Costing mcqs

✅ The correct answer is B.
Cost pool category, which have similar cause and effect relationship, with each cost driver uses as an allocation base is classified as homogenous cost pool. A cost pool is a grouping of individual costs, typically by department or service center.

✅ The correct answer is B.
Decision model to calculate optimal quantity of inventory to be ordered is called economic order quantity. Economic Order Quantity (EOQ) is a production formula used to determines the most efficient amount of goods that should be purchased based on ordering and carrying costs.

✅ The correct answer is D.
In stand-alone revenue-allocation method, type of weights available for this method is selling prices as weight, unit costs as weights and physical units as weights.

✅ The correct answer is C.
Units cost = Total incurred cost in a production process ÷ Number of output units
= $30000 ÷ 5000 = $6

✅ The correct answer is D.
If net realizable value is $20000 and separable costs are $18000, then final sales will be $38,000.
Final Sales = Net Realizable value + Separable costs
= $20000 + $18000 = $38000.

✅ The correct answer is A.
Budget sales, plus target ending finished goods inventory, minus beginning finished goods inventory is equal to budget production. The production budget contains details of the number of units that are intended to be produced by a business in a particular period.

✅ The correct answer is A.
Manufacturing overhead = Manufacturing indirect cost ÷ Cost allocation base
= $2250000 ÷ 2800 = $803.571 per labour hour

✅ The correct answer is B.
Examples of nonlinear cost functions are step cost functions. The NCF represents a nonlinear multivariate functional of state variables.

✅ The correct answer is B.
Wages paid to workers of factory are termed as overtime premium. An overtime premium is the additional payment made to an employee for hours worked in excess of 40 hours per week.

✅ ANSWER: A
A joint cost allocation method is based on relative value of total sales, at point of split off is classified as sales value at split off method. The split-off point is the point at which joint production stops and processing for separate products begins.