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CA Inter Direct Costs — practice questions — page 2

Explore 38 free Direct Costs questions in CA Inter Cost and Management Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Direct Costs questions and exercises with answers

Showing questions 31–38 of 38.

COGS includes raw material costs together withRead the answer and worked solution →A gap between actual and standard material or labour cost is recorded asRead the answer and worked solution →Overhead per labour hour added to labour cost is aRead the answer and worked solution →Factory burden means overhead incurred at theRead the answer and worked solution →Two units cost Rs 10 each and two cost Rs 12 each. Two are sold; FIFO cost?Read the answer and worked solution →A machine costing 12 is improved at 20 and sold for 45. What is the profit?Read the answer and worked solution →Royalty is Rs 3 per unit on 4,000 units. Direct expenses amount toRead the answer and worked solution →Materials 30,000, labour 18,000, royalty 6,000, head office rent 9,000. Direct cost?Read the answer and worked solution →

Worked practice questions

COGS includes raw material costs together with

  1. Advertising spend
  2. Freight charges
  3. Dividends paid
  4. Interest on loans
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Correct answer: B. Freight charges

Freight or shipping on purchased materials is part of the cost of the goods.

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A gap between actual and standard material or labour cost is recorded as

  1. A variance
  2. A dividend
  3. A reserve
  4. A provision
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Correct answer: A. A variance

When actual cost falls short of or exceeds standard cost, the difference is booked as a variance.

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Overhead per labour hour added to labour cost is a

  1. Wage rate
  2. Piece rate
  3. Idle rate
  4. Burden rate
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Correct answer: D. Burden rate

Overhead per hour of labour that is added along with labour cost is called a burden rate.

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More Cost and Management Accounting topics

Cost SheetProcess CostingCost AccountingMarginal CostingEmployee CostInventory ValuationActivity Based CostingBudgets and Budgetary Control