Costing mcqs

✅ The correct answer is C.
Manufacturing overhead cost = Conversion cost – Direct manufacturing labour cost
= $25000 – $17000 = $8,000

✅ The correct answer is C.
If coefficients are similar for two accounting periods, then single cost relationship is estimated with help of pool of data. Cost pools is an accounting term that refers to groups of accounts serving to express the cost of goods and service allocatable within a business or manufacturing organization.

✅ The correct answer is B.
Model which refers possibility for management to conduct sensitivity analysis can be categorized under financial planning models. A financial planning model uses certain elements to create a future financial plan for a company.

✅ The correct answer is B.
Equivalent units in current period = Beginning work in process equivalent units + Work done in current period equivalent units – Ending work in process equivalent units
= 2500 + 3800 – 4000 = 2300 units

✅ The correct answer is A.

✅ The correct answer is B.
Cost of operating activity, facility or any cost object which usually shares by two or more than two users is classified as common cost. A common cost is a cost that is not attributable to a specific cost object, such as a product or process.

✅ The correct answer is B.
Department which provides assisting services to internal departments is classified as support department.

✅ The correct answer is C.
Budget production = Budget sales + Ending inventory – Beginning inventory
= 5000 + 4000 – 1000 = 8000 units.

✅ The correct answer is A.
Cost Audit refers to the verification of cost accounts and check on the adherence to the cost accounting plan. Cost Audit represents the verification of cost accounts and check on the adherence to cost accounting plan.

✅ The correct answer is B.
Larger number of manager subordinates and higher level manager are termed as broader responsibility center. A responsibility center is a functional entity within a business that has its own goals and objectives, dedicated staff, policies and procedures, and financial reports.