Costing mcqs

An amount by which total cost changes with respect to change in level of activity is classified as

by
activity coefficient
cost coefficient
change coefficient
slope coefficient
✅ The correct answer is D.
An amount by which total cost changes with respect to change in level of activity is classified as slope coefficient. The slope coefficient usually refers to the coefficient of any independent variable, x, in a regression equation.

Manager who is responsible for investments of company, its costs and revenues is known as

by
profit center
investment center
cost center
revenue center
✅ The correct answer is B.
Manager who is responsible for investments of company, its costs and revenues is known as investment center. An investment center is a business unit that can utilize capital to contribute directly to a company’s profitability.

A Local Authority is preparing cash Budget for its refuse disposal department. Which of the following items would not be included in the cash budget?

by
Capital cost of a new collection vehicle
Depreciation of the machinery
Operatives wages
Fuel for the collection Vehicles
✅ The correct answer is B.
A Local Authority is preparing cash Budget for its refuse disposal department. Depreciation of the machinery would not be included in the cash budget. Depreciation is not a cash item and would be excluded from the cash budget.

Out of the following, what is not the work of purchase department:

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Receiving purchase requisition
Exploring the sources of material supply
Preparation and execution of purchase orders
Accounting for material received
✅ The correct answer is D.
Accounting for material received is not the work of purchase department. Most major companies and even some government organizations have a purchasing or procurement department as part of everyday operations. These departments provide a service that is the backbone of many manufacturing, retail, military and other industrial organizations.

The amount paid to sub-contractor is ________.

by
subtracted from the contract price
debited to contract a/c
credited to contract a/c
added with the contract price
✅ The correct answer is B.
The amount paid to sub-contractor is debited to contract a/c. Contract means a big job in which work is done at site and not in factory premises. The cost of each contract is ascertained. Thus in this method of costing, each contract is a cost unit and an account is opened for each contract in the books of contractor to ascertain profit/loss thereon.