1.
An example of an inventoriable cost would be:
a) Shipping fees
b) Advertising
flyers
c) Sales
commissions
d) Direct materials
2.
Direct materials cost is Rs. 80,000. Direct labor cost is Rs. 60,000. Factory
overhead is Rs. 90,000. Beginning goods in process were Rs. 15,000. The cost of
goods manufactured is Rs. 245,000. What is the cost assigned to the ending
goods in process?
a) Rs. 45,000
b) Rs. 15,000
c) Rs. 30,000
d) There will be no ending Inventory
3.
The FIFO inventory costing method (when using under perpetual inventory system)
assumes that the cost of the earliest units purchased is allocated in which of
the following ways?
a) First to be
allocated to the ending inventory
b) Last to be
allocated to the cost of goods sold
c) Last to be
allocated to the ending inventory
d) First to be allocated to the cost
of good sold
4.
Heavenly Interiors had beginning merchandise inventory of Rs. 75,000. It made
purchases of Rs. 160,000 and recorded sales of Rs. 220,000 during November.
Its
estimated gross profit on sales was 30%. On November 30, the store was
destroyed by fire. What was the value of the merchandise inventory loss?
a) Rs. 154,000
b) Rs. 160,000
c) Rs. 235,000
d) Rs. 81,000
5.
Inventory control aims at:
a) Achieving
optimization
b) Ensuring against
market fluctuations
c) Acceptable
customer service at low capital investment
d) Discounts
allowed in bulk purchase
6.
Which of the following is a factor that should be taken into account for fixing
re-order level?
a) Average
consumption
b) Economic Order
Quantity
c) Emergency lead time
d) Danger level
7.
EOQ is a point where:
a) Ordering cost is equal to carrying
cost
b) Ordering cost is
higher than carrying cost
c) Ordering cost is
lesser than the carrying cost
d) Total cost
should be maximum
8.
Grumpy & Dopey Ltd estimated that during the year 75,000 machine hours
would be used and it has been using an overhead absorption rate of Rs. 6.40 per
machine hour in its machining department. During the year the overhead
expenditure amounted to Rs. 472,560 and 72,600 machine hours were used.
Which
one of the following statements is correct?
a) Overhead was
under-absorbed by Rs.7,440
b) Overhead was
under-absorbed by Rs.7,920
c) Overhead was over-absorbed by
Rs.7,440
d) Overhead was
over-absorbed by Rs.7,920
9.
A business always absorbs its overheads on labor hours. In the 8th period,
18,000 hours were worked, actual overheads were Rs. 279,000 and there was Rs.
36,000 over-absorption. The overhead absorption rate per hours was:
a) Rs. 15.50
b) Rs. 17.50
c) Rs. 18.00
d) Rs. 13.50
10.
The main purpose of cost accounting is to:
a) Maximize profits
b) Help in
inventory valuation
c) Provide information to management
for decision making
d) Aid in the
fixation of selling price
11.
In which of the following would there be a difference between financial and
managerial accounting?
a) Users of the
information
b) Purpose of the
information
c) Flexibility of
practices
d) All of the given options
12.
Which of the following is a cost that changes in proportion to changes in
volume?
a) Fixed cost
b) Sunk cost
c) Opportunity cost
d) None of the given options
13.
Cost accounting information can be used for all EXCEPT:
a) Budget control
and evaluation
b) Determining
standard costs and variances
c) Pricing and
inventory valuation decisions
d) Analyzing the data
14. Which of the following is not an
element of factory overhead?
a) Depreciation on
the maintenance equipment
b) Salary of the
plant supervisor
c) Property taxes
on the plant buildings
d) Salary of a marketing manager
15.
The main difference between the profit center and investment center is:
a) Decision making
b) Revenue
generation
c) Cost incurrence
d) All of the given
options
16.
Opportunity cost is the best example of:
a) Sunk Cost
b) Standard Cost
c) Relevant Cost
d) Irrelevant cost
17-
If, Sales = Rs. 800,000, Markup = 25% of cost, what would be the value of Gross
profit?
a) Rs. 200,000
b) Rs. 160,000
c) Rs. 480,000
d) Rs. 640,000
18-
Which of the following is correct?
a) Opening finished goods units +
Units produced – Closing finished goods units =
Units sold
b) Units Sold =
Units produced + Closing finished goods units - Opening finished goods
units
c) Sales + Average
units of finished goods inventory
d) None of the
given options
19-
Loss by fire is an example of:
a) Normal Loss
b) Abnormal Loss
c) Both normal loss
and abnormal loss
d) Can not be
determined
20-
In cost Accounting, abnormal loss is charged to:
a) Factory overhead
control account
b) Work in process account
c) Income Statement
d) All of the given
options
Lesson
No.2
1.
If computational and record-keeping costs are about the same under both FIFO
and
weighted average, which of the following method will generally be
preferred?
A. Weighted Average
B. FIFO
C. They offer the
same degree of information
D. Cannot be
determined with so little information
2.
Which of the following System applies when standardized goods are produced
under
a series of inter-connected operations?
A. Job Order
Costing
B. Process Costing
C. Standard Costing
D. All of the given
options
3.
