Cost and Managerial Accounting Online MCQ Set 12

QN01. Credit and collection cost is an item of

  1. Selling overhead
  2. office overhead
  3. prime cost
  4. administrative overhead
Answer

(A)Selling overhead

QN02. In service costing, fixed charges are also called as ______________

  1. Standing charges
  2. variable charges
  3. fixed charges
  4. none of these
Answer

(A)Standing charges

QN03. ______________ budget is the preparation of budget starting from a clean state.

  1. Performance
  2. Zero Base
  3. Cash
  4. none of these
Answer

(B)Zero Base

QN04. When the completion stage of the contract is more than half, the profit to be credited to Profit and Loss account will be equal to ______________

  1. 1/3rd of Notional Profit x cash received
    Work certified
  2. ½ of Notional Profit x cash received
    Work certified
  3. 2/3rd of Notional profit x cash received
    Work certified
  4. full Notional Profit.
Answer

(C)

2/3rd of Notional profit x cash received
Work certified

QN05. Costing is a technique of

  1. Inventory control
  2. Management control
  3. Ascertainment of cost
  4. Calculation of cost
  5. Reduction of cost
Answer

(C)Ascertainment of cost

QN06. ______________ is an extension of job costing.

  1. Process costing
  2. Batch costing
  3. Contract costing
  4. Operation costing
  5. None of these
Answer

(B)Batch costing

QN07. ______________ costing is used in transport undertaking.

  1. Operating
  2. Standard
  3. marginal
  4. Absorption
  5. Service
Answer

(E)Service

QN08. Opportunity cost does not involve

  1. Cash inflow
  2. Cash outflow
  3. Cash outlay
  4. Either (a) or (b)
  5. None of these
Answer

(C)Cash outlay

QN09. Re-ordering level is = Maximum consumption x ______________

  1. Minimum consumption
  2. Maximum re-orders period
  3. Minimum re-orders period
  4. Both (a) and (b)
  5. None of these
Answer

(B)Maximum re-orders period

QN10. The two levels of material controls are quantity control and

  1. Financial control
  2. Value control
  3. Quality control
  4. Both (b) and (c)
  5. All of these
Answer

(A)Financial control

QN11. Bin card is a record of ______________ only.

  1. Quality
  2. quanity
  3. Numbers
  4. Value
  5. None
Answer

(B)quanity

QN12. Break-even analysis assumes that over the relevant range:

  1. Total costs are unchanged
  2. Unit variable costs are unchanged
  3. Variable costs are non-linear
  4. Unit fixed costs are unchanged
Answer

(B)Unit variable costs are unchanged

QN13. If fixed costs increased by 31,500 with no other cost or revenue factors changing, the break-even sales in units would be:

  1. 34,500
  2. 80,500
  3. 69,000
  4. 94,500
Answer

(B)80,500

QN14. Which of the following factors are not qualitative factors in a make or buy decision?

  1. Doubt as to the ability of the subcontractor to meet delivery dates
  2. Doubt as to ability of the subcontractor to maintain quality
  3. The case with which improvements can be made to the product
  4. The effect of redundancy on labour relations
Answer

(D)The effect of redundancy on labour relations

QN15. The basic research cost should be treated as:

  1. Product cost
  2. Production cost
  3. Production overhead
  4. Period cost
Answer

(C)Production overhead

QN16. The standard time required per unit of a product is 20 minutes. In a day of 8 working hours a worker had given an output of 30 units. If he gets a time rate of 20/hr., his total earnings under Halsey bonus scheme was:

  1. 200
  2. 192
  3. 180
  4. 16
Answer

(C)180

QN17. If an item of overhead expenditure is charged specifically to a single department this would be an example of:

  1. Apportionment
  2. Allocation
  3. Re-apportionment
  4. Absorption
Answer

(B)Allocation

QN18. under marginal costing:

  1. All costs are classified into two groups - variable and fixed
  2. Variable costs form part of the product cost and inventory valuation
  3. Fixed costs are treated as period costs
  4. All of the above
Answer

(D)All of the above

QN19. Analysis of selling and distribution overheads is done by:

  1. Nature of expenses and functions
  2. Areas, products and salesmen
  3. Types of customers and channels of distribution
  4. All of the above
Answer

(D)All of the above

QN20. Which of the following methods of depreciation results in fixed per unit cost of depreciation?

