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 7 of 17

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Q61.
An average inventory in units is multiplied with annual relevant carrying cost of each unit to calculate

a.

annual irrelevant ordering costs

b.

annual relevant carrying costs

c.

annual relevant ordering costs

d.

annual irrelevant carrying costs

Discuss
Answer: (b).annual relevant carrying costs
Q62.
A push through system, according to which goods are manufactured for finished inventory solely, on the basis of forecasted demand can be classified as

a.

in-time production

b.

materials requirement planning

c.

on-time production

d.

pull strategy of production

Discuss
Answer: (b).materials requirement planning
Q63.
The relevant incremental costs are added into the relevant opportunity cost of capital to calculate

a.

purchase order costs

b.

relevant inventory carrying costs

c.

irrelevant inventory carrying costs

d.

relevant ordering costs

Discuss
Answer: (b).relevant inventory carrying costs
Q64.
If the economic order quantity for one year is 15000 packages and demand in units for one year are 1500 units, then number of deliveries in a year will be

a.

16

b.

12

c.

10

d.

14

Discuss
Answer: (c).10
Q65.
The number of purchase orders for each year is multiplied to relevant ordering cost for each purchase order to calculate

a.

annual irrelevant ordering costs

b.

annual relevant carrying costs

c.

annual relevant ordering costs

d.

annual irrelevant carrying costs

Discuss
Answer: (c).annual relevant ordering costs
Q66.
The costing system, which omits some of the journal entries in accounting system is known as

a.

in-time costing

b.

trigger costing

c.

back flush costing

d.

lead time costing

Discuss
Answer: (c).back flush costing
Q67.
The decision model to calculate optimal quantity of inventory to be ordered is called

a.

efficient order quantity

b.

economic order quantity

c.

rational order quantity

d.

optimized order quantity

Discuss
Answer: (b).economic order quantity
Q68.
The stage in manufacturing cycle at which journal entries are made in system of accountancy is known as

a.

chaining point

b.

recording point

c.

lead point

d.

trigger point

Discuss
Answer: (d).trigger point
Q69.
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

a.

$6.20

b.

$7.20

c.

$4.20

d.

$5.20

Discuss
Answer: (c).$4.20
Q70.
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

a.

economic accounting

b.

back-flush accounting

c.

lean accounting

d.

lead accounting

Discuss
Answer: (c).lean accounting
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