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Cost and Managerial Accounting
Cost and Managerial Accounting MCQs
?
Opening work in process inventory can be calculated as under
FIFO and Average costing
LIFO and Average costing
FIFO and LIFO costing
None of given option.
?
Which of the following statement measures the financial position of the entity on particular time?
Income Statement
Balance Sheet
Cash Flow Statement
Statement of Retained Earning
?
Which of the following is a characteristic of process cost accounting system?
Material, Labor and Overheads are accumulated by orders
Companies use this system if they process custom orders
Opening and Closing stock of work in process are related in terms of completed units
Only Closing stock of work in process is restated in terms of completed units
?
Fixed cost per unit decreases when ______________
Production volume increases.
Production volume decreases.
Variable cost per unit decreases.
Variable cost per unit increases.
?
Cost of production report is a ______________
Financial statement
Production Process report
Order Sheet
None of above
?
The difference between total revenues and total variable costs is known as ______________
Contribution margin
Gross margin
Operating income
Fixed costs
?
For which one of the following industry would you recommend a Process Costing system?
Grain dealer
Television repair shop
Law office
Auditor
?
How many units would the company have to sell to attain target profits of Rs. 600,000?
88,000 units
100,000 units
106,668 units
None of given options
?
Jan 1; finished goods inventory of Manuel Company was Rs.3, 00,000. During the year Manuel’s cost of goods sold was Rs. 19,00,000, sales were R...
Rs. 4,00,000
Rs. 6,00,000
Rs. 16,00,000
None of the given options
?
The Process of cost apportionment is carried out so that ______________
Cost may be controlled
Cost unit gather overheads as they pass through cost centers
Whole items of cost can be charged to cost centers
Common costs are shared among cost centers
?
Opportunity cost is the best example of ______________
Sunk Cost
Standard Cost
Relevant Cost
Irrelevant Cost
?
______________ method assumes that the goods received most recently in the stores or produced recently are the first ones to be delivered to the requi...
FIFO
Weighted average method
Most recent price method
LIFO
?
Percentage of Margin of Safety can be calculated in which one of the following ways?
Based on budgeted Sales
Using budget profit
Using profit & Contribution ratio
All of the given options
?
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....
Remains constant
Profits will increased
Company will have to face losses
None of the given options
?
The following is the Corporation’s Income Statement for last month: Particular Rs. Sales 4,000,000 Less: variable expenses 2,800,000 Contributi...
30%
70%
150%
None of given options
?
The cost expended in the past that cannot be retrieved on product or service ______________
Relevant Cost
Sunk Cost
Product Cost
Irrelevant Cost
?
A typical factory overhead cost is ______________
Audit
Compensation of plant manager
Design distribution
Internal
?
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 ...
Rs. 45,000
Rs. 15,000 Rs.
30,000
There will be no ending Inventory
?
Production volume of 1,200 units cost incurred Rs. 10,000 and production volume of 1,400 units cost incurred Rs.20,000. The variable cost per unit wou...
Rs. 50.00 per unit
Rs. 8.33 per unit
Rs. 14.20 per unit
Rs. 100 per unit
?
The components of the prime cost are
Direct Material + Direct Labor + Other Direct Cost
Direct Labor + Other Direct Cost + FOH
Direct Labor + FOH
None of the given options
?
Which of the following represents a CVP equation?
Sales = Contribution margin (Rs.) + Fixed expenses + Profits
Sales = Contribution margin ratio + Fixed expenses + Profits
Sales = Variable expenses + Fixed expenses + profits
Sales = Variable expenses - Fixed expenses + profits
?
Inventory control aims at ______________
Achieving optimization
Ensuring against market fluctuations
Acceptable customer service at low capital investment
Discounts allowed in bulk purchase
?
When a manufacturing process requires mostly human labor and there are widely varying wage rates among workers, what is probably the most appropriate ...
Machine hours
Cost of materials used
Direct labor hours
Direct labor dollars
?
When prices are rising over time, which of the following inventory costing methods will result in the lowest gross margin/profits?
FIFO
LIFO
Weighted Average
Cannot be determined
?
Cost accounting concepts include all of the following EXCEPT ______________
Planning
Controlling
Sharing
Delegating.
?
Prime cost + Factory overhead cost is ______________
Conversion cost.
Production cost.
Total cost.
None of given option.
?
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....
Rs.2,000
Rs. 5,000
Rs. 7,000
None of the given options
?
