Costing

1. Cost unit of a sugar industry can be ________.

per litre
per tonne
per acre
per metre

Detailed SolutionCost unit of a sugar industry can be ________.

2. Component of total cost, which never changes with change in level of production is classified as

fixed cost
constant
variable
both a and b

Detailed SolutionComponent of total cost, which never changes with change in level of production is classified as

3. Under piece rate system of wage payment, payment is made according to the . . . . . . . .

quantity of work done
time
Both A and B
None of these

Detailed SolutionUnder piece rate system of wage payment, payment is made according to the . . . . . . . .

4. Idle capacity of a plant refers to the difference between ________.

maximum capacity and practical capacity
practical capacity and normal capacity
practical capacity and capacity based on sales expectancy
maximum capacity and actual capacity

Detailed SolutionIdle capacity of a plant refers to the difference between ________.

5. The use of FIFO method is suitable for

Incase of increase in price
Incase of falling price
Incase of fixed price
None of these

Detailed SolutionThe use of FIFO method is suitable for

6. Factor which provides hedge to managers in adverse and unexpected circumstances is known as

budgetary slack
costly slack
influential slack
target slack

Detailed SolutionFactor which provides hedge to managers in adverse and unexpected circumstances is known as

7. For conducting . . . . . . . . workers are studied at their jobs and all their movements and motions are noted.

time study
motion study
merit rating
None of these

Detailed SolutionFor conducting . . . . . . . . workers are studied at their jobs and all their movements and motions are noted.

8. Assertion (A) Increasing the value of closing inventory increases profit. Reason (R) Increasing the value of closing inventory reduces cost of goods sold.

Both (A) and (R) are true
(A) is true, but (R) is false
(A) is false, but (R) is true
Both (A) and (R) are false

Detailed SolutionAssertion (A) Increasing the value of closing inventory increases profit. Reason (R) Increasing the value of closing inventory reduces cost of goods sold.

9. Cost of abnormal spoilage is not treated as

conversion costs
sunk costs
inventoriable costs
non inventoriable costs

Detailed SolutionCost of abnormal spoilage is not treated as

10. Which of the following statements is true about estimated costs and standard costs?

Standard costs are based on scientific analysis and engineering studies, while estimated costs are based on a historical basis
Standard cost emphasis is on 'what cost will be', while estimated cost emphasis is on 'what cost should be'
Standard costs are frequently revised compared to the estimated cost
Estimated costs are stable than standard costs

Detailed SolutionWhich of the following statements is true about estimated costs and standard costs?

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