Cost and Management Accounting Multiple Choice Questions#5

NOTE: Attempt all Questions to see the Result at the bottom of this page.

  1. 1)

    Which of these is not an objective of Cost Accounting?

    • A) Ascertainment of Cost
    • B) Determination of Selling Price
    • C) Cost Control and Cost reduction
    • D) Assisting Shareholders in decision making

  2. 2)

    A profit centre is a centre

    • A) Where the manager has the responsibility of generating and maximising profits
    • B) Which is concerned with earning an adequate Return on Investment
    • C) Both of the above
    • D) Which manages cost

  3. 3)

    Responsibility Centre can be categorised into:

    • A) Cost Centres only
    • B) Profit Centres only
    • C) Investment Centres only
    • D) Cost Centres, Profit Centres and Investment Centres

  4. 4)

    Cost Unit is defined as:

    • A) Unit of quantity of product, service or time in relation to which costs may be ascertained or expressed
    • B) A location, person or an item of equipment or a group of these for which costs are ascertained and used for cost control.

    • C) Centres having the responsibility of generating and maximising profits
    • D) Centres concerned with earning an adequate return on investment

  5. 5)

    Fixed cost is a cost:

    • A) Which changes in total in proportion to changes in output
    • B) which is partly fixed and partly variable in relation to output
    • C) Which do not change in total during a given period despise changes in output
    • D) which remains same for each unit of output

  6. 6)

    Uncontrollable costs are the costs which be influenced by the action of a specified member of an undertaking.

    • A) can not
    • B) can
    • C) may or may not
    • D) must

  7. 7)

    Element/s of Cost of a product are:

    • A) Material only
    • B) Labour only
    • C) Expenses only
    • D) Material, Labour and expenses

  8. 8)

    Abnormal cost is the cost:

    • A) Cost normally incurred at a given level of output
    • B) Cost not normally incurred at a given level of output
    • C) Cost which is charged to customer
    • D) Cost which is included in the cost of the product

  9. 9)

    Conversion cost includes cost of converting……….into……..

    • A) Raw material, WIP
    • B) Raw material, Finished goods
    • C) WIP, Finished goods
    • D) Finished goods, Saleable goods

  10. 10)

    Sunk costs are:

    • A) relevant for decision making
    • B) Not relevant for decision making
    • C) cost to be incurred in future
    • D) future costs