Cost and Management Accounting MCQ Lesson No.2
1). Fixed cost per unit
decreases when:
a.
Production volume increases.
b.
Production volume
decreases.
c. Variable
cost per unit decreases.
d. Variable
cost per unit increases.
2). Prime cost +
Factory overhead cost is:
a. Conversion
cost.
b. Production
cost.
c. Total
cost.
d. None
of given option.
3). Find the value of
purchases if Raw material consumed Rs. 90,000; Opening and closing stock of raw
material is Rs. 50,000 and 30,000 respectively.
a. Rs.
10,000
b. Rs.
20,000
c.
Rs. 70,000
d. Rs.
1,60,000
4). If Cost of goods
sold = Rs. 40,000
GP Margin = 20% of sales
Calculate the Gross profit margin.
a. Rs.
32,000
b. Rs.
48,000
c. Rs.
8,000
d. Rs.
10,000
5).______________ method assumes that the goods
received most recently in the stores or produced recently are the first ones to
be delivered to the requisitioning department.
a.
FIFO
b.
Weighted average method
c.
Most recent price method
d.
LIFO
Fill in the blanks: (5
x 1)
1). Indirect cost that is incurred in producing product or
services but which can not traced in full.
2 Sunk cost is the cost
that incurred or expended in the past which can not be retrieved.
3). Conversion cost = Direct Labor + FOH
4). If cost of goods sold Rs. 20,000 and Sales
Rs. 50,000 then Gross Markup Rate is 150%
5). Under Perpetual
system, a complete and continuous record of movement of each inventory item is
maintained.
1. Cost of production report is a
_________________.
a. Financial
statement
b. Production
process report
c. Order
sheet
d. None
of given option.
2. There are ___________ parts of cost of
production report.
a. 4
b. 5
c.
6 ( 6th is concerned with
calculation of loss)
d. 7
3. Which one of the organization follows
the cost of production report _________________?
a.
Textile unit
b. Chartered
accountant firm
c. Poultry
forming
d. None
of the given option.
4. _____________________ part of cost of
production report explains the cost incurred during the process.
a. Quantity
schedule
b. Cost
accounted for as follow
c.
Cost charge to the department
d. None
of given option
Solve
the question 5 to 7.
If units put in the process 7,000, units completed and transfer out 5,000.
Units still in process (100% Material, 50% Conversion cost). 500 units were
lost. Cost incurred during the process Material and Labor Rs. 50,000 and
60,000.
a. 5,750
b. 7,000
c. 5,000
d. 6,500
a.
Material 7.69; Conversion cost 10.43
b. Material
7.14; Conversion cost 10.43
c. Material
7.14; Conversion cost 9.23
d. None
of given option
7. Find the value of cost transferred to
next department:
a. Rs.
57,500
b. Rs.
50,000
c. Rs.
70,000
d. None
of given option.
8. In
case of second department find the increase of per unit cost in case of
unit lost. Cost received from previous
department is Rs. 1,40,000.
a. 1.43
b. (2.13)
c.
1.54
d. 1.67
9. Opening work in process inventory can be
calculated under
a.
FIFO and Average costing
b. LIFO
and Average costing
c. FIFO
and LIFO costing
d. None
of given option
10 _________________ needs further processing to improve its
marketability.
a.
By product
b.
Joint
Product
c.
Augmented
product
d.
None of the
given option
1. Jan
1; finished goods inventory of Manuel Company was $3, 00,000. During the year
Manuel’s cost of goods sold was $19, 00,000, sales were $2, 000,000 with a 20%
gross profit. Calculate cost assigned to the December 31; finished goods
inventory.
a. $
4,00,000
b. $
6,00,000
c. $
16,00,000
d. None
of given options
2. 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
3. The
combination of direct material and direct labor is
a. Total
production Cost
b. Prime
Cost
c. Conversion
Cost
d. Total
manufacturing Cost
4. The
cost expended in the past that cannot be retrieved on product or service
a. Relevant
Cost
b. Sunk
Cost
c. Product
Cost
d. Irrelevant
Cost
5. When
a manufacturing process requires mostly human labor and there are widely
varying wage rates among workers, what is probably the most appropriate basis
of applying factory costs to work in process?
a. Machine
hours
b. Cost
of materials used
c. Direct
labor hours
d. Direct
labor dollars
6. A typical factory overhead cost is:
a. distribution
b. internal
audit
c.
compensation of plant manager
d. design
7. An
industry that would most likely use process costing procedures is:
a.
tires
b. home
construction
c. printing
d. aircraft
e.