The cost of material that is not completely processed, would be found in which
of
the following inventory account on the Balance Sheet?
A. Direct material
inventory
B. Work-in-process inventory
C. Finished goods
inventory
D. Supplies
inventory
4.
A complete set of Financial Statements for Nestle Company at December 31,
2008
would include each of the followings, EXCEPT:
A. Balance Sheet as
of December 31, 2008
B. Statement of Projected Cash flows
for 2009
C. Income Statement
for the year ended December 31, 2008
D. Notes containing
additional information that is useful in interpreting the Financial
Statements
5.
Total Fixed cost _______ with the increase in production.
A. Remains constant
B. Decreases
C. Increases
D. There is no
relation between fixed cost and activity level
6.
The following data is available for the Bricks Company:
Particulars Rs.
Freight
in 20,000
Purchases
return and allowances 80,000
Marketing
expenses 200,000
Finished
goods Inventory, ending 90,000
Cost of
goods sold 700% of marketing expenses
You
are required to calculate the cost of goods available for sales if Gross Profit
is
50%
of cost of goods sold.
A. Rs. 1,490,000
B. Rs. 1,390,000
C. Rs. 1,500,000
D. Rs. 1,590,000
7.
Consider the following:
Beginning work in
process inventory Rs. 20,000
Direct material
used Rs. 50,000
Direct labor used
Rs. 80,000
Manufacturing
overhead Rs. 120,000
Ending work in
process inventory Rs. 10,000
Cost of finished
goods manufactured Rs. 260,000
The
total manufacturing costs would be:
A. Rs. 250,000
B. Rs. 260,000
C. Rs. 270,000
D. Rs. 280,000
8.
Job 210 was unfinished at the end of the accounting period. The total cost
assigned
to the job was Rs. 12,000 of which Rs. 3,000 was direct material cost.
Factory
overheads were allocated to goods in process at 150% of direct labor
cost.
What was the amount of direct labor cost charged to Job 210?
A. Rs. 3,600
B. Rs. 3,000
C. Rs. 5,400
D. Rs. 9,000
9.
Job 210 was unfinished at the end of the accounting period. The total cost
assigned
to the job was Rs. 12,000 of which Rs. 3,000 was direct material cost.
Factory
overheads were allocated to goods in process at 150% of direct labor
cost.
What was the amount of Factory over head cost charged to Job 210?
A. Rs. 3,600
B. Rs. 3,000
C. Rs. 5,400
D. Rs. 9,000
10.
The over applied balance of the Factory Overhead ledger account is Rs. 36,000,
a
significant amount. The ending balances of Goods in Process Inventory,
Finished
Goods Inventory and Cost of Goods Sold accounts are Rs. 12,000, Rs.
8,000,
and Rs. 60,000, respectively. On the basis of ending balances, how much
of
the over applied balance of overhead should be allocated to each of these
accounts?
A. Rs.5, 400,
Rs.27, 600, Rs.3, 000
B. Rs.27,400, Rs.
3,600, Rs. 5,000
C. Rs. 5,400, Rs. 3,600, Rs. 27,000
D. None of the
given options
11.
PEL Limited has been using an overhead rate of Rs. 5.60 per machine hour.
During
the year, overheads of Rs. 275,000 were incurred and 48,000 machine
hours
worked. Therefore, overheads were:
A. Under-applied by
Rs.7,600
B. Over-applied by
Rs. 6,200
C. Under-applied by Rs. 6,200
D. Over-applied by
Rs. 7,600
12.
Factory overhead should be allocated on the basis of:
A. Direct labor
hours
B. Direct labor
costs
C. An activity basis which relates to
cost incurrence
D. Machine hours
13.
If a company uses a predetermined rate for the application of factory overhead,
the
idle capacity variance is the:
A. Over or under
applied variable cost element of overheads
B. Difference in
budgeted costs and actual costs of fixed overheads items
C. Difference in
budgeted cost and actual costs of variable overheads items
D. Over or under applied fixed cost
element of overheads
14.
Which of the following manufacturing operations, which is best, suited to the
utilization
of a job order system?
A. Soft drink
bottling operation
B. Crude oil
refining
C. Plastic molding
operation
D. Helicopter manufacturing
15.
Which of the following is a characteristic of process cost accounting system?
A. Material, Labor
and Overheads are accumulated by orders
B. Companies use
this system if they process custom orders
C. Only Closing
stock of work in process is restated in terms of completed units
D. Opening and Closing stock of work
in process are related in terms of completed
units
16.
Which cost accumulation procedure is best suited to a continuous mass
production
process of similar units?
A. Job order
costing
B. Standard costing
C. Actual costing
D. Process costing
17.
Which of the following is an objective of cost accounting?
A. Provide
information to management for decision making
B. Computation of cost per unit
C. Preparation of
Financial Statement
D. Computation of
relevant costs
18.
Which of the following would be considered an external user of the firm's
accounting
information?
A. President
B. Stockholder
C. Sales manager
D. Controller
19.
Cost accounting concepts include all of the following EXCEPT:
A. Planning
B. Controlling
C. Sharing
D. Costing
20.
The chief financial officer is also known as the:
A. Controller
B. Staff accountant
C. Auditor
D. Finance director
