Correct Answer:
B. Activities that consume resources, using cost drivers
ABC traces costs to activities and then to products using cost drivers.
November 13, 2026 · Accounting and Finance MCQs, Cost & Management Accounting MCQs
Activity-based costing (ABC) assigns overhead costs to products on the basis of:
Related MCQs
Under the direct write-off method, when a specific receivable is written off as bad:
A.
Accounts receivable is debited and sales is credited
B.
Cash is debited and receivables is credited
C.
Bad debt expense is debited and accounts receivable is credited
D.
Allowance for doubtful debts is debited and cash is credited
Correct answer is:
C. Bad debt expense is debited and accounts receivable is credited
Do you agree with this answer?
Re-appropriation means:
A.
Transfer of funds from one head or sub-head to another within the same grant
B.
Returning all money to the treasury
C.
Taking a new foreign loan
D.
Writing off bad debts
Correct answer is:
A. Transfer of funds from one head or sub-head to another within the same grant
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The present value of future cash flows is Rs. 150,000 and the initial investment is Rs. 100,000. The profitability index is:
A.
1.5
B.
0.67
C.
50,000
D.
2.5
Correct answer is:
A. 1.5
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Fixed costs are Rs. 60,000, selling price is Rs. 50 per unit and variable cost is Rs. 30 per unit. The break-even point in units is:
A.
3,000 units
B.
2,000 units
C.
1,200 units
D.
6,000 units
Correct answer is:
A. 3,000 units
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Drawings made by the owner of a sole proprietorship:
A.
Reduce the owner's equity (capital)
B.
Increase the owner's equity
C.
Are recorded as business expenses
D.
Are recorded as revenue
Correct answer is:
A. Reduce the owner's equity (capital)
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Cost of goods sold is Rs. 600,000 and average inventory is Rs. 100,000. Inventory turnover is:
A.
0.17 times
B.
60 times
C.
5 times
D.
6 times
Correct answer is:
D. 6 times
Do you agree with this answer?
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