In the case of plant, the limiting factor may be:
Insufficient capacity
shortage of experienced salesmen
general shortage of power
shortage of materials
?
The the main difference between the profit center and investment center is
Decision making
Revenue generation
Cost in occurrence
Investment
?
The main purpose of cost accounting is to ______________
Maximize profits
Help in inventory valuation
Provide information to management for decision making
Aid in the fixation of selling price
?
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.
Rs. 10,000
Rs. 20,000
Rs. 70,000
Rs. 1,60,000
?
The following is the Corporation’s Income Statement for last month: Particular Rs. Sales 4,000,000 Less: variable expenses 2,800,000 Contributi...
48,000 units
72,000 units
80,000 units
None of the given options
?
Period costs are ______________
Expensed when the product is sold
Included in the cost of goods sold
Related to specific Period
Not expensed
?
Examples of industries that would use process costing include all of the following EXCEPT
Beverages
Food
Hospitality
Petroleum
?
Annual requirement is 7800 units; consumption per week is 150 units. Unit price Rs 5, order cost Rs 10 per order. Carrying cost Rs 1 per unit and lead...
365 units
300 units
250 units
150 units
?
An organization sold units 4000 and have closing finished goods 3500 units and opening finished goods units were 1000.The quantity of unit produced wo...
7500 units
6500 units
4500 units
5500 units
?
Which of these is not an objective of Cost Accounting?
Ascertainment of Cost
Determination of Selling Price
Cost Control and Cost reduction
Assisting Shareholders in decision making
?
Describe the cost unit applicable to the Bicycle industry:
per part of bicycle
per bicycle
per tonne
per day
?
Which of these is not a Material control technique:
ABC Analysis
Fixation of raw material levels
Maintaining stores ledger
Control over slow moving and non moving items
?
Which one out of the following is not an inventory valuation method?
FIFO
LIFO
Weighted Average
EOQ
?
Cost of abnormal wastage is:
Charged to the product cost
Charged to the profit & loss account
charged partly to the product and partly profit & loss account
not charged at all.
?
Costs associated with the labour turnover can be categorised into:
Preventive Costs only
Replacement costs only
Both of the above
Machine costs
?
A worker is allowed 60 hours to complete the job on a guaranteed wage of Rs. 10 per hour. Under the Rowan Plan, he gets an hourly wage of Rs. 12 per h...
Rs. 720
Rs. 540
Rs. 600
Rs. 900
?
During September, 300 labour hours were worked for a total cost of Rs 4800. The variable overhead expenditure variance was Rs 600. Overheads are assum...
Rs 14
Rs 16.50
Rs 17.50
Rs 18
?
A Local Authority is preparing cash Budget for its refuse disposal department. Which of the following items would not be included in the cash budget? ...
Capital cost of a new collection vehicle
Depreciation of the machinery
Operatives wages
Fuel for the collection Vehicles
?
A ltd is a manufacturing company that has no production resource limitations for the foreseeable future. The Managing Director has asked the company m...
(2), (3), (4), (5), (1)
(1), (5), (3), (4), (2)
(1), (4), (5), (3), (2)
(4), (5), (3), (1), (2)
?
A process costing system for J Co used an input of 3,500Kg of materials at Rs20 per Kg and labour hours of 2,750 at Rs25 per hour. Normal loss is 20% ...
Rs 142,485
Rs 146,183
Rs 149,746
Rs 152,986
?
State which of the following are the characteristics of service costing. 1. High levels of indirect costs as a proportion of total costs 2. Use of...
(1) only
(1) and (2) only
(2) only
(2) and (3) only
?
The following information is available for the W hotel for the latest thirty day period. Number of rooms available per night 40 Percentage occupancy...
Rs 3.25
Rs 5.00
Rs 97.50
Rs 150.00
?
After inviting tenders for supply of raw materials, two quotations are received as follows- Supplier P Rs. 2.20 per unit, Supplier Q Rs. 2.10 per uni...
22,000 units
20,000 units
21,000 units
None of the above.
?
Statutory cost audit are applicable only to:
Firm
Company
Individual
Society
?
The summarized balance sheet of Auto light Limited shows the balances of previous and current year of retained earnings Rs. 25,000 and Rs. 35,000. If ...
Rs. 5,000
Rs. 55,000
Rs. 15,000
Rs. 65,000
?
When the sales increase from Rs. 40,000 to Rs. 60,000 and profit increases by Rs. 5,000, the P/V ratio is ______________
20%
30%
25%
40%.
