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1. Profit remaining as reserve is __
(a) Transferred to Profit and loss a/c
(b) Deducted from W.I.P
(c)Not taken to account in cost
(d) Debited to cost price of contract
ANS: B
2. Cost of a contract is determined by
preparing ___
(a)Cost Sheet
(b) Profit and loss a/c
(c) Balance Sheet
(d)Separate ledger a/c
ANS: A
3. In Contract costing , loss of material by
fire is debited to __
(a) Costing P & L a/c
(b) Financial P & L a/c
(c) Contract a/c
(d) Contractee a/c
ANS: C
4. Retention money is equal to ___
(a) Work Certified -- work Uncertified
(b)Contract price -- Work Certified
(c) Work Certified – payment received by contractor
(d) Contract price + Work
Certified
ANS: C
5. Material supplied to site is debited to
(a)Contract a/c
(b) Contractor’s Account
(c) Contractee a/c
(d) Material Control a/c
ANS: D
6. Cost of rectification of defective work is
(a) Debited to contract A/c
(b) Credited to contract A/c
(c) Ignored from contract A/c
(d) Debited to P&L A/c
ANS: C
7. Sub-contract cost is debited to
(a) Contract A/c
(b) Sub-contract A/c
(c) Contractee A/c
(d) contractor A/c
ANS: A
8. The Degree of Work completed is determined
by comparing work certified with
(a) Contract price
(b) WIP
(c) Cash received on contract
(d) Retention money
ANS: A
9. __ may be favourable or unfavourable in
standard costing
(a) Variance
(b)Standard
(c) Contribution
(d)Forecast Cost
ANS: C
10. The standard Costing contains quantities
and cost for ___
(a) Direct material only
(b)Direct material and Direct Labour only
(c) Direct Labour only
(d) Direct material , Direct Labour and Overhead
ANS: D
11. Material Cost Variance is non controllable
when it arises due to ___.
(a) Change in quantity
(b) Change in wastage
(c) Change in tax rate
(d) Change in quantity
ANS: B
12. Labour Cost variance is ____.
(a) SLH-ALH
(b) SLR-ALR
(c) Std. cost – Actual cost
(d) SCSLM-SCALM
ANS: B
13. Labour rate standard is decided by ___.
(a) HR department
(b) Purchase department
(c) sales department
(d) production department
ANS: D
14. Normal loss is calculated at a certain percentage
of
(a) Units introduced in the process
(b) Cost of input
(c) Direct materials
(d) Direct labor
ANS: B
15. After adjustment of scrap value, balance of
abnormal loss A/c is transferred to
(a) Balance sheet
(b) Costing P & L A/c
(c) Process A/c
(d) Contract Account
ANS: B
16. Process costing is applicable to
(a) Paper industry
(b) Printing press
(c) Transport company
(d) Repair works
ANS: B
17. The product which has a lower sale value
than the main product is a
(a) Joint product
(b) By –product
(c) Economic product
(d) Consumer product
ANS: D
18. Which of the following does not use process
costing
(a) Oil Refining
(b) Distilleries
(c) Sugar
(d) Air-craft Manufacturing
ANS: D
19. When production is below standard
specification or quality and cannot be rectified by incurringadditional cost,
it is called
(a) Defective
(b) Spoilage
(c) Waste
(d) Scrap
ANS: B
20. Joint cost are allocated according to sales
value of individual products under-
(a) Market Value Method
(b) Average Unit Cost Method
(c) Survey Method
(d) Physical Unit Method
ANS: A
21. To obtain break even point in rupees, total
fixed cost is divided by
(a) Variable cost per unit
(b) Fixed cost per unit
(c) Contribution per unit
(d) P/V ratio
ANS: B
22. BEP is
(a) Profit/P/V Ratio
(b) Variable cost/ P/V Ratio
(c) Fixed cost/ P/V Ratio
(d) Sales /P/V Ratio
ANS: C
23. Cost-volume-profit analysis is used
PRIMARILY by management:
(a) as a planning tool
(b) for control purposes
(c) to prepare external financial statements
(d) for correct financial results
ANS: A
24. When fixed cost increases, the break even
point
(a) Increases
(b) Decreases
(c) No effect
(d) Fixed
ANS: A
25. The sales volume in value required to earn
the target profit, the formula is
(a) Target profit / Contribution per unit
(b) (Fixed cost + Target profit) x P/V ratio
(c) (Fixed cost + Target profit) x Contribution on per unit
(d) (Fixed cost + Target profit) x PV ratio
ANS: D
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