Costing mcqs

✅ The correct answer is D.
Products, divisions and customers are examples of revenue object. A revenue object document is used as the basis for revenue recognition and partner settlement.

✅ The correct answer is A.
Partial or completed units of manufactured goods, that do not meet customer specifications and get sold at reduced price or simply discarded, are called spoilage. Spoilage is waste or scrap that occurs during the manufacturing process.

✅ The correct answer is B.
Flexible budget amount is added to flexible budget variance to calculate actual result. A flexible budget, also called a variable budget, is financial plan of estimated revenues and expenses based on the current actual amount of output.

✅ The correct answer is B.
Range, in which relationship exists between level of activity or total cost is called relevant range. Relevant range is a level of volume or activity within which a company is expected to operate.

✅ The correct answer is A.
The type of process loss that should not affect the cost of inventory value is abnormal loss. Generally, an abnormal loss occurs because of negligence, carelessness, theft, mischief, fraud of employees, or inefficiency.

✅ The correct answer is C.
Prime cost = Raw material consumed + Direct labour + Direct expenses = 90000 + 60000 + 20000 = Rs. 170000.

✅ The correct answer is D.
Cost that has elements of variable and fixed costs at same time is mixed cost and semi variable cost.

✅ The correct answer is D.
Budget which specifies an operating and financial plan, usually for a fiscal year or any specific period of time is classified as master budget. The master budget is the aggregation of all lower-level budgets produced by a company’s various functional areas, and also includes budgeted financial statements, a cash forecast, and a financing plan.

✅ The correct answer is A.
Line which uses to join observations with lower and highest values of cost driver is called straight line.

✅ The correct answer is C.
In a given scenario, if cost is considered as indirect cost then independent variable will be considered as cost allocation base. An allocation base is the basis upon which an entity allocates its overhead costs.