Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Cost Accounting Total Number of Question: 40 Time: 41 Minutes Please check your email after completion of test for result. All the best... Name Phone No Email State 1. Which of the following is a method for dealing with under-absorbed or overabsorbed overheads? Carrying forward to the next year Ignoring the difference Charging it to profit and loss account Allocating it among the customers None 2. Which of the following is the primary objective of cost accounting? Profit calculation Tax assessment Cost ascertainment and control Asset valuation None 3. Which variance occurs due to the difference between the actual and standard rate of wages? Labour efficiency variance Labour rate variance Material price variance Overhead volume variance None 4. Which type of costing method would be suitable for an oil refinery? Job costing Contract costing Process costing Batch costing None 5. Which of the following costs does not change with an increase or decrease in the level of activity? Variable cost Fixed cost Semi-variable cost Marginal cost None 6. Contribution margin is also known as: Gross profit Net profit Variable profit Answer: Marginal prof None 7. The formula for calculating profit-volume (P/V) ratio is: (Contribution / Sales) x 100 (Net Profit / Sales) x 100 (Fixed Cost / Sales) x 100 (Total Cost / Sales) x 100 None 8. Fixed overhead expenditure variance is calculated as the difference between: Actual overheads and absorbed overheads Budgeted overheads and actual overheads Actual costs and standard costs Variable costs and fixed costs None 9. Which of the following costs are considered when calculating the break-even point? Only fixed costs Only variable costs Fixed and variable costs Sunk costs None 10. Which costing system is used to assign costs to products that are similar but not identical? Process costing Job costing Batch costing Contract costing None 11. Which of the following is true regarding fixed costs? They increase with production volume They remain constant in total regardless of output They vary directly with sales volume They are irrelevant for break-even analysis None 12. Absorption costing treats fixed manufacturing overheads as Product costs Period costs Variable costs Sunk costs None 13. Which of the following describes conversion cost? Direct Material + Direct Labour Direct Labour + Overheads Prime Cost + Fixed Cost Indirect Material + Indirect Labour None 14. The cost of idle time caused by machinery breakdown should be treated as: Direct cost Indirect cost Sunk cost Opportunity cost None 15. The difference between sales revenue and variable cost is called: Gross profit Contribution Net profit Overhead None 16. Which of the following is used to calculate the fixed overhead absorption rate? (Total Fixed Overheads / Direct Material Cost) (Total Fixed Overheads / Direct Labour Hours) (Total Fixed Overheads / Machine Hours) (Total Fixed Overheads / Units Produced) None 17. If a company has under-absorbed overheads, it means: Actual overheads are less than absorbed overheads Actual overheads are more than absorbed overheads Overheads have been fully absorbed No overheads have been absorbed None 18. Which type of cost will change as production levels change? Fixed cost Variable cost Sunk cost Committed cost None 19. In contract costing, which of the following is deducted from the contract price to determine the profit on incomplete contracts? Direct expenses Contract value Work certified Retention money None 20. Which of the following is an indirect material cost? Steel used in manufacturing Lubricant used for machines Timber used for furniture Cloth used for garments None 21. Which costing technique aims at reducing costs by improving efficiency? Absorption costing Marginal costing Standard costing Batch costing None 22. The cost of abnormal loss in process costing is: Charged to production overhead Added to the cost of normal production Transferred to a cost of profit and loss account Allocated to the next process None 23. Which of the following is true regarding job costing? It is suitable for identical units produced continuously Costs are accumulated for each job separately It cannot be used in construction projects Overheads are not allocated in job costing None 24. Fixed overhead efficiency variance arises due to: Difference in actual and budgeted overheads Difference between actual and standard output Change in rate of wages Variation in sales price None 25. A by-product is defined as: A primary product of a process An insignificant product obtained during the manufacture of the main product A major source of revenue A direct expense None 26. Which of the following best defines 'absorption'? Charging all costs to a profit and loss account Allocating direct costs to specific units Charging overheads to individual units of production Ignoring fixed costs in costing None 27. Break-even analysis helps to determine: Total profit Total cost The point where total revenue equals total cost Variable costs None 28. Which of the following costs is used to calculate the contribution margin? Fixed costs Variable costs Semi-variable costs Sunk costs None 29. Which of the following is a method of apportioning service department costs? Direct labour hour method Step-down method Sunk cost method Job costing method None 30. The margin of safety can be increased by: Increasing fixed costs Reducing the selling price Increasing sales volume Increasing variable costs None 31. Which of the following best describes controllable costs? Costs that cannot be influenced by any manager Costs that can be influenced by the action of a specified manager Fixed costs only Variable costs only None 32. Which of the following is not included in the cost of production? Direct materials Direct labour Selling and distribution expenses Factory overheads None 33. The total of direct materials, direct labour, and direct expenses is known as: Conversion cost Prime cost Factory cost Total cost None 34. Which of the following is true about process costing? It accumulates costs by individual jobs It is suitable for industries with continuous production It is only applicable for small-scale businesses It does not consider overheads None 35. The difference between actual fixed overhead and the amount that should have been absorbed is known as: Fixed overhead expenditure variance Fixed overhead volume variance Efficiency varianc Sales variance None 36. In absorption costing, closing inventory is valued using: Only fixed costs Only variable costs Both fixed and variable costs Contribution margin None 37. Which of the following methods can be used to value work in progress in process costing? FIFO LIFO Weighted average All of the above None 38. The purpose of calculating a cost of quality is to: Determine the direct costs of materials Minimize the overall costs of quality-related activities Allocate fixed overheads Establish selling price None 39. In cost accounting, a budget that is prepared for various levels of activity is called: Fixed budget Flexible budget Master budget Capital budget None 40. A cost that does not change with the level of production or sales is known as: Variable cost Fixed cost Marginal cost Direct 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. 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