Costing mcqs

✅ The correct answer is B.
Absorption means charging of overheads to cost units. It means costs is absorbed by the production (or product units )during the period or charging each unit of a product with an equitable share of overhead expenses.

✅ The correct answer is D.
Aspects of accounting for scrap includes physical tracking and inventory costing.

✅ The correct answer is A.
An assignment of task for managers, who are accountable for their actions in controlling and budgeting of resources is classified as coordinating company effort. Co-ordination is the unification, integration, synchronization of the efforts of group members so as to provide unity of action in the pursuit of common goals. It is a hidden force which binds all the other functions of management.

✅ The correct answer is C.
The following statements that are correct are: A materials requisition note is used to record the issue of direct material to a specific job and The job costing method can be applied in costing batches.

✅ The correct answer is C.
Segment of subunit of company, whose manager is responsible for specific set of instructions and activities perform is classified as responsibility center. A responsibility center is a functional entity within a business that has its own goals and objectives, dedicated staff, policies and procedures, and financial reports.

✅ The correct answer is D.
Costs are classified as fixed or variable on basis of specific activity and given time period.

✅ The correct answer is D.
In an activity based costing implementation, product’s diverse demand is based on batch size, complexity and process steps.

✅ The correct answer is A.
First step in constant gross margin percentage NRV method is to allocate joint to compute Gross margin percentage. Gross margin is the difference between revenue and cost of goods sold divided by revenue. Gross margin is expressed as a percentage.

✅ The correct answer is A.
Conversion cost = Direct manufacturing labour costs + Manufacturing overhead cost
= $40000 + $7000 = $47,000

✅ The correct answer is B.
In adjustment issues of costing, database must contain reliable measure of cost driver and cost. A cost driver is the unit of an activity that causes the change in activity’s cost.