MGT402 First Chapter MCQ

Choose the correct answer in each of the following MCQ.

1. The main purpose of cost accounting is to

a Maximize profits

b Help in inventory valuation

c Provide information to management for decision making

d Aid in the fixation of selling price;

2. Fixed cost per unit increases when

a Variable cost per unit increase

b Variable cost per unit decreases

c Production volume increases

d Production volume decreases

3. Variable cost per unit

a Varies when output varies

b Remains constant

c Increases when output increases

d Decrease when output decreases

4. Which of the followings is the reason of increase in total variable cost:

a Increase in fixed cost

b Rise in interest on capital

c Increase in direct material cost

d Depreciation of machinery

5. Which of the followings is an example of fixed cost:

a Direct material cost

b Works manager’s salary

c Depreciation of machinery

d Chargeable expenses

6. Cost accounting concepts include all of the following except

a Planning

b Controlling

c Sharing

d Costing

7. The three elements of product cost are all but

a Direct material cost

b Factory overhead cost

c Indirect labor cost

d Direct labor cost

Answers: Q1	Q2	Q3	Q4	Q5	Q6	Q7
c	d	b	c	c	c	c