Cost and Managerial Accounting Online MCQ Set 11

QN01. When actual loss is less than the estimated loss, the difference between the two is considered to be ______________

  1. Abnormal gain
  2. abnormal loss
  3. normal loss
  4. income
Answer

(A)Abnormal gain

QN02. Equivalent units represent the production of a process in terms of ______________ units.

  1. Completed
  2. total production
  3. semi-finished
  4. both a& c
Answer

(A)Completed

QN03. The process costing is not used in one of the following.

  1. Chemical
  2. textiles
  3. cement
  4. oil refining
Answer

(C)cement

QN04. ______________ budget is the most important budget and it forms the basis on which all the other budgets are built up.

  1. Production
  2. material
  3. cash budget
  4. sales
Answer

(D)sales

QN05. ______________ budget gives differentbudgeted costs for different levels of activity.

  1. Master
  2. Fixed
  3. Flexible
  4. all of these
Answer

(C)Flexible

QN06. ______________ determines the priorities of functional budget.

  1. Principal Budget Factor
  2. Limiting Factor
  3. both a & b
  4. none of the above.
Answer

(C)both a & b

QN07. In case of materials the key factor may be.

  1. Insufficient advertising
  2. restrictions imposed by quota
  3. low market demand
  4. shortage of power
Answer

(B)restrictions imposed by quota

QN08. The limitations of ______________ has led to the development of tandard costing system.

  1. Historical costing system
  2. cost accounting
  3. management accounting
  4. none of these
Answer

(A)Historical costing system

QN09. Standards set provide yardsticks against which ______________ are compared.

  1. Budgeted costs
  2. Estimated costs
  3. Actual costs
  4. None of these
Answer

(C)Actual costs

QN10. Material usage variance = standard price( ______________ )

  1. Standard usage-actual usage
  2. Standard unit price-actual unit price
  3. Standard quantity
  4. Actual quantity
Answer

(A)Standard usage-actual usage

QN11. The type of standard best suitable for cost control purpose is

  1. Basic standard
  2. Ideal standard
  3. Normal standard
  4. Expected standard
Answer

(D)Expected standard

QN12. ______________ is the oldest branch of accounting.

  1. Financial accounting
  2. cost accounting
  3. management accounting
  4. none of these
Answer

(A)Financial accounting

QN13. ______________ costing is a type or technique of costing.

  1. Absorption
  2. batch
  3. multiple
  4. job
Answer

(A)Absorption

QN14. The method of costing used in a refinery is ______________ costing.

  1. Process
  2. batch
  3. multiple
  4. job
Answer

(A)Process

QN15. Fixed cost ______________ in the same proportion in which output changes.

  1. does not change
  2. changes
  3. increases
  4. none of these.
Answer

(A)does not change

QN16. ______________ cost is irrecoverable cost.

  1. marginal
  2. out of pocket
  3. Sunk
  4. none of these
Answer

(C)Sunk

QN17. An opportunity cost does not involve ______________

  1. Cash outlays
  2. direct cost
  3. indirect cost
  4. none of the above
Answer

(A)Cash outlays

QN18. Material control does not cover the following stage.

  1. Purchase of materials
  2. storing of materials
  3. issue of materials
  4. production
Answer

(D)production

QN19. Last in first out method is suitable in times of ______________

  1. Rising prices
  2. falling prices
  3. fluctuating prices
  4. none of these
Answer

(A)Rising prices

QN20. Re-ordering level = Maximum consumption x ______________

  1. Average re-order period
  2. Maximum usage
  3. Maximum re-order period
  4. Normal usage
Answer

(C)Maximum re-order period

QN21. ______________ obviates the necessity for the physical checking of all items of stores at the end of the year and thereby avoids dislocation of production.

