Q.1 What is job costing primarily used for?
Mass production
Custom orders
Continuous processes
Standardized products
Explanation - Job costing is applied when products are manufactured based on specific customer requirements or custom orders.
Correct answer is: Custom orders
Q.2 Which of the following is a key feature of batch costing?
Applied to custom jobs
Applied to identical units produced in batches
Used for services only
Not suitable for factories
Explanation - Batch costing is used when similar products are produced in groups or batches rather than individually.
Correct answer is: Applied to identical units produced in batches
Q.3 In job costing, costs are collected for:
Each process
Each batch
Each job
Each department
Explanation - In job costing, costs are accumulated for each specific job separately.
Correct answer is: Each job
Q.4 Batch costing is most suitable for which industry?
Shipbuilding
Printing press
Steel plants
Construction
Explanation - Batch costing is useful in industries like printing, where goods are produced in lots or batches.
Correct answer is: Printing press
Q.5 What is the main difference between job costing and batch costing?
Types of overhead
Units produced
Profit calculation
Material usage
Explanation - Job costing deals with single custom jobs, whereas batch costing deals with a number of identical units produced together.
Correct answer is: Units produced
Q.6 In job costing, each job is treated as:
A separate cost unit
A batch cost
A process cost
A joint product
Explanation - Each job is considered an independent cost unit for recording costs separately.
Correct answer is: A separate cost unit
Q.7 In batch costing, unit cost is calculated by:
Dividing total cost of batch by number of units
Adding costs of all batches
Dividing overheads only by units
Multiplying job costs
Explanation - Total batch cost is spread over the units in the batch to determine per unit cost.
Correct answer is: Dividing total cost of batch by number of units
Q.8 Which method is generally used for construction contracts?
Batch costing
Process costing
Job costing
Operating costing
Explanation - Construction projects are unique and tailor-made, hence job costing is applicable.
Correct answer is: Job costing
Q.9 Batch costing is considered a variation of:
Contract costing
Process costing
Job costing
Operating costing
Explanation - Batch costing is a type of job costing where jobs consist of similar items produced together.
Correct answer is: Job costing
Q.10 What does a job cost sheet record?
Only material costs
Only labor costs
Costs of each specific job
Only overheads
Explanation - A job cost sheet is a detailed record of all costs incurred for a specific job.
Correct answer is: Costs of each specific job
Q.11 Which of the following is NOT true about job costing?
Costs are collected for each job
Jobs are homogeneous
Each job is unique
It is useful for custom orders
Explanation - In job costing, jobs are not homogeneous; each job is distinct and tailor-made.
Correct answer is: Jobs are homogeneous
Q.12 Batch costing helps in determining:
Profit per process
Cost per unit
Joint product cost
Standard cost
Explanation - Batch costing divides the batch cost by the number of units to find per-unit cost.
Correct answer is: Cost per unit
Q.13 Which document initiates a job in job costing?
Purchase requisition
Job order
Material issue note
Invoice
Explanation - A job order authorizes the start of work on a specific job.
Correct answer is: Job order
Q.14 In batch costing, larger batches usually result in:
Higher cost per unit
Lower cost per unit
No change in cost
Increased fixed costs
Explanation - Fixed costs are spread over more units in larger batches, reducing per-unit cost.
Correct answer is: Lower cost per unit
Q.15 Job costing is NOT suitable for:
Furniture making
Ship building
Brick making
Interior design
Explanation - Brick making involves continuous production, making process costing more suitable.
Correct answer is: Brick making
Q.16 Which cost is directly traceable to a job?
Direct materials
Factory rent
Factory manager salary
Depreciation of plant
Explanation - Direct materials can be identified with a specific job, unlike general overheads.
Correct answer is: Direct materials
Q.17 Batch costing is commonly used in which of the following industries?
Oil refining
Chemical manufacturing
Toy manufacturing
Road construction
Explanation - Toy manufacturing involves producing products in batches for economies of scale.
Correct answer is: Toy manufacturing
Q.18 Which is an advantage of batch costing?
Less record keeping
Cost per unit accuracy
No overhead allocation
Unique customization
Explanation - Batch costing ensures accurate calculation of cost per unit for batch production.
Correct answer is: Cost per unit accuracy
Q.19 In job costing, indirect costs are allocated using:
Direct tracing
Overhead absorption rate
Job order
Invoice price
Explanation - Indirect costs cannot be traced directly, so they are absorbed using a rate.
Correct answer is: Overhead absorption rate
Q.20 Batch cost per unit is:
Total cost of batch divided by number of jobs
Batch cost divided by units in the batch
Overheads divided by batch size
Material cost only
Explanation - Per unit cost is derived by spreading batch cost over the units in the batch.
Correct answer is: Batch cost divided by units in the batch
Q.21 In job costing, profit is usually determined:
After each process
After job completion
Monthly
Annually only
Explanation - Profit is determined by comparing job cost with revenue once the job is completed.
Correct answer is: After job completion
Q.22 Which costing method is more time-consuming?
Process costing
Job costing
Batch costing
Operating costing
Explanation - Job costing requires detailed cost tracking for each job, making it more time-consuming.
Correct answer is: Job costing
Q.23 Which of the following is a limitation of batch costing?
Not useful for identical products
Difficult to calculate unit cost
Batch size determination is complex
Overhead allocation is impossible
Explanation - Choosing an economic batch size is often challenging in batch costing.
Correct answer is: Batch size determination is complex
Q.24 A job cost sheet includes all EXCEPT:
Direct material
Direct labor
Factory overhead
Financial expenses
Explanation - Only manufacturing costs (materials, labor, overhead) are included in job cost sheets.
Correct answer is: Financial expenses
Q.25 Batch costing is most appropriate when products are:
Custom made
Homogeneous
Produced continuously
Produced irregularly
Explanation - Batch costing is used when units are similar in nature and produced together.
Correct answer is: Homogeneous