8. Complete the following table
|
|
Per
unit |
Total |
|
Fixed
cost |
Increase |
Constant |
|
Variable
cost |
|
|
|
Total
cost |
Increase |
Decrease |
a.
Constant, Decrease
b. Decrease,
Decrease
c. Increase,
Increase
d. Increase,
Decrease
9. The Kennedy
Corporation uses Raw Material Z in a manufacturing process. Information as to
balances on hand, purchases and requisitions of Raw Material Z is given below:
Jan.
1 Balance:
200 lbs. @ $1.50
08 Received 500 lbs. @ $1.55
18 Issued 100 lbs.
25 Issued 260 lbs.
30 Received 150 lbs. @ $1.60
If
a perpetual inventory record of Raw Material Z is maintained on a FIFO basis,
it will show a month end inventory of:
a. $240
b. $784
c. $759
d. $767
10.
A disadvantage of an hourly wage plan is that it:
a.
Provides no incentive for employees to
achieve and maintain a high level of
production.
b. [1]Is hardly ever used
and is difficult to apply.
c. Establishes
a definite rate per hour for each employee.
d. Encourages
employees to sacrifice quality in order to maximize earnings.
1. A manufacturing company manufactures a
product which passes through two
departments.
10,000 units were put in process. 9,400 units were completed &
transferred
to department-II. 400 units (1/2 complete) were in process at the end of
month.
Remaining 200 units were lost during processing. Costs incurred by the
department
were as follows:
Particulars
Rs.
Direct
Materials 19,400
Direct
Labor 24,250
Factory
overhead 14,550
Apportionment
of the Accumulated Cost/Total Cost accounted for, for the month in CPR
____________
a.
Rs. 24,250 Approximately
b.
Rs. 56,987 Approximately
c.
Rs. 58,200 Approximately
d.
None of the given options
MCQ #
2 and 3 are based on the following data:
Allied chemical company reported the
following production data for its department:
Particulars Units
Received in from department –1 55,000
Transferred out department –3 39,500
In process (1/3 labor & overhead)
10,500
All materials were put in process in
Department No. 1. Costing department collected following figures for department
No. 2: Particulars Rs.
Unit cost received in 1.80, Labor cost in department No.2 27,520.
Applied overhead in Department No. 2 15,480
2. Equivalent units of labor & FOH are
_________
a.
3,500 units
b.
39,500 units
c.
43,000 units
d.
None of the given options
3. Unit cost of lost unit after adjustment (by
using any method) _________
a.
Rs. 0.64
b.
Rs. 0.36
c.
Rs. 0.18
d.
None of the given options
MCQ #
4, 5 and 6 are based on the following data:
In Department No. 315 normal production
losses are discovered at the end of process. During January 2007 following
costs were charged to Department 315:
Particulars Rs.
Direct Materials 30,000
Direct Labor 20,000
Manufacturing overhead 10,000
Cost from preceding department 96,000
Data of production quantities is as
follows:
Particulars Units
Received in 12,000
Transferred out 7,000
Normal Production Loss 1,000
Partly processed units in Department No.
315 were completed 50%.
4. Cost of normal loss (where normal loss is
discovered at the end of process)
_________:
a.
Rs. 14,000
b.
Rs. 44,000
c.
Rs. 1, 12,000
d.
None of the given options
5. Equivalent units of material __________
a.
2,000 units
b. 7,000 units
c.
10,000 units
d.
None of the given options
6.
Unit cost of Direct Labor__________
a.
Rs. 1
b.
Rs. 2
c.
Rs. 3
d.
None of the given options
7. During January, Assembling department
received 60,000 units from preceding department at a unit cost of Rs. 3.54.
Costs added in the assembly department were:
Particulars Rs.
Materials 41,650
Labor 101,700
Factory overheads 56,500
There was no work in process beginning
inventory.
