📘 Cost Classification – 100 MCQs
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Cost classification means:
A. Recording costs
B. Grouping costs on logical basis
C. Calculating profit
D. Auditing
Answer: B
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Cost classified by nature includes:
A. Fixed & Variable
B. Material, Labour, Expenses
C. Direct & Indirect
D. Controllable & Uncontrollable
Answer: B
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Direct cost is:
A. Indirect
B. Traceable to cost unit
C. Fixed
D. Variable
Answer: B
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Indirect cost is:
A. Traceable
B. Not traceable
C. Fixed only
D. Variable only
Answer: B
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Prime cost =
A. Direct material + Direct labour + Direct expenses
B. Indirect cost
C. Fixed cost
D. Variable cost
Answer: A
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Factory overhead includes:
A. Direct labour
B. Indirect expenses
C. Direct material
D. Prime cost
Answer: B
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Administrative overhead relates to:
A. Production
B. Office functions
C. Sales
D. Purchase
Answer: B
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Selling overhead includes:
A. Production cost
B. Distribution cost
C. Selling cost
D. Admin cost
Answer: C
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Distribution cost relates to:
A. Production
B. Delivery of goods
C. Office
D. Labour
Answer: B
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Fixed cost is:
A. Constant irrespective of output
B. Changes with output
C. Semi-variable
D. None
Answer: A
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Variable cost varies with:
A. Time
B. Output
C. Profit
D. Capital
Answer: B
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Semi-variable cost is:
A. Fully fixed
B. Fully variable
C. Part fixed, part variable
D. None
Answer: C
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Step cost is:
A. Continuous
B. Discontinuous
C. Fixed
D. Variable
Answer: B
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Fixed cost per unit:
A. Increases with output
B. Decreases with output
C. Constant
D. Zero
Answer: B
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Variable cost per unit:
A. Constant
B. Increasing
C. Decreasing
D. Zero
Answer: A
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Total fixed cost:
A. Constant
B. Variable
C. Increasing
D. Decreasing
Answer: A
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Total variable cost:
A. Constant
B. Proportional
C. Fixed
D. Zero
Answer: B
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Marginal cost includes:
A. Fixed cost
B. Variable cost
C. Both
D. None
Answer: B
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Conversion cost =
A. Direct material
B. Labour + overhead
C. Fixed cost
D. Variable cost
Answer: B
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Opportunity cost is:
A. Actual cost
B. Foregone benefit
C. Fixed cost
D. Variable cost
Answer: B
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In Railways, track maintenance is:
A. Direct cost
B. Indirect cost
C. Variable cost
D. Fixed cost
Answer: B
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Cost of fuel for locomotives is:
A. Fixed
B. Variable
C. Semi-variable
D. Indirect
Answer: B
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Salary of station master is:
A. Fixed cost
B. Variable cost
C. Direct cost
D. Marginal cost
Answer: A
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Depreciation is:
A. Variable
B. Fixed
C. Semi-variable
D. Direct
Answer: B
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Cost classification helps in:
A. Control
B. Decision making
C. Planning
D. All
Answer: D
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Relevant cost is:
A. Future cost
B. Past cost
C. Sunk cost
D. Fixed cost
Answer: A
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Sunk cost is:
A. Future
B. Past irrecoverable
C. Variable
D. Fixed
Answer: B
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Differential cost is:
A. Same cost
B. Change in cost
C. Fixed cost
D. Variable cost
Answer: B
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Avoidable cost is:
A. Cannot be avoided
B. Can be avoided
C. Fixed
D. Sunk
Answer: B
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Unavoidable cost is:
A. Fixed
B. Cannot be avoided
C. Variable
D. None
Answer: B
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Controllable cost is:
A. Controlled by manager
B. Not controlled
C. Fixed
D. Variable
Answer: A
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Uncontrollable cost is:
A. Controlled
B. Not controlled
C. Variable
D. None
Answer: B
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Joint cost is:
A. Single product
B. Multiple products
C. Fixed
D. Variable
Answer: B
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By-product cost is:
A. Main product
B. Secondary product
C. Fixed
D. Variable
Answer: B
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Conversion cost excludes:
A. Material
B. Labour
C. Overhead
D. None
Answer: A
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Cost classification is used in:
A. Budgeting
B. Control
C. Decision making
D. All
Answer: D
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Marginal cost excludes:
A. Fixed cost
B. Variable cost
C. Labour
D. Material
Answer: A
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Incremental cost is:
A. Additional cost
B. Fixed cost
C. Variable cost
D. None
Answer: A
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Explicit cost is:
A. Paid cost
B. Imputed
C. Opportunity
D. None
Answer: A
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Implicit cost is:
A. Notional
B. Actual
C. Paid
D. None
Answer: A
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Shutdown cost is:
A. Cost during shutdown
B. Fixed cost
C. Variable cost
D. None
Answer: A
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Abnormal cost is:
A. Normal
B. Irregular
C. Fixed
D. Variable
Answer: B
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Normal cost is:
A. Expected
B. Unexpected
C. Fixed
D. Variable
Answer: A
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Cost classification helps in:
A. Cost control
B. Planning
C. Decision
D. All
Answer: D
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Railway project cost classification helps in:
A. Budgeting
B. Cost control
C. Decision making
D. All
Answer: D
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Direct material is:
A. Traceable
B. Indirect
C. Fixed
D. Variable
Answer: A
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Indirect labour is:
A. Direct
B. Overhead
C. Fixed
D. Variable
Answer: B
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Factory overhead is:
A. Direct
B. Indirect
C. Fixed
D. Variable
Answer: B
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Selling cost is:
A. Production
B. Distribution
C. Marketing
D. None
Answer: C
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Distribution cost includes:
A. Transport
B. Storage
C. Delivery
D. All
Answer: D
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Administrative cost includes:
A. Office salary
B. Factory cost
C. Selling cost
D. None
Answer: A
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Cost classification is basis for:
A. Marginal costing
B. BEP
C. Budgeting
D. All
Answer: D
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Cost behavior analysis helps in:
A. Planning
B. Control
C. Decision
D. All
Answer: D
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Fixed cost remains constant in:
A. Short run
B. Long run
C. Both
D. None
Answer: A
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Variable cost depends on:
A. Output
B. Time
C. Profit
D. None
Answer: A
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Semi-variable cost includes:
A. Fixed + variable
B. Fixed only
C. Variable only
D. None
Answer: A
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Step cost changes:
A. Gradually
B. In steps
C. Constant
D. None
Answer: B
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Cost classification is essential for:
A. Managerial accounting
B. Financial accounting
C. Both
D. None
Answer: A
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Cost classification improves:
A. Accuracy
B. Control
C. Decision
D. All
Answer: D
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Cost classification is foundation of:
A. Cost accounting
B. Financial accounting
C. Audit
D. None
Answer: A
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