Labour costing MCQs
Cost Accounting MCQs
Multiple Choice Questions and Answers
Choose the correct alternative:
1) Which cost accounting standard deals with labour cost?
a) CAS – 5
b) CAS – 6
c) CAS – 7
d) CAS – 8
Ans: c) CAS – 7
2) Cost accounting standard 7 deals with:
a) Material cost
b) Labour cost
c) Overheads
d) None of the above
Ans: b) Labour cost
3) Direct labour cost includes:
a) Labour Cost of regular working hours
b) Labour cost of overtime hours
c) Both a & b
d) None of the above
Ans: c) Both a & b
4) Which of the following is not direct labour?
a) Assembly-line workers
b) Machine operators
c) Manual workers
d) Time-keeper
Ans: d) Time-keeper
5) The payment to direct labour form part of which of the following heads?
a) Prime cost
b) Works overheads
c) Office and administrative overheads
d) Selling and distribution overheads
Ans: a) Prime cost
6) Which of the following is indirect labour?
a) Mechanics.
b) Supervisors
c) Foremen
d) All of the above
Ans: d) All of the above
[Hint: Indirect labour includes chowkidars, sweepers, foremen, watchmen, time-keeper, cleaners, repairers, supervisors, mechanics etc.]
7) The payment to indirect labour form part of which of the following heads?
a) Works overheads
b) Office and administrative overheads
c) Selling and distribution overheads
d) All of the above
Ans: d) All of the above
8) Labour turnover is measured by
a) Number of workers replaced/average number of workers [Replacement method]
b) Number of workers left / average number of workers [Separations method]
c) Number of workers jointing plus Number of workers left / average number of workers [Flux method]
d) All of the above
Ans: d) All of the above
9. Unavoidable cause of labour turnover:
a) Discharge of inefficient workers
b) Discharge of workers due to long absence
c) Retrenchment of workers due to shortage of work
d) All of the above
Ans: d) All of the above
10. High labour turnover can reduced by:
a) Fair monetary and non-monetary benefits
b) Suitable working conditions
c) Participation in management
d) All of the above
Ans: d) All of the above
11. Which of the following is a not preventive cost of labour turnover?
a) Cost of providing good working conditions
b) Cost of providing educational facilities
c) Cost of providing subsidized meals
d) Cost of recruitment of new workers.
Ans: d) Cost of recruitment of new workers.
 12. Which of the following is not a replacement cost of labour turnover?
a) Cost of training of new workers.
b) Loss of profit due to loss of production
c) Loss of production due to inefficiency of workers
d) Cost of providing safety measures against working conditions
Ans: d) Cost of providing safety measures against working conditions
13. Motion study was developed by:
a) Lucas Pacioli
b) F.B. Gilbrith
c) Adam Smith
d) FW Taylor
Ans: b) F.B. Gilbrith
14. The object of time study is to determine:
a) The time spent by worker to complete the job.
b) Normal idle time of the job.
c) Abnormal idle time of the job.
d) The proper time required to complete the job.
Ans: d) The proper time required to complete the job.
15. Time and motion study is also known as:
a) Methods study
b) Job study
c) Labour Cost study
d) None of the above
Ans: a) Methods study
16. The object of motion study is:
a) To find the best methods of completing the work.
b) To determine the time required to complete the job.
c) To control normal and abnormal idle time
d) None of the above
Ans: a) To find the best methods of completing the work.
17. Time and motion study is conducted by the:
a) Time-keeping department
b) Personnel department
c) Payroll department
d) Engineering department.
Ans: d) Engineering department.