Particulars Units
Units from preceding department 60,000
Units transferred out 50,000
Units in process at the end of month
(all materials, 2/3converted)
9,000 Units lost (1/2 completed as to
materials & conversion cost ) 1,000
The entire loss is considered abnormal
& is to be charged to factory overhead.
Equivalent units of material __________
a.
9,000 units
b.
56,500 units
c.
59,500 units
d.
None of the given options
8.
For which one of the following industry would you recommend a Job Order
Costing system?
a.
Oil Refining
b.
Grain dealing
c.
Beverage production
d.
Law Cases
9. For which one of the following industry would
you recommend a Process Costing system?
a.
Grain dealer
b. Television repair shop
c. Law office
d. Auditor
10.
The difference between total revenues and total variable costs is known as:
a.
Contribution margin
b.
Gross margin
c.
Operating income
d.
Fixed costs
11.
Percentage of Margin of Safety can be calculated in which one of the following
ways?
a.
Based on budgeted Sales
b. Using budget profit
c. Using profit & Contribution ratio
d.
All of the given options
12.
Which of the following represents a CVP equation?
a.
Sales = Contribution margin (Rs.) + Fixed expenses + Profits
b.
Sales = Contribution margin ratio + Fixed expenses + Profits
c.
Sales = Variable expenses + Fixed expenses + profits
d.
Sales = Variable expenses – Fixed expenses + profits
a.
Remains constant
b.
Profits will increased
c. Company will have to face losses
d.
None of the given options
14.
If 120 units produced, 100 units were sold @ Rs. 200 per unit. Variable
cost related to production & selling is Rs. 150 per unit and fixed cost is
Rs. 5,000. If the management wants to increase sales price by 10%, what will be
increasing sales profit of company by increasing unit sales price. (Cost &
volume profit analysis keep in your mind while solving it)
a.
Rs.2,000
b.
Rs. 5,000
c.
Rs. 7,000
d.
None of the given options
MCQ #
15, 16, 17 and 18 are based on the following data:
The
following is the Corporation's Income Statement for last month:
Particulars
Rs.
Sales
4,000,000
Less:
variable expenses 2,800,000
Contribution
margin 1,200,000
Less:
fixed expenses 720,000
Net
income 480,000
The
company has no beginning or ending inventories. A total of 80,000 units were
produced and sold last month.
15.
What is the company's contribution margin ratio?
a.
30%
b.
70%
c.
150%
d.
None of given options
16.
What is the company's break-even in units?
a.
48,000 units
b.
72,000 units
c.
80,000 units
d.
None of the given options
17.
How many units would the company have to sell to attain target profits of Rs.
600,000?
a. 88,000 units
b.
100,000 units
c.
106,668 units
d.
None of given options
18.
What is the company's margin of safety in Rs?
a.
Rs. 480,000
b.
Rs. 1,600,000
c.
Rs. 2,400,000
d.
None of given options
19.
Which of the following statement(s) is (are) true?
a. A
manufacturer of ink cartridges would ordinarily use process costing rather than
job-order costing
b.
If a company uses a process costing system it accumulates costs by
processing department rather than by job
c.
The output of a processing department
must be homogeneous in order to use process costing
d.
All of the given options
20.
Which of the following statements is (are) true?
a. Companies that produce many
different products or services are more likely to use job-order costing systems
than process costing systems
b. Job-order costing systems are used by
manufactures only and process costing systems are used by service firms only
c. Job-order costing systems are used by
service firms and process costing systems are used by manufacturers
d. All of the given options
21.
Product cost is normally:
a.
Higher in Absorption costing than Marginal costing
b.
Higher in Marginal costing than Absorption costing
c.
Equal in both Absorption and Marginal costing
d.
None of the given options
22.
Using absorption costing, unit cost of product includes which of the following
combination of costs?
a. Direct materials, direct labor and fixed
overhead
b. Direct materials, direct labor and
variable overhead
c. Direct materials, direct labor,
variable overhead and fixed overhead
d. Only direct materials and direct
labor
23. Marginal costing is also known as:
a. Indirect costing
b. Direct costing
c. Variable costing
d. Both (b) and (c)
MCQ #
24 & 25 are based on the following data:
The
following data related to production of ABC Company:
Units
produced 1,000 units
Direct
materials Rs.6
Direct
labor Rs.10
Fixed
overhead Rs.6000
Variable
overhead Rs.6
Fixed
selling and administrative Rs.2000
Variable
selling and administrative Rs.2
24.
