MCQ for CA Intermediate COSTING - Chapter 2 - MATERIAL COST

Sample Multiple Choice Questions (MCQ's) for CA Intermediate - Paper 1 - COST AND MANAGEMENT ACCOUNTING - Chapter 2: MATERIAL COST - For Practice relevant for May/November 23 Examinations

 

Q1. Direct material can be classified as

  1. Fixed cost
  2. Variable cost
  3. Semi-variable cost.
  4. Prime Cost

Answer: 2

Q2. In most of the industries, the most important element of cost is

  1. Material 
  2. Labour 
  3. Overheads 
  4. Administration Cost

Answer: 1

Q3. Which of the following is considered to be the normal loss of materials? 

  1. Loss due to accidents
  2. Pilferage
  3. Loss due to breaking the bulk
  4. Loss due to careless handling of materials.

Answer: 3

Q4. When material prices fluctuate widely, the method of pricing that gives absurd results is

  1. Simple average price
  2. Weighted average price
  3. Moving average price
  4. Inflated price

Answer: 1

Q5. When prices fluctuate widely, the method that will smooth out the effect of fluctuations is

  1. Simple average
  2. Weighted average
  3. FIFO
  4. LIFO

Answer: 2

Q6. Under the FSN system of inventory control, inventory is classified on the basis of:

  1. Volume of material consumption
  2. Frequency of usage of items of inventory
  3. Criticality of the item of inventory for production
  4. Value of items of inventory

Answer: 2

 

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