Absorption Costing - MCQs with answer
1. Which of the following is a conventional method of ascertaining cost?a) Absorption costing
b) Full Costing
c) Both a & b
d) None of the above
View Answer / Hide Answer2. Under absorption costing, profit is ascertaineda) On the basis of difference between sales and total cost.
b) By computation as per desired rate of profit on sales or cost
c) Both a and b
d) None of the above.
View Answer / Hide Answer3. All costs are classified under ______ segments under absorption costing.a) Five
b) Six
c) Four
d) Three
View Answer / Hide Answer4. All factory costs are treated as _________ while all administration costs are treated as ___________.a) Product costs, Period costs
b) Period Costs, Product costs
c) Fixed costs, Period costs
d) Period costs, fixed costs
View Answer / Hide AnswerANSWER: a) Product costs, Period costs
a) True
b) False
View Answer / Hide Answer6. Under absorption costing among fixed expensesa) Fixed manufacturing expenses are included in unit cost
b) Fixed non-manufacturing expenses are included in unit cost
c) Both a and b
d) None of the above
View Answer / Hide AnswerANSWER: a) Fixed manufacturing expenses are included in unit cost
a) Price determination on basis of full cost
b) Solution of separation of costs
c) Calculation of gross and net profit
d) All of the above
View Answer / Hide AnswerANSWER: a) Price determination on basis of full cost
a) Difference between product cost and period cost
b) Charged of fixed factory overheads on inventory
c) Both a and b
d) None of the above
View Answer / Hide Answer9. Which of the following statements are true?A) Absorption costing helps in preparation of fixed budget.
B) Absorption costing is dependent on level of level of output.
C) Absorption costing is very helpful in taking managerial decisions.
D) Absorption costing helps to conform with accrual and matching concept.
a) A and B
b) B and C
c) A and D
d) B and D
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