Using the data given above, what will be the unit product cost under absorption
costing?
a.
Rs. 22
b.
Rs. 28
c.
Rs. 30
d.
None of the given options
25.
Using the data given above, what will be the unit product cost under marginal
costing?
a.
Rs. 22
b.
Rs. 24
c.
Rs. 28
d.
None of the given options
26.
The break-even point is the point where:
a.
Total sales revenue equals total expenses (variable and fixed)
b.
Total contribution margin equals total fixed expenses
c.
Total sales revenue equals to variable expenses only
d.
Both a & b
27.
The break-even point in units is calculated using_______
a.
Fixed expenses and the contribution margin ratio
b.
Variable expenses and the contribution margin ratio
c.
Fixed expenses and the unit contribution margin
d.
Variable expenses and the unit contribution margin
28.
The margin of safety can be defined as:
a. The
excess of budgeted or actual sales over budgeted or actual variable expenses
b.
The excess of budgeted or actual sales over budgeted or actual fixed
expenses
c.
The excess of budgeted sales over the break-even volume of sales
d.
The excess of budgeted net income over actual net income
29.
The contribution margin ratio is calculated by using which one of the given
formula?
a.
(Sales - Fixed Expenses)/Sales
b.
(Sales - Variable Expenses)/Sales
c.
(Sales - Total Expenses)/Sales
d.
None of the given options
30.
Data of a company XYZ is given below
Particulars
Rs.
Sales
15,00,000
Variable
cost 9,00,000
Fixed
Cost 4,00,000
Break Even Sales in Rs. __________
a.
Rs. 1, 00,000
b.
Rs. 2, 00,000
c.
Rs. 13, 00,000
d.
None of the given options
1. Mr.
Zahid received Rs. 100,000 at the time of retirement. He has invested in a
profitable Avenue. From Company A, he received the dividend of 35% and from
Company B he received the dividend of 25%. He has selected Company A for
investment. His opportunity cost will
be:
a) 35,000
b) 25,000
c) 10,000
d) 55,000
2. In
increasing production volume situation, the behavior of Fixed cost &
Variable cost will be:
a) Increases,
constant
b) Constant,
increases
c) Increases,
decreases
d) Decreases,
increases
3. While
calculating the finished goods ending inventory, what would be the formula to
calculate per unit cost?
a) Cost
of goods sold / number of units sold
b) Cost
of goods to be manufactured / number of units manufactured
c)
Cost of goods manufactured / number of
units manufactured
d) Total
manufacturing cost / number of units manufactured
4. If
the direct labor is Rs. 42,000 and FOH is 40% of conversion cost. What will be
the amount of FOH?
a) 63,000
b) 30,000
c)
28,000
d) 16,800
5. Which
one of the following centers is responsible to earns sales revenue?
a) Cost
center
b) Investment
center
c)
Revenue center
d) Profit
center
6. Which
one of the following cost would not be termed as Product Costs?
a) Indirect
Material
b) Direct
Labor
c)
Administrative Salaries
d) Plant
supervisor’s Salary
7. Which
of the following ratios expressed that how many times the inventory is turning
over towards the cost of goods sold?
a) Inventory
backup ratio
b) Inventory
turnover ratio
c) Inventory
holding period
d) Both
A & B
8. When
opening and closing inventories are compared, if ending inventory is more than
opening inventory, it means that:
a)
Increase in inventory
b) Decrease
in inventory
c) Both
a and b
d) None
of the given options
9. The
total labor cost incurred by a manufacturing entity includes which one of the
following elements?
a) Direct
labor cost
b) Indirect
labor cost
c) Abnormal
labor cost
d)
All of the given options
Opening stock 1,000
units
Material Purchase 7,000
units
Closing Stock 500
units
Material consumed Rs. 7,500
What will be the inventory turnover ratio?
a)
10 Times
b) 12
times
c) 14.5
times
d) 9.5
times
Find out correct option from given MCQs & put your answer in above table:
1. A manufacturing company manufactures a
product which passes through two
departments.
