified period of time is classified as

by
complexity
process
budget
batching
✅ The correct answer is C.
Quantitative expression, of action plan by management of firm for a specified period of time is classified as budget. A budget is an estimation of revenue and expenses over a specified future period of time and is utilized by governments, businesses, and individuals.