Costing mcqs

✅ The correct answer is A.
For companies in service sector, cost which is not considerable is Inventoriable costs. Inventoriable costs, also known as product costs, refer to the direct costs associated with the manufacturing of products for revenue generation.

✅ The correct answer is B.
Function which is used to measure decline in per unit cost of different business functions is classified as experience curve. Experience curve refers to a diagrammatic representation of the inverse relationship between the total value-added costs of a product and the company experience in manufacturing and marketing it.

✅ The correct answer is B.
An average inventory in units is multiplied with annual relevant carrying cost of each unit to calculate annual relevant carrying costs. Carrying costs are the costs of holding inventory and include maintenance, specifically in regard to perishable items, and storage costs.

✅ The correct answer is C.
Costing system, which is a combination of process costing and job costing system is classified as hybrid costing system. Hybrid costing is used to separate costs and allocate costs to individual products or groups of products.

✅ The correct answer is C.
Fixed cost is a cost which do not change in total during a given period despite changes in output. A fixed cost is a cost that does not change with an increase or decrease in the amount of goods or services produced or sold. Fixed costs are expenses that have to be paid by a company, independent of any specific business activities.

✅ The correct answer is D.
When standard output is 10 units per hour and actual output is 12 units per hour, the efficiency is 120%.

✅ The correct answer is D.

✅ The correct answer is C.
Idle time is time spent by workers off their work. Idle time is unproductive time on the part of employees or machines caused by management or as a result of factors beyond their control. Idle time is the time associated with waiting, or when a piece of machinery is not being used but could be.

✅ The correct answer is C.
Costs of all activities for a group of products, rather than individual product can be classified as batch level costs. A batch-level cost is a cost related to a group of units, but which is not associated with specific individual units.

✅ The correct answer is B.
Schedule of expected disbursements and cash receipts is considered 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.