10,000 units were put in process. 9,400 units were completed &
transferred
to department-II. 400 units (1/2 complete) were in process at the end of
month.
Remaining 200 units were lost during processing. Costs incurred by the
department
were as follows:
Particulars Rs.
Direct
Materials 19,400
Direct
Labor 24,250
Factory
overhead 14,550
Equivalent
units of material, for the month in CPR ____________
a.
200 units
b.
9400 units
c.
9600 units
d.
None of the given options
MCQ
# 2 and 3 are based on the following data:
Allied chemical company reported the
following production data for its department:
Particulars
Units
Received in from department –1 55,000
Transferred out department –3 39,500
In process (1/3 labor & overhead) 10,500
All materials were put in process in
Department No. 1. Costing department collected
following figures for department No. 2:
Particulars
Rs.
Unit cost received in 1.80
Labor cost in department No.2 27,520
Applied overhead in Department No. 2 15,480
2. Equivalent units of Material are _________
a.
3,500 units
b.
39,500 units
c.
43,000 units
d.
None of the given options Cost & Management Accounting (mgt402) Solution to Quiz 02
Special Semester 2007
3. Unit cost used for transferred out _________
a.
Rs. 0.64
b.
Rs. 0.36
c.
Rs. 0.18
d.
None of the given options
4. During January, Assembling department
received 60,000 units from preceding department at a unit cost of Rs. 3.54.
Costs added in the assembly department were:
Particulars
Rs.
Materials
41,650
Labor
101,700
Factory overheads 56,500
There was no work in process beginning
inventory.
Particulars
Units
Units from preceding department 60,000
Units transferred out 50,000
Units in process at the end of month
(all materials, 2/3converted)
9,000
Units lost (1/2 completed as to materials
& conversion cost ) 1,000
The entire loss is considered abnormal
& is to be charged to factory overhead.
Cost transferred to next department __________
a.
Rs. 55,703.3 App.
b.
Rs. 356,546.6 App.
c.
Rs. 412,249.9 App.
d.
None of the given options
MCQ # 5, 6, 7 and 8 are based on the
following data:
The following is the Corporation's
Income Statement for last month:
Particulars Rs.
Sales
4,000,000
Less: variable expenses 1,800,000
Contribution margin 2,200,000
Less: fixed expenses 720,000
Net income 1480,000Cost & Management Accounting
(mgt402) Solution to Quiz
02
Special Semester 2007
The company has no beginning or ending
inventories. A total of 80,000 units were
produced and sold last month.
5. What is the company's contribution margin
ratio?
a.
30%
b.
50%
c.
150%
d.
None of given options
6. What is the company's break-even in units?
a.
48,000 units
b.
72,000 units
c.
80,000 units
d.
None of the given options
7. How many units would the company have to sell to attain target profits of Rs.600,000?
a.
48,000 units
b.
88,000 units
c.
106,668 units
d.
None of given options
8. What is the company's margin of safety in Rs?
a.
Rs. 1,600,000
b.
Rs. 2,400,000
c.
Rs. 25,60,000
d.
None of given options
MCQ #
9 & 10 are based on the following data:
The
following data related to production of ABC Company:
Units
produced 2,000 units
Direct
materials Rs.6
Direct
labor Rs.10
Fixed
overhead Rs.20,000
Variable
overhead Rs.6 Cost & Management
Accounting (mgt402)
Solution to Quiz 02
Special
Semester 2007
Fixed
selling and administrative Rs.2000
Variable
selling and administrative Rs.2
9. Using the data given above, what will be the
unit product cost under absorption
costing?
a.
Rs. 32
b.
Rs. 30
c.
Rs. 25
d.
None of the given options
10.
Using the data given above, what will be the unit product cost under marginal
costing?
a.
Rs. 22
b.
Rs. 24
c.
Rs. 28
d.
None of the given options
11.
Mr.
Zahid received Rs. 100,000 at the time of retirement. He has invested in a profitable
Avenue. From Company A, he received the dividend of 35% and from Company B he
received the dividend of 25%. He has selected Company A for investment. His opportunity cost will be:
a) 35,000
b) 25,000
c) 10,000
d) 55,000
12.
