Costing Concepts Questionnaire – (Finance)

1. Which of the following is NOT an objective of Cost Accounting

a) Aid to Managerial Decision Making

b) Ascertaining Cost of a Product, Process or Services
c) Provide data for Pricing of products
d) Arriving at the Cost of Capital.

2. Cost that tends to vary in direct proportion with total output is called-
a) Direct Cost
b) Variable Cost
c) Total Cost
d) Marginal Cost

3. A firm will shut down operations when its revenue falls below its –
a) Variable Costs
b) Fixed Costs
c) Total Cost
d) Marginal Cost

4. Method of Costing used in Drilling & Mining industries is –

a) Operations Costing
b) Service Costing
c) Process Costing
d) Batch Costing

5. Cementing Base costs are allocated –

a) To Cementing units based on Primary Costs and subsequently to wells on the basis of
Cementing hours.
b) To Cementing units based on Rig Days and subsequently to wells based on Oil Well Cement
quantity used.
c) Directly to wells based on cementing hours
d) Directly to wells in proportion of Oil Well Cement used.

6. Rig Operation costs in ONGC comprise approx –

a) 40-50% of per meter drilling cost in offshore operations
b) More than 70% of the per meter drilling cost in offshore operations
c) More than 70% of the per meter drilling cost in onshore operations
d) None of the Above
 7. Per Meter Costs of Offshore wells ranges approx –
a) 2-3 times onshore per meter costs
b) 4-5 times onshore per meter costs
c) 8-10 times onshore per meter costs.
d) Same as Onshore per meter costs.

8. The cost of Abandoned well being considered for side tracking vis-a-vis drilling a fresh well is –
a) Opportunity Cost
b) Sunk Cost
c) Implicit Cost
d) Relevant Cost

9. Prime Costs include –

a) Direct Material Cost
b) Direct Expenses
c) Both a) & b)
d) None of the above.

10 Direct Expenses in Drilling include –

a) Logging Costs
b) Cementing Costs
c) Mud Costs
d) All of the above

Answers

1.d 2.b 3.a 4.a 5.a

6.b 7.c 8.b 9.c 10.d