MCQ on Overview of Cost | Corporate and Management Accounting MCQs for CS Executive and Other Competitive Exams | Commerce Classes

MCQ on Overview of Cost: Check the below Corporate and Management Accounting MCQ on Overview of Cost with Answers Pdf free download. Corporate and Management Accounting MCQ on Overview of Cost Questions for Corporate and Management Accounting with Answers were prepared based on the latest exam pattern. We have provided Corporate and Management Accounting MCQ on Overview of Cost with Answers to help students understand the concept very well. Students should practice CS Executive MCQ on Overview of Cost Questions with Answers based on the latest syllabus.

MCQ on Overview of Cost


1. The cost of selecting one course of action and forgoing the other is known as
(A) Sunk cost
(B) Differential cost
(C) Opportunity cost
(D) Joint cost

View Answer

(C) Opportunity cost


2. The cost that increases as the volume of activity decreases within the relevant range, is known as
(A) Average cost per unit
(B) Average variable cost per unit
(C) Total fixed cost
(D) Total variable cost

View Answer

(A) Average cost per unit


3. Expenditure on labour and materials that cannot be economically identified with a specific saleable cost unit is known as:
(A) Prime cost
(B) Overheads
(C) Direct cost
(D) Abnormal loss

View Answer

(B) Overheads


4. Which of the following is not an objective of management accounting ?
(A) Formulation of plans and policy
(B) Assisting in decision making
(C) Preparation of financial statements
(D) Interpretation of financial documents

View Answer

(C) Preparation of financial statements


5. The term used for process of ascertaining the cost’ is known as
(A) Cost
(B) Costing
(C) Cost accounting
(D) Cost accountancy

View Answer

(B) Costing


6. The establishment of budgets, standard costs and actual costs of operations, processes, activities or products and the analysis of variances, profitability or the social use of funds is known as
(A) Costing
(B) Cost Accounting
(C) Cost Accountancy
(D) Financial Accounting

View Answer

(B) Cost Accounting


7. Which element of the total cost is common in prime cost and conversion cost ?
(A) Variable overheads
(B) Fixed overheads
(C) Direct materials
(D) Direct labour

View Answer

(D) Direct labour


8. Costs that are constant for a given level of output and then increase by a fixed amount at a higher level of output are called _____.
(A) Step costs
(B) Differential costs
(C) Committed costs
(D) Opportunity costs

View Answer

(A) Step costs


9. Relevant costs are
(A) Future costs
(B) Standard costs
(C) Controllable costs
(D) Historical costs

View Answer

(A) Future costs


10. Which of the following is not considered as a function of management accounting?
(A) Financial planning
(B) Decision making
(C) Reporting
(D) Cost computation

View Answer

(B) Decision making


11. Interest on internally generated funds is an example of
(A) Differential cost
(B) Joint cost
(C) Common cost
(D) Imputed cost

View Answer

(D) Imputed cost


12. Which of the following is known as full costing ?
(A) Variable costing
(B) Differential costing
(C) Marginal costing
(D) Absorption costing

View Answer

(D) Absorption costing


13. Sunk costs are____
(A) Opportunity costs
(B) Costs to be incurred in future
(C) Not relevant for decision making
(D) Controllable costs

View Answer

(C) Not relevant for decision making


14. According to Section 2(13) of the Companies Act, 2013, ‘books of account’ does not require maintenance of which of the following records
(A) All sums of money received and expended by a company and matters in relation to which the receipts and expenditure take place
(B) All sales and purchases of goods and services by the company
(C) The assets and liabilities of the company
(D) Cash flow statement

View Answer

(D) Cash flow statement


15. For a manufacturing company, which of the following is an example of period cost rather than a product cost
(A) Depreciation on factory equipment
(B) Commission to the salesman
(C) Wages of machine operator
(D) Insurance on factory equipment

View Answer

(D) Insurance on factory equipment


16. Fixed cost is a cost ____
(A) Which remains fixed for each unit ‘ of output
(B) Which remains fixed in total during a given period despite changes in output
(C) Which is partly fixed and partly variable in relation to the output
(D) Which changes in total in proportion to the changes in output

View Answer

(B) Which remains fixed in total during a given period despite changes in output


17. Management accounting is basically concerned with
(A) The problem of choice
(B) The Causative relationship
(C) Recording of transaction
(D) Both (A) and (B) above

View Answer

(D) Both (A) and (B) above


18. Cost accounting is
(A) Nothing more than a detailed analysis of expenditure
(B) An instrument of management control
(C) Useful only in such organization which has profit as the aim
(D) Not needed if prices are beyond the control of the firm

View Answer

(B) An instrument of management control


19. Conversion cost is the summation of
(A) Direct material and direct wages
(B) Direct wages and office over-heads
(C) Direct wages, direct charges and works overheads
(D) None of the above

View Answer

(C) Direct wages, direct charges and works overheads


20. A cost centre that is engaged in production activity by conversion of raw material into a finished product is called ______.
(A) Production cost centre
(B) Impersonal cost centre
(C) Process cost centre
(D) Production unit

View Answer

(A) Production cost centre


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