In
increasing production volume situation, the behavior of Fixed cost &
Variable cost will be:
e) Increases,
constant
f)
Constant, increases
g) Increases,
decreases
h) Decreases,
increases
13.
While
calculating the finished goods ending inventory, what would be the formula to
calculate per unit cost?
e) Cost
of goods sold / number of units sold
f) Cost
of goods to be manufactured / number of units manufactured
g) Cost
of goods manufactured / number of units manufactured
h) Total
manufacturing cost / number of units manufactured
14.
If the
direct labor is Rs. 42,000 and FOH is 40% of conversion cost. What will be the
amount of FOH?
e) 63,000
f) 30,000
g) 28,000
h) 16,800
15.
Which
one of the following centers is responsible to earns sales revenue?
e) Cost
center
f) Investment
center
g) Revenue
center
h) Profit
center
16.
While
preparing the Cost of Goods Sold and Income Statement, the over applied FOH is;
e) Add
back, subtracted
f)
Subtracted, add back
g) Add
back, add back
h) Subtracted,
subtracted
17.
Which
of the following ratios expressed that how many times the inventory is turning
over towards the cost of goods sold?
e) Net
profit ratio
f) Gross
profit ratio
g) Inventory
turnover ratio
h) Inventory
holding period
18.
When
opening and closing inventories are compared, if ending inventory is more than
opening inventory, it means that:
e)
Increase in inventory
f) Decrease
in inventory
g) Both
a and b
h) None
of the given options
19.
The
total labor cost incurred by a manufacturing entity includes which one of the
following elements:
e) Direct
labor cost
f) Indirect
labor cost
g) Abnormal
labor cost
h)
All of the given options
20.
If,
Opening stock 1,000
units
Material Purchase 7,000
units
Closing Stock 500
units
Material
consumed Rs. 7,500
What
will be the inventory turnover ratio?
e)
10 Times
f) 12
times
g) 14.5
times
h) 9.5
times
1.
If Units sold = 10,000
Closing finished goods = 2,000
Opening finished goods = 1,500
What will be the value of units
manufactured?
a. 9,500
b. 10,500
c. 13,500
d. 6,500
2.
Calculate
the amount of direct labor if:
Direct material = 15,000
Direct labor = 70% of prime cost
a. 6,429
b. 30,000
c. 10,500
d. 35,000
3.
Material
cost = 4.00 per unit
Labor cost = 0.60 per unit
Factory overhead cost = 1.00 per
unit
Administrative cost = 1.20 per unit
Selling cost = 15% of sales
Profit = 1.02 per unit
What will be the sales price per
unit?
a. 6.0
b. 9.2
c. 7.0
d. None
of the given option
4.
ABC
& Company has maintained the following data of inventory control Under the
periodic inventory system:
|
Date |
Units |
Total |
|
Jan
01 |
100
@ 10 |
1000 |
|
Jan
05 |
100
@ 11 |
1100 |
|
Jan
10 |
150
@ 12 |
1600 |
During
the period 300 units were sold. Calculate the cost of ending inventory under
FIFO method.
a.
600
b. 500
c. 400
d. 300
5.
National
chains of tyre fitters stock a popular tyre for which the following information
is available:
Average usage = 140 tyres per day
Minimum usage = 90 tyres per day
Maximum usage = 175 tyres per day
Lead time = 10 to 16 days
Re-order quantity = 3000 tyres
Based on the above data calculate
the maximum level of stock possible:
a. 2800
b. 3000
c.
4900
d. 5800
Fill
in the blanks:
1. Irrelevant costs are those costs that would not
affect the current management decision.
2. Increase
in inventory means closing inventory is greater than the
opening inventory.
3. Weighted
average cost is used to determine the value of cost of consumption and ending inventory.
4. The
total amount earned in a week or month by an employee is called gross pay.
5. The
method of remuneration in which a worker is paid on the basis of production and
not time taken by him to perform the work is called piece rate wage.
1.
A cost
that remains unchanged across the relevant range of units produced is what kind
of cost?
a)
Fixed cost
b) Product
cost
c) Mixed
cost
d) Period
cost
2.
