Costing mcqs

✅ ANSWER: A
Use of variables to signal whether strategies are effective or ineffective is classified as evaluating strategy. Strategy evaluation means collecting information about how well the strategic plan is progressing.

✅ ANSWER: D
An analysis and estimation method of cost, by classifying cost accounts as fixed or variable with respect for specific output level is considered as account analysis method. The account analysis method is a cost accounting method for estimating the different costs associated with producing a product.

✅ ANSWER: A
LIFO method of pricing of materials is more suitable when material prices are rising. LIFO method of pricing issues is suitable because materials are issued at the current market prices which are high. This method thus helps in showing a lower profit because of increased charge to production during periods of rising prices and lower profit reduces burden of income-tax.

✅ ANSWER: A
Static budget amount is subtracted from flexible budget amount to calculate the sales budget variance. A sales budget is management’s estimate of sales for a future financial period. A business uses sales budgets to set department goals, estimate earnings and forecast production requirements.

✅ ANSWER: C
Labour turnover is change in labour force. Labour turnover may be defined as the number of workers replaced during a given period relative to the average labour force during the period. It is the number of workers who left the job during a period relative to the average labour force during the period.

✅ ANSWER: D
Budget production = Budget sales + Ending inventory – Beginning inventory
= 8000 + 2000 – 3000 = 7000 units.

✅ ANSWER: C
Procedure of assigning direct cost to any cost abject is classified as cost allocation. Cost allocation is the process of identifying, aggregating, and assigning costs to cost objects. A cost object is any activity or item for which you want to separately measure costs.