Multiple Choice Questions on MCQ on Cost Accounting
31-Over absorption of overheads in cost accounts results in
(A) Decrease in costing profit
(B) Increase in costing profit
(C) Decrease in Financial Accounts profit
(D) No effect on profits of both the accounts
ANSWERS: (A) Decrease in costing profit
32-Composite Unit is a distinctive feature of which method of costing?
(A) Single costing
(B) Operating costing
(C) Process costing
(D) Job costing
ANSWERS: (B) Operating costing
33-In a contract costing, direct wages are debited to
(A) Contract account
(B) Contractor account
(C) Contractee account
(D) Work in progress account
ANSWERS: (A) Contract account
34-Paper mills are must adopt
(A) Unit costing
(B) Process costing
(C) Job costing
(D) Contract costing
ANSWERS: (A) Unit costing
35-Job costing is the most suitable method for
(A) Oil processing units
(B) Transport Companies
(C) Sugar Industry
(D) Repair shops
ANSWERS: (D) Repair shops
36-Identify the name of industry for batch costing
(A) Chemical
(B) Ready-made Garments
(C) Transport
(D) Furniture
ANSWERS: (B) Ready-made Garments
37-The best sales mix with results of highest
(A) Break even
(B) Profit
(C) Contribution
(D) Variable cost
ANSWERS: (C) Contribution
38-Difference between the costs of two alternative is known as
(A) Variable cost
(B) Opportunity cost
(C) Marginal cost
(D) Differential cost
ANSWERS: (D) Differential cost
39-Which of the following is incorrect Equation of contribution?
(A) Sales – Variable Cost
(B) Fixed Cost + Profit
(C) Sales – Fixed Cost
(D) Sales – Marginal Cost
ANSWERS: (C) Sales – Fixed Cost
40-Differential cost is the difference in
(A) Fixed costs for two levels of output
(B) Variable costs for two levels of production
(C) Total costs for two levels of output
(D) Fixed cost and revenue
ANSWERS: (C) Total costs for two levels of output
