Top 150+ Solved Cost Management MCQ Questions Answer
Q. Which of the following is true of standards?
a. Standards represent a benchmark or a norm
b. Standards relate to input quantity
c. Standards relate to input cost
d. All of the above
Q. Standards that can be attained only under the best circumstances are referred to as:
a. Attainable standards
b. Budget standards
c. Ideal standards
d. Practical standards
Q. Which of the following equations can be used to calculate a material price variance?
a. (AQ X AP) – (AQ X SP)
b. (AP X SP) – (AQ X SP)
c. (AQ X SP) – (SQ X SP)
d. (AQ X SP) – (AQ X AP)
Q. Who is most likely to be held responsible for a material price variance?
a. Line workers
b. Production supervisors
c. Purchasing managers
d. Production schedulers
Q. Which of the following equations can be used to calculate a material quantity variance?
a. (AQ X AP) – (AQ X SP)
b. (AP X SP) – (AQ X SP)
c. (AQ X SP) – (SQ X SP)
d. (AQ X SP) – (AQ X AP)
Q. To produce a particular batch of product, Falcon Corporation paid its workers 12.00 per hour for 4,000hours of work. The standards for the quantity of work represented by the batch were 12.50 per hour and 4,400 hours. What was the labour efficiency variance?
a. 2,000.00 favourable
b. 5,000.00 favourable
c. 5,000.00 unfavourable
d. None of these
Q. The firm’s direct-labour rate variance was 4,800 unfavourable. Actual labour was 24,000 direct-labourhours, at a cost of 1,68,000, for 25,000 units of finished product that require 1 hour of direct labour each, at standard. What is the standard rate per direct-labour hour?
a. 7.20
b. 6.80
c. 7.00
d. Cannot be determined from the information given
Q. Which of the following is not an advantage of standard costing?
a. It provides a basis for sensible cost comparisons
b. It enables managers to employ management by exception
c. It provides a mean of performance evaluation and employee rewards
d. It is usually less expensive than actual or normal costing
Q. Which of the following is NOT a criticism of a standard-costing system?
a. It is more expensive than other systems
b. Variances calculated under standard-costing come too late to be useful
c. It can cause dysfunctional behaviour in a JIT/FMS environment
d. Traditional cost variances are not tied to specific product line
Q. The organization budgeted 400,000 for 40,000 hours of direct labour to complete 16,000 units offinished product. The firm used 42,000 direct-labour hours and completed 17,000 units of finished product. What is the direct-labour rate variance?
a. 20,000 unfavourable
b. 25,000 favourable
c. 25,000 unfavourable
d. Cannot be determined from the information provided
Q. The monetary value attributed to normal losses in a process should be:
a. A share of the process cost according to the stage of completion of the losses.
b. A nil value with no other monetary adjustment under any circumstances.
c. A full share of process cost on the same as good output.
d. A nil share of process costs which have been reduced by the scrap value of the normal loss.
Q. An abnormal gain in a process occurs in which of the following situations?
a. When actual losses are greater than the normal loss level.
b. When costs are reduced through increased machine speed.
c. When actual losses are less than the normal level.
d. When the process output is greater than planne
Q. Where process scrap is recycled for use in conjunction with new material as well as being so externally, which of the following is most likely to be the value at which is debited to the process?
a. At the same price as it sold externally
b. At the cost of normal losses.
c. At the cost attached to abnormal losses
d. Nil value.
Q. Marginal Costing is concerned with:
a. Fixed Costs
b. Variable Costs
c. Semi-fixed Costs
d. None of the above three
Q. A biscuit manufacturing concern employs:
a. Operating costing
b. Departmental Costing
c. Batch Costing
d. Contract Costing