Quiz  /  Cost concept Class 12 MCQ Questions With Answers

  • 1. 
    A person using his own capital in business is an e.g of

  • implicit cost
  • explicit cost

  • 2. 
    The MC curve cuts AC at its

  • highest point
  • minimum point

  • 3. 
    Change in cost is

  • MC
  • AC

  • 4. 
    Raw materials that can be conveniently and directly associated with a finished product are called materials overhead.

  • TRUE
  • FALSE

  • 5. 
    The costs that are reported as expenses in the Statement of Comprehensive Income when they are incurred.

  • Product costs
  • Operating expenses
  • Period costs
  • Manufacturing costs

  • 6. 
    Fixed costs ..-

  • Increase in total with the increase in production
  • Decrease per unit with the increase in production
  • Increase per unit with the increase in production
  • Decrease in total with the decrease in production

  • 7. 
    Which of the following is not a manufacturing cost category?

  • Cost of goods sold
  • Direct materials
  • Direct labour
  • Manufacturing overhead

  • 8. 
    Which of the following are manufacturing costs?

  • Overhead and marketing costs
  • Direct raw material costs and direct labour costs
  • Administrative and direct labour costs
  • Marketing and administrative costs

  • 9. 
    Manufacturing costs include..

  • direct materials and direct labour only.
  • direct materials and manufacturing overhead only.
  • direct labour and manufacturing overhead only.
  • direct materials, direct labour, and manufacturing overhead.

  • 10. 
    Which one of the following would not be classified as manufacturing overhead?

  • Indirect labour.
  • Direct materials
  • Insurance on factory building
  • indirect materials.

  • 11. 
    When classified according to traceability to cost object, the cost of raw materials is considered a:

  • Discretionary cost
  • Direct cost
  • Product cost
  • Committed cost

  • 12. 
    The work of factory employees that can be physically and directly associated with converting raw materials into finished goods is..

  • manufacturing overhead.
  • indirect materials.
  • indirect labour.
  • direct labour.

  • 13. 
    The subtotal, "Cost of goods manufactured" appears on..

  • a merchandising companies' Statements of Comprehensive Income
  • both manufacturing and a merchandising companies' Statements of Comprehensive Income
  • neither manufacturing nor a merchandising companies' Statements of Comprehensive Income
  • a manufacturing companies' Statements of Comprehensive Income

  • 14. 
    Period costs are not inventoriable costs.

  • TRUE
  • FALSE

  • 15. 
    Depreciation on office furniture is considered to be a (an).. -

  • Administrative costs
  • Selling and distribution costs
  • Overhead costs
  • Negative asset

  • 16. 
    Direct materials and direct labour are the only product costs.

  • TRUE
  • FALSE

  • 17. 
    Which one of the following is not considered as material costs?

  • Partially completed motor engines for a motorcycle plant
  • Bolts used in manufacturing the compressor of an engine
  • Rivets for the wings of a new commercial jet aircraft
  • Lumber used to build tables

  • 18. 
    Which one of the following is not a cost element in manufacturing a product?

  • Manufacturing overhead
  • Direct materials
  • Office salaries
  • Direct labour

  • 19. 
    A manufacturing company calculates the cost of goods sold as follows: .....(FG = finished goods)

  • Beginning FG inventory + cost of goods purchased – ending FG inventory.
  • Ending FG inventory – cost of goods manufactured + beginning FG inventory.
  • Beginning FG inventory – cost of goods manufactured – ending FG inventory.
  • Beginning FG inventory + cost of goods manufactured – ending FG inventory.

  • 20. 
    Variable costs ..-

  • Increase in total with the increase in production
  • Increase per unit with the increase in production
  • Include prime costs and all factory overheads
  • Include all manufacturing, administrative and selling and distribution costs

  • 21. 
    Both direct materials and indirect materials are..

  • raw materials.
  • manufacturing overhead.
  • merchandise inventory.
  • sold directly to customers by a manufacturing company.

  • 22. 
    Manufacturing costs that cannot be classified as direct materials or direct labour are classified as manufacturing overhead.

  • TRUE
  • FALSE

  • 23. 
    Which one of the following is not a direct material?

  • A tire used for a lawnmower.
  • The plastic used in the covered case for a home PC.
  • The steel used in the manufacturing of steel-radial tires.
  • Lubricant for a ball-bearing joint for a large crane.

  • 24. 
    In calculating gross profit for a manufacturing company, the cost of goods manufactured is deducted from net sales.

  • TRUE
  • FALSE
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