MCQ for CA Intermediate COSTING - Chapter 5 - ACTIVITY BASED COSTING

Sample Multiple Choice Questions (MCQ's) for CA Intermediate - Paper 1 - COST AND MANAGEMENT ACCOUNTING - Chapter 5: ACTIVITY BASED COSTING - For Practice relevant for May/November 23 Examinations

 

Q1. A cost driver is:

  1. An item of production overheads
  2. A common cost which is shared over cost centres
  3. Any cost relating to transport
  4. An activity which generates costs

Answer: 4

Q2. In activity based costing, costs are accumulated by activity using:

  1. Cost drivers
  2. Cost objects
  3. Cost pools
  4. Cost benefit analysis

Answer: 3

Q3. A cost driver:

  1. Is a force behind the overhead cost
  2. Is an allocation base
  3. Is a transaction that is a significant determinant of cost
  4. All of the above

Answer: 4

Q4. Which of the following is not a benefit of ABC?

  1. Accurate cost allocation
  2. Improved decision making
  3. Better control on activity and costs
  4. Reduction of prime cost

Answer: 4

Q5. The key elements of activity based budgeting are:

  1. Type of activity to be performed
  2. Quantity of activity to be performed
  3. Cost of activity to be performed
  4. All of the above

Answer: 4

 

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