Costing mcqs

✅ The correct answer is B.
In process costing, a joint product is a product which is produced simultaneously with other products and is of similar value to at least one of the other products.

✅ The correct answer is A.
Reorder point = Number of units sold × Purchase order lead time
= 400 × 35 = 14000 units

✅ The correct answer is A.
Profit to be transferred to profit and loss a/c, if the contract is complete to the extent of only 20% is nil.

✅ The correct answer is A.
Value of normal loss is charged to other good product. The value of normal loss is assessed on the basis of the production cost with which the profit and loss account is charged.

✅ The correct answer is A.
In adjustment issues and data collection, inflation affects the cost driver and cost. A cost driver is the unit of an activity that causes the change in activity’s cost.

✅ The correct answer is C.
Factory overhead is also called as works overhead. Factory overhead, also called manufacturing overhead or work overhead or American English factory burden, is the total cost involved in operating all production facilities of a manufacturing business that cannot be traced directly to a product. It generally applies to indirect labor and indirect cost.

✅ The correct answer is B.
Cause and effect relationship that exists between change in total cost level and change in level of activity, is measured with help of cost driver. Cost drivers are the actual activities that cause the total cost in an activity cost pool to increase.

✅ The correct answer is B.
Gross margin is subtracted from sales value of all production to yield production cost incurred on product. The gross profit margin is calculated by taking total revenue minus the cost of goods sold (COGS) and dividing the difference by total revenue.

✅ The correct answer is D.
Flexible budget = Flexible budget amount – Actual result
= $82000 – $45000 = $37,000

✅ The correct answer is D.
Total costs incur in a production process, is divided by total number of output units to calculate the unit costs. A unit cost is a total expenditure incurred by a company to produce, store, and sell one unit of a particular product or service.