?
A profit centre is a centre
Where the manager has the responsibility of generating and maximising profits
Which is concerned with earning an adequate Return on Investment
Both of the above
Which manages cost
?
Sunk costs are:
relevant for decision making
Not relevant for decision making
cost to be incurred in future
future costs
?
Calculate value of closing stock from the following: Opening stock of finished goods (500 units) : Rs. 2,000 Cost of production (10000 units) : Rs. ...
Rs. 4,000
Rs. 4,500
Rs. 5,000
Rs. 6,000
?
Economic order quantity is that quantity at which cost of holding and carrying inventory is:
Maximum and equal
Minimum and equal
It can be maximum or minimum depending upon case to case.
Minimum and unequal
?
Calculate Re-order level from the following: Consumption per week: 100-200 units Delivery period: 14-28 days
5600 units
800 units
1400 units
200 units
?
Calculate re-order level from the following: Safety stock: 1000 units Consumption per week: 500 units It takes 12 weeks to reach material from the ...
1000 units
6000 units
3000 units
7000 units
?
Which of the following is not an avoidable cause of labor turnover:
Dissatisfaction with Job
Lack of training facilities
Low wages and allowances
Disability, making a worker unfit for work
?
Calculate the labour turnover rate according to Separation method from the following: No. of workers on the payroll: - At the beginning of the month...
4.55%
1.82%
6%
3%
?
Most suitable basis for apportioning insurance of machine would be:
Floor Area
Value of Machines
No. of Workers
No. of Machines
?
Which of the following is not a reason for an idle time variance?
Wage rate increase
Machine breakdown
Illness or injury to worker
Non- availability of material
?
The actual output of 162,500 units and actual fixed costs of Rs. 87000 were exactly as budgeted. However, the actual expenditure of Rs 300,000 was Rs...
Rs 1.20
Rs 1.31
Rs 1.42
Rs 1.50
?
S produces and sells one product, P, for which the data are as follows: Selling price Rs 28 Variable cost Rs 16 Fixed cost Rs 4 The fixed costs ar...
10.1% decrease
11.2% decrease
13.3% decrease
16.0% decrease
?
A company calculates the prices of jobs by adding overheads to the prime cost and adding 30% to total costs as a profit margin. Job number Y256 was so...
Rs 489
Rs 606
Rs 996
Rs 1300
?
A company makes a single product and incurs fixed costs of Rs. 30,000 per annum. Variable cost per unit is Rs. 5 and each unit sells for Rs. 15. Annua...
2,000 units
3,000 units
4,000 units
6,000 units
?
The cost per unit of a product manufactured in a factory amounts to Rs. 160 (75% variable) when the production is 10,000 units. When production increa...
Rs. 145
Rs. 150
Rs. 152
Rs. 140
?
____________ is a detailed budget of cash receipts and cash expenditure incorporating both revenue and capital items.
Cash Budget
Capital Expenditure Budget
Sales Budget
Overhead Budget
?
If credit sales for the year is Rs. 5,40,000 and Debtors at the end of year is Rs. 90,000 the Average Collection Period will be
30 days
61 days
90 days
120 days
?
Following information is available of PQR for year ended March, 2013: 4,000 units in process, 3,800 units output, 10% of input is normal wastage, Rs. ...
Rs. 2,500
Rs. 2,000
Rs. 4,000
Rs. 3,500
?
Responsibility Centre can be categorised into:
Cost Centres only
Profit Centres only
Investment Centres only
Cost Centres, Profit Centres and Investment Centres
?
Calculate the prime cost from the following information: Direct material purchased: Rs. 1,00,000 Direct material consumed: Rs. 90,000 Direct labour...
Rs. 1,80,000
Rs. 2,00,000
Rs. 1,70,000
Rs. 2,10,000
?
Bin Card is a
Quantitative as well as value wise records of material received, issued and balance;
Quantitative record of material received, issued and balance
Value wise records of material received, issued and balance
a record of labour attendance
?
Calculate EOQ (approx.) from the following details: Annual Consumption: 24000 units Ordering cost: Rs. 10 per order Purchase price: Rs. 100 per uni...
310
400
290
300
?
Calculate the value of closing stock from the following according to Weighted Average method: 1st January, 2014: Opening balance: 50 units @ Rs. 4 R...
Rs. 765
Rs. 805
Rs. 786
Rs. 700
?
Labour turnover means:
Turnover generated by labour
Rate of change in composition of labour force during a specified period
Either of the above
Both of the above
?
