Costing mcqs

✅ The correct answer is D.
In activity based costing system, description of activity can be classified as activity list and activity dictionary.

✅ The correct answer is D.
Master budget includes all projections of company’s budget and focuses on marketing plan and financial plan.

✅ The correct answer is A.
In estimation of cost function, an example of independent variable is level of activity. The activity level is the amount of an activity used by a cost object. The concept is employed in activity-based costing. If the activity level can be reduced, then activity costs should decline, thereby reducing the overall expenditure level of a business.

✅ The correct answer is A.
40% of May sales for cash (40% x Rs. 55,000) = Rs.22,000
70% of April credit sales less 2% discount (70% x 60% x Rs. 70,000 x 98%) = Rs. 28,812
27% of March credit sales (27% x 60% x Rs. 60,000)
= Rs. 9,720
Total Sales = Rs. 22000 + Rs. 28812 + Rs. 9720 = Rs. 60,532.

✅ The correct answer is A.
Output after normal loss
= 10000 – (10000 × 20%) = 8000 units.
Output after abnormal loss
= 8000 – 400 = 7600 units.

✅ The correct answer is C.
For slope coefficient b, value of estimated coefficient is considered as t-value. In statistics, the t-statistic is the ratio of the departure of the estimated value of a parameter from its hypothesized value to its standard error.

✅ The correct answer is B.
Overhead rate = Actual manufacturing overhead costs ÷ Actual total quantity of cost allocation
= $225000 ÷ 2500 = $90

✅ The correct answer is B.
The process of setting standards and comparing actual performance with standards with a view to control the cost is cost control. Cost control is the practice of identifying and reducing business expenses to increase profits, and it starts with the budgeting process. A business owner compares actual results with the budgeted expectations and if actual costs are higher than planned, management takes action.

✅ The correct answer is C.
Joint costs allocated to product A is:
360000 × 30000/60000 = Rs. 180000.

✅ The correct answer is B.
Master Budget is a summary of all functional budgets in a capsule form. Master Budget, in a broader sense, is a summary budget incorporating all financial budgets in a capsule form.