Costing Practice Question for SEBI Grade A 2020
Costing Practice Question for SEBI Grade A 2020

Costing Practice Question for SEBI Grade A 2020

SEBI Grade A Costing Practice Question Test. Costing study material for SEBI Grade A Exam 2020. Costing, Companies Act, Economics, Commerce & Accountancy, Management and Finance Notes PDF for SEBI Grade A Preparation 2020. As we all know that The Security Exchange Board of India (SEBI) has released the SEBI Grade A 2020 Notification for the recruitment of 140+ Assistant Managers across the country.

If you are preparing for SEBI Grade A 2020, you will come across a section on Costing, Companies Act, Economics”. In this post you will attempt SEBI Grade A Costing Practice Question for your SEBI Grade A Preparation 2020 . If you prepare this thoroughly, you can very easily crack SEBI Grade A 2020.

SEBI Grade A 2020 – Costing Practice Question | Set- 1


1. Which of the following is not contained in the cost sheet?

A. Distribution overheads
B. Interest paid
C. Factory overheads
D. Administrative overheads
E. None of these

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Correct Answer: B. Interest paid

Explanation: Cost sheet is a document which provides for the assembly of the detailed cost of a cost unit. It is a periodical statement of cost designed to show in detail the various components of the cost of goods produced like prime cost, factory cost, cost of production, total cost and cost per unit. Interest paid is of financial nature and thus not included while preparing a cost sheet.

2. Unit costing method is used in _______.

A. Automobile garages
B. Shipbuilding industry
C. Construction companies
D. Brick making industry
E. None of these

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Correct Answer – D. Brick making industry

Explanation: Unit costing is used in industries manufacturing a single product or two or more grades of the same product on large scale. The products need to be homogeneous in this case. Unit or output costing is suitable for breweries, collieries, cement works, steel, brick making , flour mills etc.

3. Which of the following is a feature of job costing?

A. A product is produced to meet the specific requirements of the order.
B. At the end of the accounting period, work in progress will not exist.
C. Each job completed is uniform and hence it is easy to have standardisation of controls.
D. It is not suitable for industries which produce a variety of products
E. None of these

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Correct Answer – A. A product is produced to meet the specific requirements of the or

Explanation: Job costing may be defined as a system in which the elements of cost are accumulated separately for each job order undertaken by the organisation. A job is carried out or product is produced to meet the specific requirements of the order.

4. _______ costing is applied for engineering projects.

A. Process costing
B. Contract costing
C. Batch costing
D. Unit costing
E. None of these

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Correct Answer – B. Contract costing

Explanation:  In contract costing each contract is treated as a cost unit and costs are ascertained separately for each contract. It is suitable for businesses concerned with building or engineering projects or structural or construction contracts.

5. _______ are particular types of products but produced in different varieties.

A. Joint-products
B. By-products
C. Co-products
D. Semi-products
E. None of these

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Correct Answer – C. Co-products

Explanation: Co-products are particular types of products but produced in different varieties. For example, in the automobile industry co-products are, cars, jeeps, trucks, buses, etc.

6. Service costing is also known as ________

A. Output costing
B. Contract costing
C. Operating costing
D. Operation costing
E. None of these

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Correct Answer – C. Operating costing

Explanation:Operating costing method is applicable where services are rendered rather than good produced. The total expenses of operating are divided by the units and cost per unit of service is arrived at. This method is employed in railways, road transport, water supply undertakings, telephone services, etc.

7.Classification and accumulation of costs by fixed and variable costs is of special importance in ______.

A. Operating costing
B. Operation costing
C. Unit costing
D. Process costing
E. None of these

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Correct Answer – A. Operating costing

Explanation: Classification and accumulation of costs by fixed and variable costs is of special importance in operating costing. Operating costing applies where standardized services are provided by an undertaking.

8. Batch counting is useful to determine ________

A. Profit of batches
B. Economic batch quantity
C. Minimum quantity of output
D. Maximum quantity of output
E. None of these

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Correct Answer – B. Economic batch quantity

Explanation: Batch costing is useful to determine economic batch quantity. In each batch, there are a number of units. The ascertainment of economic batch quantity is very useful. Economic batch quantity may be calculated by using the formula meant for calculating Economic Order Quantity (EOQ) in case of material control.

9.The basis for the payment of cash by contractee under contract is ________

A. Contract cost
B. Work uncertified
C. Value of plan used in the contract
D. Work certified
E. None of these

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Correct Answer – D. Work certified

Explanation:  The basis for the payment of cash by contractee under contract is work certified. During the period of contract, Contractee has to pay sums of amount to contractor especially where a contractor is engaged in a big and long term contract. This amount is paid on the basis of certification of work done by surveyors or architects on behalf of the Contractee, who certified the value of the work done by the contractor.

10. Process cost is ascertained and recorded in _______

A. Separate ledger a/c
B. Separate statement
C. Profit and loss a/c
D. Balance sheet
E. None of these

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Correct Answer – A. Separate ledger a/c

Explanation: Process cost is ascertained and recorded in separate ledger a/c. Process costing is an accounting methodology that traces and accumulates direct costs, and allocates indirect costs of a manufacturing process. Costs are assigned to products, usually in a large batch, which might include an entire month’s production.


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