A
company has the following cost data for the month:
Conversion
cost: Rs. 78,900
Prime
Cost: Rs. 115,700
Beginning
Work in Process Inventory: Rs. 4,700
Ending
Work in Process Inventory: Rs. 2,800
Beginning
Finished Goods Inventory: Rs. 27,600
Ending
Finished Goods Inventory: Rs. 29,200
Manufacturing
Overhead Costs: Rs. 14,500
What
is the Cost of Goods Sold for the month?
a) Rs.
132,100
b) Rs.
116,000
c) Rs.
130,200
d) Rs. 130,500
3.
_____________________
is a part of cost of production report that explains the cost incurred during
the process.
a) Quantity
schedule
b) Cost
accounted for as follow
c)
Cost charged to the department
d) None
of the given options
4.
Under
Absorption Costing, Fixed Manufacturing Overheads are:
a) Absorbed
into Cost units
b) Charged
to the Profit and Loss account
c) Treated
as period cost
d) All
of the given options
5.
A
company makes one product, which has variable manufacturing costs of Rs.3.25
per unit and variable selling and administrative costs of Rs. 1.17 per unit.
Fixed manufacturing costs are Rs. 42,300 per month and fixed selling and administrative
costs are Rs. 29,900 per month. The company wants to earn an average monthly
profit of Rs. 15,000 and they expect to produce and sell an average of 40,000
units of the product per month. What is the minimum selling price management
can be expected to set to meet their profitability goals?
a) Rs.
4.69
b) Rs.
4.42
c)
Rs. 6.60
d) Rs.
6.23
Question
6 to 8 will be based on the data given below:
Units put in the process 7,000
Units completed and transferred out 5,000
Units still in process (100% Material, 50% Conversion
cost)
500 units were lost during process
Cost incurred during the process Material
and Labor Rs. 50,000 and Rs. 60,000.
6.
By
using the above information, find out the number of units that will appear in
quantity schedule.
a) 5,750
b) 7,000
c) 5,000
d) 6,500
7.
Find
out the value of per unit cost of both material and conversion cost.
a)
Material 7.69; Conversion cost 10.43
b) Material
7.14; Conversion cost 10.43
c) Material
7.14; Conversion cost 9.23
d) None
of the given options
8.
Find
the value of cost transferred to next department:
a) Rs.
5750
b) Rs.
5000
c) Rs.
7000
d) Rs.
6500 or None of the given options
9.
Opening
work in process inventory can be calculated under which of the following
method?
a)
FIFO and Average costing
b) LIFO
and Average costing
c) FIFO
and LIFO costing
d) None
of given options
10. _________________ needs further processing to improve its marketability.
a)
By product
b)
Joint
Product
c)
Augmented
product
d)
None of the
given options
1) The contribution margin increases when sales
volume and price remain
the
same and:
a)
Variable cost per unit decreases
b)
Variable cost per unit increases
c)
Fixed costs per unit increase
d)
All of the given options
2) The main difference between the incremental
and marginal cost is that:
a)
The marginal cost changes for every next unit of production
b)
Incremental cost does not show any change for any level of activity
c)
The marginal cost changes for a certain level of activity
d)
There is no difference between marginal cost and incremental cost
3) An example of an inventoriable cost would
be:
a) Shipping fees
b)
Advertising flyers
c)
Sales commissions
d) Direct materials
4) Service entities provide services of _______
to their customers.
a) Tangible products
b)
Intangible products
c)
Both tangible and intangible products
d)
Services can not be intangible
5) T
Corp. had net income before taxes of Rs. 200,000 and sales of Rs.
2,000,000.
If it is in the 50% tax bracket, its profit margin would be:
a) 5%
b) 12%
c) 20%
d) 25%
6)
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
7) A firm had Rs. 200,000 in sales, Rs. 120,000
of goods available for sale,
an
ending finished goods inventory of Rs. 20,000. Selling and
Administrative
expenses are Rs. 55,000. Which of the following is true?
a)
Net income was 22.5% of sales
b)
The cost of goods sold was Rs. 100,000
c)
The gross profit was Rs. 100,000
d)
All of the given options
8) A
complete set of Financial Statements for Hanery Company, at
December
31, 1999, would include each of the following, EXCEPT:
a)
Balance sheet as of December 31, 1999
b)
Income statement for the year ended December 31, 1999
c) Statement of projected cash flows
for 2000
d) Notes containing additional
information that is useful in
interpreting the
Financial Statements
9) 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
10)
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
11)
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
12)
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
13) 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
14)
Inventory of Rs. 96,000 was purchased during the year. The cost of
goods
sold was Rs. 90,000 and the ending
inventory was Rs. 18,000.
