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 6 of 17

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Q51.
The required rate of return, is multiplied per unit cost of purchased units to calculate

a.

irrelevant inventory carrying costs

b.

relevant opportunity cost of capital

c.

relevant purchase order costs

d.

relevant inventory carrying costs

Discuss
Answer: (b).relevant opportunity cost of capital
Q52.
An ability of an accounting system, to point out the use of resources in every step of production process is called

a.

back-flush trails

b.

audit trails

c.

trigger trails

d.

lead manufacturing trails

Discuss
Answer: (b).audit trails
Q53.
The systematic flow of services, goods or information from the buying material for product delivery to the customers is known as

a.

supply chain

b.

value chain

c.

material flow chain

d.

manufacturing flow chain

Discuss
Answer: (a).supply chain
Q54.
The costs associated with storage of finished goods such as spoilage, obsolescence and insurance of goods are classified as

a.

carrying costs

b.

purchasing costs

c.

stock-out costs

d.

ordering costs

Discuss
Answer: (a).carrying costs
Q55.
The costs of goods acquired from suppliers are classified as

a.

stock-out costs

b.

ordering costs

c.

carrying costs

d.

purchasing costs

Discuss
Answer: (d).purchasing costs
Q56.
If the demand in units are 18000, relevant ordering cost for each year is $150 and an order quantity is 1500, then annual relevant ordering cost would be

a.

$200

b.

$190

c.

$160

d.

$180

Discuss
Answer: (d).$180
Q57.
If the relevant opportunity cost of capital is $2950 and the relevant carrying cost of inventory is $6700, then the relevant incremental cost will be

a.

$9,650

b.

$2,350

c.

$3,750

d.

$2,750

Discuss
Answer: (c).$3,750
Q58.
The profit forgone by capital investment in inventory rather than investment of capital to somewhere else is classified as

a.

relevant purchase order costs

b.

relevant inventory carrying costs

c.

irrelevant inventory carrying costs

d.

relevant opportunity cost of capital

Discuss
Answer: (d).relevant opportunity cost of capital
Q59.
An example of shrinkage costs is

a.

incoming freight

b.

storage costs

c.

insurance

d.

clerical errors

Discuss
Answer: (d).clerical errors
Q60.
If the relevant incremental costs are $5000 and the relevant opportunity cost of invested capital is $2500, then the relevant inventory carrying costs would be

a.

$7,500

b.

$7,000

c.

$6,500

d.

$6,000

Discuss
Answer: (a).$7,500
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