  1. ABC Analysis
  2. JIT Inventory System
  3. VED Analysis
  4. Perpetual Inventory System
Answer

(D)Perpetual Inventory System

QN22. Qualities demanded from the job holder is technically known as ______________

  1. Job description
  2. job specifications
  3. job evaluation
  4. both a & b
Answer

(B)job specifications

QN23. For a work order, standard time and time taken are 20 hours and 15 hours respectively. Time rate being Rs. 2 per hour, total wages payable under Rowan Premium Plan will be ______________

  1. 40
  2. 37.50
  3. 35
  4. none of these
Answer

(B)37.50

QN24. Under step method of re-apportionment of costs of service departments, the cost of last service department is apportioned only to the ______________

  1. Production departments
  2. service departments
  3. both a & b
  4. none of these
Answer

(A)Production departments

QN25. ______________ expenses are excluded from cost.

  1. Normal
  2. abnormal
  3. both a & b
  4. none of these
Answer

(B)abnormal

QN26. Primary packing is an item of
______________

  1. Selling overheads
  2. prime cost
  3. distribution overheads
  4. factory overheads
Answer

(B)prime cost

QN27. Material Costs of each job are de termined from ______________

  1. Material requisition notes
  2. bill of materials
  3. both a & b
  4. none of these
Answer

(C)both a & b

QN28. Service costing is called as ______________

  1. Operation costing
  2. Operating costing
  3. multiple costing
  4. none of these
Answer

(B)Operating costing

QN29. If the present cost of the car is Rs.1,00,000 residual value at the end of the 5th year is Rs.20,000, the monthly depreciation is ______________

  1. Rs.20,000
  2. Rs.16,000
  3. Rs.1,333
  4. Rs.17,333
Answer

(C)Rs.1,333

QN30. In inter process profits, the output of one process is transferred from one process to another not at ______________ but at ______________

  1. Market price, actual cost
  2. Actual cost, market price
  3. both a& b
  4. none of these
Answer

(B)Actual cost, market price

QN31. ______________ budget gives an estimate of the anticipated receipts and payment of cash during the budget period.

  1. Sales
  2. Production
  3. Cash
  4. Master
Answer

(C)Cash

QN32. Capacity Ratio=

  1. Number of actual working days in a period x 100
    Number of working days in the budget period
  2. Actual hours worked x 100
    Budgeted hours
  3. Standard hours for actual production x 100
    Actual hours worked
  4. Standard hours for actual productionx 100
    Budgeted standard hours
Answer

(B)

Actual hours worked x 100
Budgeted hours

QN33. The difference between fixed and variable cost has a special significance in the preparation of

  1. Flexible budget
  2. master budget
  3. cash budget
  4. sales budget
Answer

(A)Flexible budget

QN34. Management by exception is exercising control over ______________

  1. Costs
  2. Favourable items
  3. Unfavourable items
  4. all of these
Answer

(C)Unfavourable items

QN35. Material Usage Variance=Material Mix Variance + ______________

  1. Material Yield Variance
  2. Material cost variance
  3. Material price variance
  4. Material quantity variance
Answer

(A)Material Yield Variance

QN36. Volume Variance =

  1. Standard rate (Actual output-budgeted output)
  2. Actual output x standard rate-budgeted fixed overheads
  3. Standard rate per hour(standard hours produced-actual hours)
  4. All of the above
Answer

(D)All of the above

QN37. In automobile, ______________ costing is used

  1. Process
  2. batch
  3. multiple
  4. job
Answer

(C)multiple

QN38. ______________ is the cost which involves payment to outsiders.

  1. Out of pocket cost
  2. Imputed cost
  3. notional cost
  4. none of these
Answer

(A)Out of pocket cost

QN39. Material should be issued by the store keeper against ______________

  1. Material requisition
  2. bill of materials
  3. both a & b
  4. none of these
Answer

(C)both a & b

QN40. Inventory turnover ratio = Cost of inventory consumed during the period ÷ Cost of ______________ held during the period

  1. Average inventory
  2. minimum inventory
  3. maximum inventory
  4. none of these
Answer

(A)Average inventory

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