Costing mcqs

✅ ANSWER: D
The physical distance covered by a vehicle is measured in terms of running kilometers or miles.

✅ ANSWER: C
Package which consists of two or more products to be sold for single price, but components of products in package have separate stand-alone price is called bundled product. A bundled product is a package of two or more stand-alone products sold together for a single cost.

✅ ANSWER: A
A manager who is responsible for only cost of company belongs to cost center. A cost center is a department within an organization that does not directly add to profit but still costs the organization money to operate.

✅ ANSWER: A
Re-order level is calculated as Maximum consumption x Maximum re-order period. To calculate the reorder level, multiply the average daily usage rate by the lead time in days for an inventory item.

✅ ANSWER: B
In activity based costing method implementation, indirect costs are allocated by using the One or two cost pools. Cost pools are commonly used for the allocation of factory overhead to units of production, as required by several accounting frameworks.

✅ ANSWER: A
Total transferred-out cost plus normal spoilage is divided by number of goods units produced to calculate cost per good units transferred out.

✅ ANSWER: B
Standard error of regression analysis is known as variance of residual. It is also called unexplained variance.

✅ ANSWER: B
Method which allocates cost of support department to only operating departments is called direct method. The direct allocation method is a technique for charging the cost of service departments to other parts of a business.

✅ ANSWER: C
Method of costing that supports creation of value for customer by accounting whole value stream, rather than individual departments or products is classified as lean accounting. Lean accounting is a financial management approach that supports the streamlined processes of lean manufacturing.

✅ ANSWER: C
Maintaining stores ledger is not a Material control technique. A stores ledger is a manual or computer record of the raw materials and production supplies stored in a production facility. It is maintained by the person responsible for these assets, such as the warehouse manager.