A direct cost is one that can be traced to which of the following?
Correct answer C. Each unit of output
Subject / 433 questions
Accounting MCQs
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What is the process of repaying a debt over time through regular instalments of interest and principal that clear the loan by maturity called?
Correct answer B. Amortization
Goods are sold for 2,000 at a profit of 25% on cost. What is the cost of goods sold?
Correct answer C. 1,600
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A Ltd has sales of 2,200, total fixed costs of 570, variable costs of 1,540 (including raw materials of 1,100) and sells 22,000 units. What is the break-even point in units if the raw material price falls by 2%?
Correct answer D. 18,387
Which is one of the most important tools for cost planning?
Correct answer C. Budget
A worker paid 15 per hour makes 720 units (standard time 5 minutes per unit) in a 48-hour week. What are his total wages including the Rowan bonus?
Correct answer D. 864
The minimum stock level of a raw material is 4,000 units and its average stock level is 9,000 units. What is the reorder quantity?
Correct answer A. 10,000 units
For a particular month a company had opening raw material stock of 11,570, closing stock of 10,380, raw material purchases of 1,28,450 and a total manufacturing cost of 3,39,165. If factory overheads are applied at 45% of direct labour cost, how much overhead was applied to production?
Correct answer B. 65,025
A company is operating at 80% of capacity, where normal capacity output is 1,50,000 units. Variable cost is 14 per unit, total fixed costs are 8,00,000 and the target profit is 4,00,000. What should the selling price per unit be?
Correct answer C. 24.00
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A company has an asset turnover of 1.85 and a profit margin of 0.35. What is its return on investment?
Correct answer A. 0.65
Budgeted sales next year are 5,00,000 units. Desired closing finished goods are 1,50,000 units, and closing work in progress is 60,000 equivalent units. Opening finished goods are 80,000 units and opening work in progress is 50,000 equivalent units. How many equivalent units must be produced?
Correct answer C. 5,80,000
In a decision to keep or dispose of obsolete stock bought years ago, what is the original cost of that stock an example of?
Correct answer C. Sunk cost
Which of the following is not a suitable basis for apportioning the costs of a transport department?
Correct answer D. Crane value
What is the total cost of running a business other than the cost of manufacturing and production called?
Correct answer A. Commercial cost
What are costs that vary between alternative courses of action called?
Correct answer A. Differential costs
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By what other name is average cost known?
Correct answer B. Unit cost
When production equals sales, which statement is true?
Correct answer C. No change occurs to inventories for either use absorption costing or variable costing methods
Which letter of the English alphabet does the shape of a ledger account resemble?
Correct answer A. T
What are accommodation bills generally drawn for?
Correct answer C. For mutual financial accommodation
X draws a three-month bill of exchange on Y for 10,000 on 1-1-2013. What is the bill’s due date?
Correct answer D. 4-4-2013