What
was the inventory turnover ratio for the year?
a) 5.0
b) 5.3
c) 6.0
d) 6.4
15)
While deducting Income Tax from the
gross pay of the employee, the
employer
acts as a (an) _________________for Income Tax Department.
a)
Agent of his own Company
b)
Paid tax collection agent
c)
Unpaid tax collection agent
d)
None of the given options
16) A
standard rate is paid to the employee when he completed his job:
a)
In time less than the standard
b)
In standard time
c)
In time more than standard
d)
Both In standard time or more than the standard time
17)
Reduction of labor turnover, accidents, spoilage, waste and
absenteeism
are the results of which of the following wage plan?
a)
Piece rate plan
b)
Time rate plan
c) Differential plan
d)
Group bonus system
18)
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
19)
When loss of time due to unavoidable interruptions is deducted from
theoretical
capacity the remainder is:
a) Normal capacity
b) Practical capacity
c) Expected capacity
d)
All of the given options
20) 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
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 is the best definition
of a by-product?
a) A
by-product is a product arising from a process where the wastage rate is
higher than a defined level
b) A by-product is a product arising
from a process where the sales
value is insignificant by comparison
with that of the main product or
products
c) A
by-product is a product arising from a process where the wastage rate is
unpredictable
d) A
by-product is a product arising from a process where the sales value is
significant by comparison with that of the
main product or products
3)
When two products are manufactured during a common process, the
factor
that determine whether the products are joint product or one
main
product and one is by product is the:
a)
Potential marketability for each product
b)
Amount of work expended in the production of each product
c)
Relative total sales value of each product
d) Management policy
4) Good Job Plc makes one product which sells
for Rs. 80 per unit. Fixed
costs
are Rs. 28,000 per month and marginal costs are Rs. 42 a unit.
What
sales level in units will provide a profit of Rs. 10,000?
a) 350 units
b) 667 units
c) 1,000 units
d) 1,350 units
5) Hyde Park Company produces sprockets that are
used in wheels. Each
sprocket
sells for Rs. 50 and the company sells approximately 400,000
sprockets
each year. Unit cost data for the year follows:
Direct material Rs. 15
Direct labor Rs. 10
Other costs:
Manufacturing
Distribution
Fixed
Rs. 5
Rs. 4
Variable
Rs. 7
Rs. 3
The unit cost of sprockets for direct cost
inventory purposes is:
a.
Rs. 44
b.
Rs. 37
c.
Rs. 32
d.
Rs. 35
6) Janet sells a product for Rs.6.25. The
variable costs are Rs.3.75. Janet's
break-even
units are 35,000. What is the amount of fixed costs?
a)
Rs. 87,500
b)
Rs. 35,000
c) Rs.131,250
d)
Rs. 104,750
7) A firm, which makes yachts, has fixed costs
of Rs. 260,000 per month.
The
product sells for Rs. 35,000 per boat, and the variable costs of
production
are Rs. 15,000 per boat. The boatyard can manufacture 20
boats
each month. What is the firms’ margin of safety at the moment?
a) 20%
b) 35%
c) 54%
d) 57%
8)
Which of the following is not one of the
requirements of the general
principles
of budgeting?
a.
Responsibility for forecasting costs must be clearly defined
b.
Changes are not to be made just because more favorable results are
foreseeable
c.
Accountability for actual results must be enforced
d.
Goals must be realistic and possible to attain
9) If B Limited shows required production of 120
cases of product for the
month,
direct labor per case is 3 hours at Rs.
12 per hour. Budgeted
labor
costs for the month should be:
a)
360 hours
b) Rs. 1,440
c) Rs. 4,320
d) Rs. 5,346
10)
Which of the following is not an explanation for rising profit levels at the
same
time as a cash shortage?
a)
Rapid expansion sales and output
b)
Repayment of loan
c)
Purchase of new premises
d)
Disposal of fixed assets for profit
