Costing Objective Questions and Answers

1002. First in first out method of valuing material issues is suitable in times of . . . . . . . .

1003. Match the items of the following two lists:

List-I	List-II
a. Statement of changes in working capital	1. Cash flow statement
b. Deferred tax	2. Fixed assets
c. Three activities	3. Funds flow statement
d. Impairment loss	4. Balance sheet

A. a-1, b-2, c-3, d-4

B. a-3, b-4, c-2, d-1

C. a-3, b-4, c-1, d-2

D. a-4, b-3, c-1, d-2

Discussion

1004. Match the following.

List-I	List-II
a. Labour cost variance	1. Actual hours paid (Standard rate - Actual rate)
b. Labour rate variance	2. Standard cost - Actual cost
c. Efficiency variance	3. Idle hours × Standard rate per hour
d. Idle time variance	4. Standard rate (Standard hours - Actual hours worked)

A. a-4, b-3, c-2, d-1

B. a-2, b-3, c-4, d-1

C. a-4, b-1, c-2, d-3

D. a-2, b-1, c-4, d-3

Discussion

1005. . . . . . . . . is the value of a benefit where no actual cost is incurred.

1006. Overhead cost is the total of ________.

A. all indirect costs

B. all direct costs

C. indirect and direct costs

D. all specific costs

Discussion

1007. Assertion (A): From the marginal costing approach point of view, the marginal cost is compared with the purchase price.
Reason (R): If the marginal cost is less than the purchase price, it should be purchased rather than manufactured.

A. Both (A) and (R) are correct

B. (A) is correct, but (R) is incorrect

C. (A) is incorrect, but (R) is correct

D. Both (A) and (R) are incorrect

Discussion

1008. Estimation of cost functions, an ignoring information from all points but considering two observation points can be classified as

A. disadvantage of low high method

B. disadvantage of high low method

C. advantage of high low method

D. advantage of low high method

Discussion

Costing MCQs