Q.1 Service costing is primarily used in which type of industries?
Manufacturing
Service
Trading
Agriculture
Explanation - Service costing is applied to industries that provide services like transport, hospitals, power supply, and hotels rather than manufacturing goods.
Correct answer is: Service
Q.2 Which of the following is a service industry?
Steel plant
Transport company
Cement factory
Textile mill
Explanation - A transport company provides services (transportation of goods or passengers), hence it falls under the service industry.
Correct answer is: Transport company
Q.3 The main unit of cost in transport costing is:
Per hour
Per kilometer
Per tonne-kilometer
Per day
Explanation - In transport costing, tonne-kilometer is widely used as it considers both weight carried and distance traveled.
Correct answer is: Per tonne-kilometer
Q.4 Which costing method is used by hospitals?
Job costing
Process costing
Service costing
Contract costing
Explanation - Hospitals provide services (treatment and care), so service costing is used to ascertain cost per patient-day or bed-day.
Correct answer is: Service costing
Q.5 In hotel costing, the unit of cost is generally:
Room per day
Meal per day
Employee per day
Guest per month
Explanation - Hotels measure service cost per room per day or per guest-day depending on the type of service.
Correct answer is: Room per day
Q.6 Which cost is most significant in power house costing?
Material cost
Labour cost
Fuel cost
Advertising cost
Explanation - In power house costing, the major cost is fuel (coal, oil, gas) used for generating power.
Correct answer is: Fuel cost
Q.7 Service costing is also known as:
Unit costing
Batch costing
Process costing
Job costing
Explanation - Service costing is a type of unit costing since it determines cost per unit of service provided.
Correct answer is: Unit costing
Q.8 Passenger-kilometer is used in:
Hospital costing
Transport costing
Hotel costing
Power house costing
Explanation - Passenger-kilometer is a composite unit used in transport costing representing one passenger carried one kilometer.
Correct answer is: Transport costing
Q.9 Which of the following is NOT a service industry?
Banking
Shipping
Textiles
Airlines
Explanation - Textile industry is a manufacturing industry, not a service industry.
Correct answer is: Textiles
Q.10 The unit of cost in cinema houses is:
Per seat per show
Per seat per day
Per ticket sold
Per advertisement
Explanation - In cinema houses, cost per seat per show is the unit of cost.
Correct answer is: Per seat per show
Q.11 The basic objective of service costing is to:
Control indirect expenses
Ascertain cost per unit of service
Fix selling price of goods
Prepare financial accounts
Explanation - Service costing helps in determining the cost per unit of service provided (e.g., per bed-day, per tonne-kilometer).
Correct answer is: Ascertain cost per unit of service
Q.12 Which one of the following is considered as a composite cost unit?
Per room
Per passenger-kilometer
Per patient
Per employee
Explanation - Composite cost units measure two variables together, like passenger-kilometer combining number of passengers and distance.
Correct answer is: Per passenger-kilometer
Q.13 Which service uses 'bed-day' as the cost unit?
Hotel
Hospital
Transport
Cinema
Explanation - Hospitals use bed-day or patient-day as cost units for measuring the cost of services provided.
Correct answer is: Hospital
Q.14 In service costing, fixed costs are usually apportioned on the basis of:
Direct material
Labour hours
Estimated usage
Advertising expenditure
Explanation - Fixed costs in service costing are apportioned based on estimated service usage to allocate fairly.
Correct answer is: Estimated usage
Q.15 The unit of cost in power generation is generally:
Per kilowatt
Per kilowatt-hour
Per megawatt
Per hour
Explanation - Power houses generally compute cost per kilowatt-hour of electricity produced.
Correct answer is: Per kilowatt-hour
Q.16 Cost per meal served is a unit used in:
Hospitals
Hotels
Transport
Banks
Explanation - Hotels and catering services use 'cost per meal served' as a unit of service costing.
Correct answer is: Hotels
Q.17 Service costing is also suitable for:
Trading companies
Public utility undertakings
Retail stores
Export houses
Explanation - Public utilities like transport, power supply, and water supply use service costing to determine service costs.
Correct answer is: Public utility undertakings
Q.18 Which is the most suitable cost unit for a water supply undertaking?
Per litre
Per gallon
Per kiloliter
Per pipe
Explanation - Water supply undertakings use per kiloliter as the cost unit for measuring service cost.
Correct answer is: Per kiloliter
Q.19 Which service would use 'per call' as the unit of cost?
Telecom services
Hospitals
Hotels
Cinemas
Explanation - Telecom services often measure cost per call or per minute of conversation.
Correct answer is: Telecom services
Q.20 Which industry would use 'cost per 1000 cubic feet' as the cost unit?
Power supply
Transport
Gas supply
Water supply
Explanation - Gas undertakings use per 1000 cubic feet as cost unit for cost ascertainment.
Correct answer is: Gas supply
Q.21 Why are composite cost units used in service costing?
They reduce records
They simplify financial accounts
They reflect dual measures of service
They avoid fixed costs
Explanation - Composite cost units reflect two variables, like tonne-kilometers, combining load and distance.
Correct answer is: They reflect dual measures of service
Q.22 Which service industry uses 'per flight hour' as the unit of cost?
Hospitals
Airlines
Hotels
Transport
Explanation - Airlines often calculate service cost per flight hour or per passenger-kilometer.
Correct answer is: Airlines
Q.23 Cost per cheque issued is a unit used in:
Hospitals
Transport
Banks
Hotels
Explanation - Banks use units like cost per cheque issued, per draft issued, etc. for service costing.
Correct answer is: Banks
Q.24 Service costing differs from job costing because:
It is used for products
It calculates cost per service unit
It is used in construction
It tracks individual orders
Explanation - Service costing determines cost per unit of service while job costing calculates cost per specific job/order.
Correct answer is: It calculates cost per service unit
Q.25 Which of the following is an example of an absolute cost unit?
Passenger-kilometer
Per tonne-kilometer
Per bed-day
Per room per day
Explanation - Absolute cost units measure service in a single dimension, like bed-day in hospitals.
Correct answer is: Per bed-day