Costing Methods MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Costing Methods, a fundamental topic in the field of Cost Accounting. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Costing Methods MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of Costing Methods mcq questions that explore various aspects of Costing Methods problems. Each MCQ is crafted to challenge your understanding of Costing Methods principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace Cost Accounting tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Costing Methods MCQs are your pathway to success in mastering this essential Cost Accounting topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Costing Methods. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your Costing Methods knowledge to the test? Let's get started with our carefully curated MCQs!

Costing Methods MCQs | Page 2 of 17

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Q11.
The cost pool category, which have the similar cause and effect relationship, with each cost driver uses as an allocation base is classified as

a.

heterogeneous price pool

b.

homogenous cost pool

c.

heterogeneous cost pool

d.

homogenous price pool

Discuss
Answer: (b).homogenous cost pool
Q12.
In the activity based costing method implementation, the indirect costs are allocated by using the

a.

no cost pool

b.

One or two cost pools

c.

sustained tracing

d.

support tracing

Discuss
Answer: (b).One or two cost pools
Q13.
The costing system, in which individual activities are identified as the cost object, is considered as

a.

manufactured costing

b.

activity based costing

c.

allocation costing

d.

base costing

Discuss
Answer: (b).activity based costing
Q14.
The type of costs that cannot be traced for individual products but help in supporting an organization are classified as

a.

individual sustaining costs

b.

facility sustaining costs

c.

sustained tracing

d.

support tracing

Discuss
Answer: (b).facility sustaining costs
Q15.
In the activity based costing method implementation, an output unit level costs are classified as

a.

indirect costs

b.

direct cost

c.

labor cost

d.

raw material cost

Discuss
Answer: (a).indirect costs
Q16.
The hierarchy which is based on different types of cost allocation and drivers, to categorize cost pool activity is classified as

a.

cost hierarchy

b.

price hierarchy

c.

activity hierarchy

d.

purpose hierarchy

Discuss
Answer: (a).cost hierarchy
Q17.
The product which requires large amount of resources, but incur low per unit cost is classified as

a.

product under costing

b.

product over costing

c.

expected under cost

d.

expected over cost

Discuss
Answer: (a).product under costing
Q18.
The costs of undertaken activities is to support individual products and are known as

a.

expected sustaining

b.

input sustaining

c.

output sustaining

d.

product sustaining costs

Discuss
Answer: (d).product sustaining costs
Q19.
If the net initial investment is $985000, returned working capital is $7500, then an average investment over five years will be

a.

$596,300

b.

$485,300

c.

$496,250

d.

$486,250

Discuss
Answer: (c).$496,250
Q20.
If an initial investment is $765000, the payback period is 4.5 years, then increase in future cash flow will be

a.

$5,645,000

b.

$6,442,500

c.

$3,442,500

d.

$5,442,500

Discuss
Answer: (c).$3,442,500
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