Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Costing Total Number of Question: 40 Time: 41 Minutes All the best... Kind Regards CMA Madhuri Kashyap Profile: Click Here! Name Phone No Email Area Pincode 1. What is the main purpose of cost accounting? To calculate profits To determine costs for production and service To manage taxes To evaluate marketing strategies None 2. Which of the following is a variable cost? Rent Salary of employees Raw materials Depreciation None 3. Which costing method is used to determine the cost of each unit in a batch of products? Job order costing Process costing Activity-based costing Batch costing None 4. Which of the following is a component of prime cost? Indirect labor Direct materials Depreciation Factory rent None 5. In marginal costing, fixed costs are: Treated as product costs Treated as period costs Ignored Always variable None 6. The break-even point is reached when: Total revenue equals total variable costs Total fixed costs are covered Total revenue equals total costs Profit equals fixed costs None 7. In absorption costing, fixed overhead costs are: Charged to the profit and loss account immediately Treated as period costs Allocated to the cost of goods produced Only included in the cost of goods sold None 8. In marginal costing, fixed costs are treated as: Product costs Period costs Opportunity costs Direct costs None 9. Contribution margin is calculated as: Sales - Fixed costs Sales - Variable costs Sales - Total costs Fixed costs + Profit None 10. Which of the following is an example of direct labor cost? Wages of factory managers Wages of workers on the production line Wages of workers in the warehouse Salaries of office clerks None 11. Activity-based costing assigns overhead costs based on: The volume of production The activities that drive costs The number of employees The type of product None 12. A process cost system is used when: Products are customized Products are mass-produced Products are in a job order system Products are not identical None 13. The total cost of production consists of: Fixed cost only Variable cost only Fixed cost and variable cost Prime cost only None 14. A sunk cost refers to: An avoidable cost An irrelevant cost for decision-making An incremental cost A future cost None 15. Which of the following is an example of a semi-variable cost? Electricity cost Rent Salaries of staff Commission on sales None 16. Which of the following is a characteristic of job order costing? Costs are averaged across all units produced Each job or batch is treated separately It is used for continuous production processes It does not assign overheads None 17. Which of the following statements is true about fixed costs? They change in direct proportion to changes in production volume They remain constant over a wide range of production levels They are associated with variable costs They increase with production volume None 18. Which of the following is a direct cost? Supervisor’s Salary Factory Rent Direct Materials Electricity Expenses None 19. Absorption costing includes: Only variable costs Only fixed costs Both fixed and variable costs Direct costs only None 20. In absorption costing, overhead is applied based on: Direct materials Direct labor hours Contribution margin Selling price None 21. The cost of goods sold is calculated by: Adding all production costs together Subtracting fixed costs from total costs Subtracting inventory from sales Adding direct materials and direct labor costs None 22. The purpose of cost allocation is to: Separate fixed and variable costs Assign indirect costs to cost objects Calculate taxes Determine profit margins None 23. A cost that varies with the number of units produced is called: Variable cost Fixed cost Mixed cost Semi-variable cost None 24. Which method of costing is most appropriate for a company that manufactures identical products in large quantities? Process costing Job order costing Activity-based costing Standard costing None 25. The total cost of an item includes: Only fixed costs Only variable costs Direct costs and indirect costs Only indirect costs None 26. Which of the following costs is likely to be a direct cost? Rent of factory Factory electricity bill Direct labor wages Administrative salaries None 27. In job order costing, overhead is applied to a job based on: Predetermined overhead rate Direct labor cost Total production cost Actual costs None 28. The total contribution margin is calculated as: Revenue – Fixed costs Sales – Total costs Sales – Variable costs Sales – Selling expenses None 29. Which of the following is not a component of manufacturing overhead? Factory rent Depreciation of machinery Wages of assembly workers Utilities for the factory None 30. Which method of costing uses a predetermined overhead rate? Process costing Job order costing Direct costing Standard costing None 31. A cost that remains the same in total regardless of the level of production is: Variable cost Fixed cost Semi-variable cost Direct cost None 32. A mixed cost is: Only variable Only fixed A combination of fixed and variable costs Not related to production levels None 33. Which of the following is a typical example of a variable cost? Depreciation of machinery Factory rent Sales commissions Salaries of factory supervisors None 34. In which of the following situations would a company use process costing? Custom furniture production Assembly line production Construction projects Consulting services None 35. Which of the following is a characteristic of activity-based costing? It assigns overhead costs to products based on the activities that drive those costs It ignores indirect costs It only applies to large businesses It uses a single overhead rate for all products None 36. Under absorption costing, fixed manufacturing overhead is: Excluded from the cost of goods sold Included in the cost of goods sold Treated as a period cost Treated as a variable cost None 37. What does a cost-volume-profit (CVP) analysis primarily help managers determine? Profit levels at different levels of sales Optimal sales price Costs for direct materials only Break-even analysis for investment None 38. The relevant range is: The range of sales prices for which a company operates The range within which total costs will change The range within which fixed costs remain constant The total range of production capacity None 39. Standard costing is most useful for: Companies that produce a variety of customized products Monitoring actual costs against predetermined costs Determining fixed costs Companies using job order costing None 40. The cost of labor that cannot be traced directly to a product is classified as: Direct labor Indirect labor Overhead Prime cost None 1 out of 4 Great job on taking the INCOC Test! We appreciate your interest in test. Look out for results and future opportunities. Stay Connected !! Your quiz time is about to finish. Few seconds left. Time's upYou cannot switch tabs while taking this quiz!You are not allowed to switch tabs violation has been recorded.you cannot minimize full screen mode!You are not allowed to minimize full screen while taking this quiz, violation has been recorded.Access denied! To begin the quiz, please grant this quiz access to your camera.Time is Up!Time is Up!
