Cost Accounting MCQ
What Is Cost Accounting?
Cost accounting is a method of managerial accounting which aims to capture the total production cost of a business by measuring the variable costs of each production phase as well as fixed costs, such as a lease expense.
Examples include rent, depreciation, interest on loans and lease expenses. Direct, indirect, fixed, and variable are the 4 main kinds of cost. In addition to this, you might also want to look into operating costs, opportunity costs, sunk costs, and controllable costs.
21. Prime cost comprises the following combination of costs
a) Direct materials and factory overhead
b) Direct labour and factory overhead
c) Direct material direct labour and direct expense
d) None of these
Answer:- c
22. Conversion and prime costs are
a) Synonymous and can be used induce changeably
b) Both include factory overhead with its variable and fixed components
c) Represent cost incurred on joint product before the split off point
d) Differ
Answer:- d
23. An important feature of cost centre is that
a) It uses only monitory information
b) It has clearly defined boundaries
c) It may be one specific location only
d) It must be an area of business through which product pass
Answer:- b
24. The term cost refers to
a) An asset that has given benefit and is now expired
b) The price of product sold or services rendered
c) The value of sacrifice made to require goods or service
d) The present value of future benefit
Answer:- c
25. Direct material is a
a) Manufacturing cost
b) Administration cost
c) Selling and distribution cost
d) Factory overhead
Answer:- a
26. Cost accounting emerged mainly on account of
a) Statutory requirements
b) Competition in the market
c) Limitation of financial accounting
Answer:- c
27. Advantage of cost accounting system accrue
a) Only to workers
b) Only to management
c) To consumers , workers , government , and management
Answer:- c
28. Marginal costing in concerned with
a) Fixed costs
b) Variable cost
c) Semi – fixed cost
Answer:- b
29. A biscuit manufacturing concern employs
a) Departmental costing
b) Batch costing
c) Process costing
Answer:- b
30. Aggregate of direct cost is known as ……………
a) Direct material cost
b) Direct labour cost
c) Prime cost
Answer:- c