  1. Straight line
  2. Reducing balance
  3. Sinking fund
  4. Production unit
Answer

(D)Production unit

QN21. Obsolescence is the measure of the loss of value of an asset due to:

  1. Technological innovation
  2. Changes in market conditions
  3. Both (a) and (b) above
  4. None of the above
Answer

(C)Both (a) and (b) above

QN22. The treatment of idle time in cost includes the following

  1. Cost of normal and controllable idle time is charged to factory overheads
  2. Cost of normal but uncontrollable idle time is treated as prime cost
  3. Cost of abnormal and uncontrollable idle time is charged to costing profit and loss account
  4. All of the above
Answer

(D)All of the above

QN23. Avoidable causes of labour turnover include the following except:

  1. Redundancy
  2. Low wages
  3. Bad working conditions
  4. Marriage
Answer

(D)Marriage

QN24. Replacement costs of labour turnover include the following except:

  1. Loss of output
  2. Cost of personnel administration
  3. Cost of tool and machine breakage
  4. Cost of scrap and defective work
Answer

(B)Cost of personnel administration

QN25. Ratios which may be used for comparing labour cost over time include the following except:

  1. Gross profit ratio
  2. Efficiency ratio
  3. Illness ratio
  4. Absenteeism ratio
Answer

(A)Gross profit ratio

QN26. Which of the following is NOT a reason for carrying inventory?

  1. To maintain independence of operations
  2. To take advantage of economic purchase-order size
  3. To make the system less productive
  4. To meet variation in product dem
Answer

(C)To make the system less productive

QN27. The factors to be taken into consideration in formulating incentive schemes include:

  1. Quantity and quality of output
  2. Incidence of overhead, and effect upon workers
  3. Simplicity and legal provisions
  4. All of the above
Answer

(D)All of the above

QN28. In a profit sharing scheme the available surplus is shared by the following except:

  1. Government
  2. Shareholders
  3. Employees
  4. Firm
Answer

(A)Government

QN29. The authorized heads of deduction from wages payable include the following except:

  1. Car allowance
  2. Income tax
  3. Provident fund
  4. Employees'state insurance
Answer

(A)Car allowance

QN30. Suppose a firm sells its product at a price lower than the opportunity cost of the inputs used to produce it. Which is true?

  1. The firm will earn accounting and economic profits.
  2. The firm will face accounting and economic losses.
  3. The firm will face an accounting loss, but earn economic prfits.
  4. The firm may earn accounting profits, but will face economic losses.
Answer

(D)The firm may earn accounting profits, but will face economic losses.

QN31. Which of the following does not match? Item of cost Basis of cost allocation

  1. Power H.P. of machine
  2. Supervision of building value of materials consumed
  3. Insurance of building area occupied
  4. Time-keeping number of employees
Answer

(B)Supervision of building value of materials consumed

QN32. Which of the following costs is not a factory overhead expense?

  1. Depreciation of equipment used in the research department
  2. Salary of quality control inspector
  3. Overtime premium paid to direct labour
  4. Machine maintenance labour cost
Answer

(A)Depreciation of equipment used in the research department

QN33. The process of cost apportionment is carried out so that:

  1. Costs may be controlled
  2. Cost units gather overheads as they pass through cost centres
  3. Whole items of cost can be charged to cost centres
  4. Common costs are shared among cost centres
Answer

(D)Common costs are shared among cost centres

QN34. Idle capacity of a plant is defined as the difference between:

  1. Practical capacity and normal capacity
  2. Practical capacity and capacity based on sale expectancy
  3. Maximum capacity and actual capacity
  4. Maximum capacity and practical capacity
Answer

(B)Practical capacity and capacity based on sale expectancy

QN35. What will be the impact of normal loss on the overall per unit cost?

  1. Per unit cost will increase
  2. Per unit cost will decrease
  3. Per unit cost remain unchanged
  4. Normal loss has no relation to unit cost
Answer

(A)Per unit cost will increase

QN36. Under perpetual Inventory system at the end of the year:

  1. No closing entry passed
  2. Closing entry passed
  3. Closing value find through closing entry only
  4. None of the above.
Answer

(A)No closing entry passed

QN37. The components of factory overhead are as follows:

  1. Direct material + indirect material + direct expenses
  2. Indirect material + Indirect labor + others indirect cost
  3. Direct material + indirect expenses + indirect labor
  4. Direct labor + indirect labor + indirect expenses
Answer

(B)Indirect material + Indirect labor + others indirect cost

QN38. A firm Uses its own capital or Uses its owner's time and/or financial resources both are examples of

  1. Implicit Cost
  2. Explicit Cost
  3. Sunk Cost
  4. Relevant Cost
Answer

(A)Implicit Cost

QN39. Generally, the danger level of stock is fixed ______________ the minimum level

  1. Below
  2. Above
  3. Equal
  4. Danger level has no relation to minimum level
Answer

(B)Above

QN40. Sales are 450,000. Beginning finished goods were 23,000. Ending finished goods are 30,000. The cost of goods sold is 300,000. What is the cost of goods manufactured?

  1. 323,000
  2. 330,000
  3. 293,000
  4. None of the given options
Answer

(D)None of the given options

ed010d383e1f191bdb025d5985cc03fc?s=120&d=mm&r=g

DistPub Team

Distance Publisher (DistPub.com) provide project writing help from year 2007 and provide writing and editing help to hundreds student every year.