Cost & Management Accounting: 16 MCQs with Explanations

Overhead cost is the total of all indirect costs. .

One of the most important tools in cost planning is Budget .

18,387 is the correct answer to “A Ltd. Has sales of 2,200, total fixed cost of 570, variable cost of 1,540, raw material consumed of ` 1,100, number of units sold 22,000. What shall be the BEP 9 in units) if raw material price is reduced by 2%”. Items of this type are drawn from the Cost & Management Accounting syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Direct cost incurred can be identified with Each unit of output .

An average cost is also known as Unit cost .

Costs that change in response to alternative courses of action are called Differential costs .

The total cost incurred in the operation of a business undertaking other than the cost of manufacturing and production is known as Commercial cost .

Crane value is the correct answer to “Which of the following bases is not appropriate for apportionment of Transport departments cost”. Items of this type are drawn from the Cost & Management Accounting syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Sunk cost is the correct answer to “The cost of obsolete inventory acquired several years ago, to be considered in a keep vs. disposal decision is an example of:”. Items of this type are drawn from the Cost & Management Accounting syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Interest Rate is the correct answer to “The compensation paid by the borrower of fund to lender, from the borrower point of the cost of borrowing fund is called”. Items of this type are drawn from the Cost & Management Accounting syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Conversion cost is the cost of converting raw material into finished products.

selling Expenses & administrative expenses is the correct answer to “Period cost include which of the following”. Items of this type are drawn from the Cost & Management Accounting syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Cost of goods sold excludes Postage & Stamps .

The portion of the acquisition cost of the asset yet to be allocated is known as Written down value .

Straight-line method is the correct answer to “In which of the following methods, the cost of the asset is spread over in equal proportion during its useful economic life”. Items of this type are drawn from the Cost & Management Accounting syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Inventories is the correct answer to “Which of the following assets is/are to be valued at the lower of cost and net realizable value”. Items of this type are drawn from the Cost & Management Accounting syllabus of Pakistani competitive exams, where the fact is tested verbatim.