Costing Methods(Cost Accounting ) Questions and Answers

Question 1. The costing system, which omits some of the journal entries in accounting system is known as
  1.    in-time costing
  2.    trigger costing
  3.    back flush costing
  4.    lead time costing
Explanation:-
Answer: Option C. -> back flush costing
Answer: (c).back flush costing
Question 2. The stage in manufacturing cycle at which journal entries are made in system of accountancy is known as
  1.    chaining point
  2.    recording point
  3.    lead point
  4.    trigger point
Explanation:-
Answer: Option D. -> trigger point
Answer: (d).trigger point
Question 3. The decision model to calculate optimal quantity of inventory to be ordered is called
  1.    efficient order quantity
  2.    economic order quantity
  3.    rational order quantity
  4.    optimized order quantity
Explanation:-
Answer: Option B. -> economic order quantity
Answer: (b).economic order quantity
Question 4. If the required rate of return is 12% and the per unit cost of units purchased is $35, then the relevant opportunity cost of capital will be
  1.    $6.20
  2.    $7.20
  3.    $4.20
  4.    $5.20
Explanation:-
Answer: Option C. -> $4.20
Answer: (c).$4.20
Question 5. The method of costing that supports creation of value for customer by accounting whole value stream, rather than individual departments or products is classified as
  1.    economic accounting
  2.    back-flush accounting
  3.    lean accounting
  4.    lead accounting
Explanation:-
Answer: Option C. -> lean accounting
Answer: (c).lean accounting
Question 6. If the budgeted annual indirect cost is $60000, budgeted annual quantity of cost allocation base is $3600, then budgeted indirect cost rate will be
  1.    15.67 per piece
  2.    16.67 per piece
  3.    14.67 per piece
  4.    13.67 per piece
Explanation:-
Answer: Option B. -> 16.67 per piece
Answer: (b).16.67 per piece
Question 7. An under allocated indirect cost is also called
  1.    under applied indirect cost
  2.    under absorbed indirect cost
  3.    absorbed indirect cost
  4.    both a and b
Explanation:-
Answer: Option D. -> both a and b
Answer: (d).both a and b
Question 8. The total indirect cost in the pool by an actual quantity of cost allocation base, is used to calculate
  1.    actual manufacturing overhead rate
  2.    manufacturing overhead costs
  3.    overhead rate
  4.    direct rate
Explanation:-
Answer: Option A. -> actual manufacturing overhead rate
Answer: (a).actual manufacturing overhead rate
Question 9. A group of individual indirect cost item is defined as
  1.    direct pool
  2.    cost pool
  3.    indirect pool
  4.    item pool
Explanation:-
Answer: Option B. -> cost pool
Answer: (b).cost pool
Question 10. In normal costing, the situation in which the allocated amount of indirect cost is greater than the incurred cost, is considered as
  1.    incurred indirect cost
  2.    over allocated indirect cost
  3.    applied indirect cost
  4.    applied direct cost
Explanation:-
Answer: Option B. -> over allocated indirect cost
Answer: (b).over allocated indirect cost
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