Costing mcqs

✅ The correct answer is B.
Work uncertified is credited to contract a/c. The cost of work uncertified represents the cost of work which has already been. completed, but for that the contractor has not received completion certificate from the contractee’s surveyor or architect.

✅ The correct answer is C.
Third step in process costing system is to summarize total costs. Process costing is a method of assigning production costs to units of output.

✅ The correct answer is C.
To decide whether cost is variable cost or fixed cost with respect to some specific activity depends upon time horizon. Time horizon is the length of time over which an investment is made or held before it is liquidated. Time horizons can range from seconds in the case of a day trader, all the way up to decades for a buy-and-hold investor or an individual who is investing in a retirement plan.

✅ The correct answer is D.
Conversion cost is subtracted from direct manufacturing labour cost is to calculate the manufacturing overhead cost. Conversion costs is a term used in cost accounting that represents the combination of direct labor costs and manufacturing overhead costs.

✅ The correct answer is D.
In accounting, cost which is predicted to be incurred or future cost is known as budgeted cost. A budgeted cost is a forecasted future expense that the company is expected to incur in the future.

✅ The correct answer is A.
Cash Budget is a detailed budget of cash receipts and cash expenditure incorporating both revenue and capital items. 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.

✅ The correct answer is B.
The process of allocating and apportioning the costs on suitable basis to all the departments is primary distribution.

✅ The correct answer is D.
An expected future cost which diverges in unconventional course of action is known as relevant cost. Relevant cost is a managerial accounting term that describes avoidable costs that are incurred when making business decisions. The concept of relevant cost is used to eliminate unnecessary data that could complicate the decision-making process.

✅ The correct answer is B.
Cost accounting differs from financial accounting in respect of ascertainment of cost. Cost Accounting refers to that branch of accounting which deals with costs incurred in the production of units of an organization. On the other hand, financial accounting refers to the accounting concerned with recording financial data of an organization, in order to exhibit exact position of the business.

✅ The correct answer is A.
Job costing method of costing can be used in furniture manufacture industry. A job card is made for each work or job. This method of costing is used in the factories which produce the machine tool and other engineering products, furniture projects, hardware and interior decoration. This method of costing is also called a piece of work costing or terminal costing.