Top 150+ Solved Cost and Works Accounting 2 MCQ Questions Answer
Q. Identify the circumstances where under- or over-recovery of overhead will occur:
a. Actual overhead costs are different from budgeted overheads
b. The actual activity level is different from the budgeted activity level
c. Actual overhead costs and actual activity level differ from the budgeted costs and level
d. All of the above
Q. Variable overhead is overhead that increases as more production work is done.Total variable overhead expenditure therefore depends on the volume of production. Variable overhead is usually calculated as an amount for each direct labour hour worked.
a. The above statement is correct
b. The above statement is incorrect
c. none
d. none
Q. The loss incurred on an incomplete contract is transferred to …………….account.
a. Costing profit and loss account
b. profit and loss account
c. trading account
d. deferred to next year.
Q. When the completion stage of the contract is more than half, the profit to be creditedto Profit and Loss account will be equal to…………..
a. 1/3rd of Notional Profit x cash received Work certified
b. ½ of Notional Profit x cash received Work certified
c. 2/3rd of Notional profit x cash received Work certified
d. full Notional Profit.
Q. If the amount of work certified is less than………of the contract price,then no profitshould be taken to Profit & Loss Account.
a. 20%
b. 25%
c. 33 1/3%
d. 40%
Q. Contract costing is not used in one of the following industries.
a. Ship building
b. Civil Construction
c. Automobiles
d. Construction of Bridges
Q. The sum of value of work certified and uncertified appearing in the Contract Accountis called ……………..
a. Work done.
b. Work in Process
c. Work Completed
d. Work in Progress
Q. Total costs incur in a production process, is divided by total number of output units tocalculate the
a. unit costs
b. cost of direct material
c. cost of direct labour
d. cost of indirect labour
Q. WIP in contract means:
a. Work certified
b. Work certified and work uncertified
c. Cash received
d. None of these
Q. Profit remaining as reserve is :
a. Transfer to p/L
b. Deducted from WIP
c. Not taken into account.
d. Deducted from cost of the contract.
Q. Profit in incomplete contract in known as notional profit because:
a. It is not real profits
b. Real profit is ascertain when the contract is complete
c. There is no such incomplete contract.
d. The profit is only an approximation.
Q. The contract undertaken are completed away from the ………………premises.
a. Contractors
b. Contractee
c. Party
d. Builder