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B Com Exam  >  B Com Tests  >  Test: Methods of Cost Determination - 2 - B Com MCQ

Test: Methods of Cost Determination - 2 - B Com MCQ


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10 Questions MCQ Test - Test: Methods of Cost Determination - 2

Test: Methods of Cost Determination - 2 for B Com 2024 is part of B Com preparation. The Test: Methods of Cost Determination - 2 questions and answers have been prepared according to the B Com exam syllabus.The Test: Methods of Cost Determination - 2 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Methods of Cost Determination - 2 below.
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Test: Methods of Cost Determination - 2 - Question 1
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What is the primary costing method used when a manufacturing concern produces homogeneous products like sugar, cloth, or cement?

Detailed Solution for Test: Methods of Cost Determination - 2 - Question 1
In a manufacturing concern that produces homogeneous products like sugar, cloth, or cement, process costing is the primary costing method used. Process costing is suitable for industries where products are mass-produced, and the costs associated with individual units cannot be differentiated from each other. It helps determine the unit cost of production for such products.
Test: Methods of Cost Determination - 2 - Question 2
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Which of the following elements is NOT included in the prime cost of a product?

Detailed Solution for Test: Methods of Cost Determination - 2 - Question 2
The prime cost of a product includes direct labor, direct materials, and direct expenses. Factory overhead, also known as indirect costs, is not part of the prime cost but is included in the total cost of production.
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Test: Methods of Cost Determination - 2 - Question 3
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What is the purpose of adjusting the stock of raw materials in the preparation of a cost sheet?

Detailed Solution for Test: Methods of Cost Determination - 2 - Question 3
Adjusting the stock of raw materials in the preparation of a cost sheet is done to calculate the total cost of production accurately. By accounting for changes in raw material quantities, the cost sheet reflects the actual cost incurred in production.
Test: Methods of Cost Determination - 2 - Question 4
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What is the primary purpose of a manufacturing account in a business?
Detailed Solution for Test: Methods of Cost Determination - 2 - Question 4
A manufacturing account in a business is primarily used to determine the cost of goods manufactured during a specific period. It helps calculate the production costs and manufacturing profit or loss.
Test: Methods of Cost Determination - 2 - Question 5
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Which of the following components is NOT included in the cost of production?
Detailed Solution for Test: Methods of Cost Determination - 2 - Question 5
The cost of production includes factory cost, prime cost, and office and administrative overheads. Selling and distribution overheads are not part of the cost of production but are considered when calculating the total cost.
Test: Methods of Cost Determination - 2 - Question 6
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When preparing a tender or quotation price, what basis is commonly used for estimating overhead costs?
Detailed Solution for Test: Methods of Cost Determination - 2 - Question 6
In the preparation of a tender or quotation price, overhead costs are commonly estimated based on machine hours or labor hours. This basis helps allocate overhead costs to products more accurately.
Test: Methods of Cost Determination - 2 - Question 7
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What is the purpose of absorbing factory overhead costs in the cost sheet?
Detailed Solution for Test: Methods of Cost Determination - 2 - Question 7
Absorbing factory overhead costs in the cost sheet is done to allocate these overhead costs to production units. It helps determine the total cost of production for each unit.
Test: Methods of Cost Determination - 2 - Question 8
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Which costing method is primarily used when a manufacturing concern produces heterogeneous products?
Detailed Solution for Test: Methods of Cost Determination - 2 - Question 8
Job costing is primarily used when a manufacturing concern produces heterogeneous (different) products. It allows for the tracking of costs for each unique job or project.
Test: Methods of Cost Determination - 2 - Question 9
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In the preparation of a manufacturing account, what is the purpose of not recording the opening and closing stock of finished goods?
Detailed Solution for Test: Methods of Cost Determination - 2 - Question 9
The opening and closing stock of finished goods are not recorded in the manufacturing account to accurately determine the manufacturing profit or loss during the specified period. This omission allows for a clear calculation of profit or loss related to production activities.
Test: Methods of Cost Determination - 2 - Question 10
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What is the main purpose of preparing a cost sheet in a manufacturing concern?
Detailed Solution for Test: Methods of Cost Determination - 2 - Question 10
The primary purpose of preparing a cost sheet in a manufacturing concern is to determine the selling price of a product. By calculating all the costs associated with production, a company can set an appropriate selling price that covers its costs and allows for a profit margin.
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