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1. What type of expense does B Ltd. classify the royalty payment of ₹10 per unit to the product designer?

Direct expense Production overhead Administrative overhead Selling overhead

2. The combination of direct labor and factory overhead is referred to as what?

Sunk cost Fixed cost Conversion cost Variable cost

3. How is overtime defined in accounting terms?

Actual hours exceeding normal hours Actual hours exceeding standard hours Standard hours exceeding actual hours Actual hours being less than standard hours

4. Directors' remuneration and expenses are categorized under which type of overhead?

Production overhead Administration overhead Selling overhead Distribution overhead

5. Which Cost Accounting Standard (CAS) addresses the principles and methods for calculating depreciation and amortization?

CAS - 8 CAS - 12 CAS - 14 CAS - 16

6. For preparing a cost sheet, costs are classified based on which criteria?

Nature Functions Relevance Variability

7. Which item should be added to the costing profit to determine the financial profit?

Income tax paid Over absorption of works overhead Interest paid on bonds All of the above

8. Which statement is accurate regarding job costing?

Batch costing is a variant of job costing Job cost sheets can estimate job profits Job costing cannot be used with marginal costing In cost-plus contracts, the contractor risks a loss

9. Which of the following is an example of a by-product?

Curd and butter in a dairy Mustard seeds and mustard oil Edible oils and oil cakes Diesel and petrol in an oil refinery

10. Given a standard price of material at ₹20 per kg and actual usage of 520 kg for 100 units, what is the material usage variance?

₹400 (Adverse) ₹400 (Favorable) ₹1,040 (Adverse) ₹1,040 (Favorable)

11. Which factors can lead to a change in the break-even point?

Change in fixed cost Change in variable cost Change in selling price All of the above

12. Which of the following is not a potential advantage of using a budget?

More motivated managers Improved inter-departmental communication Enhanced coordination of firm activities More accurate external financial statements

13. What is the primary purpose of a cost sheet in cost accounting?

To record sales transactions To determine the cost of production To prepare financial statements To calculate tax liabilities

14. Which method is used to allocate overhead costs to products in a manufacturing environment?

Direct costing Absorption costing Variable costing Activity-based costing

15. What is the effect of under-absorption of overheads on the cost of goods sold?

Increases the cost of goods sold Decreases the cost of goods sold Has no effect on the cost of goods sold Increases net profit

June 23 Costing Paper