Costing mcqs

✅ The correct answer is D.
For every 100 hours that they pay for, there are 20 hours idle and therefore 80 hours worked.
So, for every 80 hours worked they will have to pay for 100 hours, again with 20 hours idle.

The idle time is 20/80 = 25% of the time worked.

So for this question they need 200 x 6 = 1200 hours of work.
Therefore they will have to pay for 1200 x 100/80 = 1500 hours.
This will cost them 1500 x Rs. 7 = Rs.10,500

✅ The correct answer is A.
In activity based costing method implementation, an output unit level costs are classified as indirect costs. Indirect costs are costs used by multiple activities, and which cannot therefore be assigned to specific cost objects.

✅ The correct answer is B.
Costs of all activities for individual products or services can be called output-unit level costs. Output unit level costs are the costs of activities.

✅ The correct answer is A.
In regression analysis, if predicted cost value is 65 and observed cost value is 19 then disturbance term will be 46.
Disturbance term cost = Predicted cost value – Observed cost value
= 65 – 19 = 46.

✅ The correct answer is A.
Total Cost 4800
Variance was Rs. 600 (A)
As Variance adverse means it is higher than standard cost
So standard cost = 4800 – 600 = 4200
Labour worked 300 hours
Standard cost per labour hour = 4200/300 =14

✅ The correct answer is B.
Relationship between change in activity and change in total costs is considered as cause and effect relationship.

✅ The correct answer is C.
In an activity based cost system; an activity/unit of work or task with differentiated purposes will be classified as an activity. Activity-based costing (ABC) is an accounting method that identifies and assigns costs to overhead activities and then assigns those costs to products.

✅ The correct answer is C.
Cost p.u 160

75%is variable cost 120p.u

40rs p.u fixed cost (fixed cost not change when production unit increase or decrease) fixed cost is
40 * 10000 = Rs. 400000

Cal cost p.u if production increase by 25%

10000 + 25% = Rs. 12500

Total cost = variable cost + fixed cost

(12500 * 120) + 400000 = Rs. 1900000

Cost p.u = 1900000 / 12500 = Rs. 152

✅ The correct answer is B.
A document which consists information about labour time usage, for specific job in a specific department, is known as labour time record. A document which records the amount of time spent by an employee, showing the analysis between a numbers of activities during a payment period. It may record the wages (labour cost) of the time spent.

✅ The correct answer is D.
Strength of relationship between cost driver and cost is considered as goodness of fit. Goodness of fit measures the degree of association between cost and activity.