Overhead refers to:
Direct or Prime Cost
All Indirect costs
only Factory indirect costs
Only indirect expenses
?
Blanket overhead rate is:
One single overhead absorption rate for the whole factory
Rate which is blank or nil rate
rate in which multiple overhead rates are calculated for each production department, service department etc.
Always a machine hour rate
?
Budgeted sales of X for March are 18000 units. At the end of the production process for X, 10% of production units are scrapped as defective. Opening ...
12,960
14,400
15,840
16,000
?
In process costing, a joint product is
a product which is later divided into many parts
a product which is produced simultaneously with other products and is of similar value to at least one of the other products.
A product which is produced simultaneously with other products but which is of a greater value than any of the other products.
a product produced jointly with another organization
?
Which of the following organizations should not be advised to use service costing?
Distribution service
Hospital
Maintenance division of a manufacturing company
A light engineering company
?
A company manufactures a single product for which cost and selling price data are as follows: Selling price per unit - Rs. 12 Variable cost per unit...
20%
25%
73%
125%
?
In ’make or buy’ decision, it is profitable to buy from outside only when the supplier’s price is below the firm’s own ___...
Fixed Cost
Variable Cost
Total Cost
Prime Cost
?
For the financial year ended as on March 31, 2013 the figures extracted from the balance sheet of Xerox Limited as under: Opening Stock Rs. 29,000; P...
8 times
6 times
9 times
10 times
?
In element-wise classification of overheads, which one of the following is not included -
Fixed overheads
Indirect labour
Indirect materials
Indirect expenditure.
?
Cost Unit is defined as:
Unit of quantity of product, service or time in relation to which costs may be ascertained or expressed
A location, person or an item of equipment or a group of these for which costs are ascertained and used for cost control.
Centres having the responsibility of generating and maximising profits
Centres concerned with earning an adequate return on investment
?
Fixed cost is a cost:
Which changes in total in proportion to changes in output
which is partly fixed and partly variable in relation to output
Which do not change in total during a given period despise changes in output
which remains same for each unit of output
?
Conversion cost includes cost of converting ______________ into ______________
Raw material, WIP
Raw material, Finished goods
WIP, Finished goods
Finished goods, Saleable goods
?
Stores Ledger is a:
Quantitative as well as value wise records of material received, issued and balance;
Quantitative record of material received, issued and balance
Value wise records of material received, issued and balance
a record of labour attendance
?
Calculate the value of closing stock from the following according to LIFO method: 1st January, 2014: Opening balance: 50 units @ Rs. 4 Receipts: 5t...
Rs. 765
Rs. 805
Rs. 786
Rs. 700
?
If overtime is resorted to at the desire of the customer, then the overtime premium:
should be charged to costing profit and loss account;
should not be charged at all
should be charged to the job directly
should be charged to the highest profit making department
?
Which of the following is not a method of cost absorption?
Percentage of direct material cost
Machine hour rate
Labour hour rate
Repeated distribution method
?
Process B had no opening inventory. 13,500 units of raw material were transferred in at Rs 4.50 per unit. Additional material at Rs1.25per unit was ad...
Rs. 6562.50
Rs. 12,250.00
Rs. 14,437.50
Rs. 25,375.00
?
Calculate the most appropriate unit cost for a distribution division of a multinational company using the following information. Miles travelled 63...
Rs .88
Rs 1.50
Rs 15.84
Rs28, 140
?
A budget which is prepared in a manner so as to give the budgeted cost for any level of activity is known as:
Master budget
Zero base budget
Functional budget
Flexible budget
?
The summarized balance sheet of Rakesh udyog Limited shows the balances of previous and current year of provision for taxation Rs. 50,000 and Rs. 65,0...
Rs. 55,000
Rs. 85,000
Rs. 45,000
Rs. 1,85,000
?
Uncontrollable costs are the costs which be influenced by the action of a specified member of an undertaking.
can not
can
may or may not
must
?
Calculate cost of sales from the following: Net Works cost: Rs. 2,00,000 Office & Administration Overheads: Rs. 1,00,000 Opening stock of WIP: Rs. ...
Rs. 2,70,000
Rs. 2,80,000
Rs. 3,00,000
Rs. 3,20,000
?
In case of rising prices (inflation), FIFO method will:
provide lowest value of closing stock and profit
provide highest value of closing stock and profit
provide highest value of closing stock but lowest value of profit
provide highest value of profit but lowest value of closing stock
