Costing mcqs

✅ The correct answer is C.
Industrial engineering method is used to analyze relationship between input and output. Industrial engineering method is a physical way of examining the relationship between cost drivers and costs by analyzing the inputs coming into the company, the outputs that are created, and the work that goes into the process.

✅ The correct answer is C.
Model which states decline in extra time needed to produce last unit, every time for cumulative quantity of doubled units produced is classified as incremental unit time learning model. Incremental unit-time learning model can be defined as Learning curve model in which the incremental unit time (the time needed to produce the last unit) is reduced by a constant percentage each time the cumulative quantity of units produced is doubled.

✅ The correct answer is C.
Flexible budget = Actual result – Flexible budget amount
= $26000 – $13000 = $13,000

✅ The correct answer is A.

✅ The correct answer is B.
Continuous stock taking is a part of perpetual inventory. Perpetual inventory is a method of accounting for inventory that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

✅ The correct answer is C.
Prime cost = Direct material cost + Direct manufacturing labour
= $75000 + $20000 = $95,000

✅ The correct answer is B.
Stage in production process, where manufactured goods are checked; whether units are acceptable or not is classified as inspection point. An inspection point is an identifiable record of inspection results that is assigned to a work or inspection operation.

✅ The correct answer is B.
Direct labour and salary outlays direct material purchases, which are classified as cash disbursements. Cash disbursements, also called cash payments, in accounting refer to payments made by a company during a specified period, such as quarter or year.

✅ The correct answer is D.
In a machine dominated industry Machine hour method of overhead absorption is suitable. Under this method, hourly rate of depreciation is calculated. The cost of the asset (less residual value if any) is divided by the estimated working hours. The actual depreciate for any given period depends upon the working hours during that year.

✅ The correct answer is B.
Type of costs that cannot be traced for individual products but help in supporting an organization are classified as facility sustaining costs.