SECTION I-Twelve (12) multiple-choice questions 1/2 mark =06 Marks(Transfer the answers to page no.2) 1. Identify the costs which come under the cost of inventory. A. Cost of direct labor B. Cost of direct material C. Factory overhead (both fixed and variable) D. All of the given options 2. How do you allocate fixed production overheads into inventory cost as per IAS 2 ? A. Based on fixed percentage. B. Based on nornal capacity. C. Based on level of production. D. None of the given options. 3. Which, of the following items is included in the cost of inventories? A. Costs of labor and production overheads B. Storage costs C. Selling costs 4. Inventories are measured and presented in the financial statements D. Administrative overheads at their A. Historical cost B. Net realizable value C. Lower of cost and net realizable value D. Estimated selling price less cost to complete and sell 5. Find the correct statement given below. Statement. Abnormal cost of material and labor can be included in the cost of inventory as per IAS 2. Statement II: Interest cost can be part of cost of inventory if the material purchased with deferred settlement terms. A. Statement I is correct B. Statement II is correct C. Both the statements are correct. D. Both the statements are wrong. 6. IAS 16 - Property, Plant and Equipment applies to: A. Assets held for sale B. Biological assets related to agricultural activity C. Exploration assets 7. Madeena LiC spent RO. 5000 as storage cost, which is essential for D. None of the given options movement of material from one process to another in the production system. These expenses: A. Cannot be included in material cost