18. Documents used for time booking are:
a) Daily time sheets
b) Weekly time sheets
c) Job tickets or job cards
d) All of the above
Ans: d) All of the above
19. Wages sheet is prepared by
a) Time-keeping department
b) Personnel department
c) Payroll department
d) Cost accounting department
Ans: c) Payroll department
20. Idle Time arises only when workers are paid on:
a) Time Basis
b) Piece Basis
c) Both of the above
d) None of the above
Ans: a) Time Basis
21. In which of the following incentive plans of wage payment, wage on time basis are NOT guaranteed?
a) Halsey plan
b) Rowan plan
c) Taylor’s differential piece rate system
d) Merrick’s multiple piece rate system
Ans: c) Taylor’s differential piece rate system
22. Which method of wage payment proves to be injurious to worker’s health?
a) Time rate method
b) Piece rate method
c) Halsey premium plan
d) Rowan premium plan
Ans: b) Piece rate method
23. Wages under rowan and Halsey plan are exactly when time saved is:
a) nil
d) 50% of the standard time
c) both (a) and (b)
d) None of the above
Ans: c) both (a) and (b)
24. When the time saved is less than 50% of the time saved:
a) Rowan plan allows more wages to a worker than Halsey plan
b) Rowan plan allows less wages to a worker than Halsey plan
c) Rowan and Halsey plan allow equal wages to a worker
d) All statements are incorrect
Ans: a) Rowan plan allows more wages to a worker than Halsey plan
25. When time saved is more than 40% of the standard time, Halsey plan allows
a) more wages than Rowan plan
b) less wages than Rowan plan
c) equal wages as compared to Rowan plan
d) d) All statements are incorrect
Ans: a) more wages than Rowan plan
26. In Halsey plan, bonus on wages of time saved may vary from:
a) ¼ to ½
b) ¼ to 1/3
c) 1/3 to 2/3
d) 0 to ½
Ans: Â c) 1/3 to 2/3
27. Taylor’s differential piece rate system provides for higher rate to:
a) Every worker
b) Efficient workers
c) Inefficient workers
d) None of the above
Ans: b) Efficient workers
28. Which of the following incentive methods of wage payment should be used for indirect workers?
a) Rowan plan
b) Taylor’s differential piece rate system
c) Gantt’s task and bonus plan
d) None of the above.
Ans: d) None of the above.
29. Which of the following methods of wage payment is most suitable where quality and accuracy of work is of primary importance?
a) Piece rate system
b) Time rate system
c) Differential piece work system
d) Halsey premium system
Ans: b) Time rate system
30. Cost of abnormal idle time is:
a) charged to Costing profit and Loss A/c
b) charged to factory overheads
c) Charged to office overheads
d) recovered by inflating the wage rate.
Ans: a) charged to Costing profit and Loss A/c
31. Which of the following is not part of labour cost?
a) Basis wages
b) Dearness allowances
c) Employer’s contribution to provident fund
d) Employees contribution to provident fund and ESI
Ans: d) Employees contribution to provident fund and ESI
32. When overtime is required for meeting urgent orders, overtime premium should be.
a) Charged to Costing Profit and Loss A/c.
b) Charged to overhead costs
c) Charged to respective jobs.
d) Charged to direct labour cost
Ans: b) Charged to overhead costs
33. Labour productivity is measured by comparing:
a) Actual time with standard time.
b) Total output with total man hours
c) Added value for the product with total wage cost
d) All of the above
Ans: d) All of the above
34. Which department is concerned with selection and training of the workers?
a) Engineering department
b) Payroll department
c) Costing Department
d) Personnel Department
Ans: d) Personnel Department
35. Strict supervision is required under which method of wage payment?
a) Piece rate system
b) Time rate system
c) Differential piece work system
d) Halsey premium system
Ans: b) Time rate system
36. Time rate method of wage payment is suitable where:
a) Production is standardised and repetitive
b) Output of the worker can be measured
c) Aim to maximise production
d) Quality of goods produced is most important
Ans: d) Quality of goods produced is most important
37. Piece rate method of wage payment is suitable where:
a) Production is standardised and repetitive
b) Output of the worker can be measured
c) Aim to maximise production
d) All of the above
Ans: d) All of the above
38. Employee’s History card is kept and maintained by the personnel department.
39. The card in which full record of every worker employed in the organisation is maintained is called Employee’s History card.
40. Merit rating is the comparative appraisal of workers on different jobs.            True
41. Job analysis is the complete study of any job.              True
42. Payroll department determines the gross and net amount of earnings of each worker. False
43. Metal disc method can be profitably used only in small and medium size concerns. False
44. Taylor’s Plan does not guarantee time wages but pays only on the basis of efficiency of workers. True
45. Overtime due to pressure of work or during the season is quite usual. True
46. Time-cum-Job card shows the attendance records as well as effective time work of each         worker. True
47. Job evaluation is a comparative appraisal of jobs and not of workers. False
48. Time booking is done by the supervisor in the department. Â False
49. Job evaluation and job analysis are same.                     True
50. Bogus workers are those who actually do not exist but are included in the pay roll and fraudulent persons claim their wages. True
Cost Accounting MCQs [Free PDF]
100+ Cost Accounting MCQs [Free PDF], Multiple Choice Questions and Answers