Cost and Managerial Accounting Online MCQ Set 18

QN01. Bin card is maintained by

  1. Purchase department
  2. Production department
  3. Marketing department
  4. Stores keeper
  5. None of these
Answer

(D)Stores keeper

QN02. The following data relate to two output levels of a department:

Machine hours 17,000 18,500
Overheads () 2, 46,500 2,51,750
  1. 5,250
  2. 59,500
  3. 1,87,000
  4. 2, 46,500
Answer

(C)1,87,000

QN03. The process of distribution of overheads allotted to a particular department or cost center over the units produced is called:

  1. Allocation
  2. Apportionment
  3. Absorption
  4. Departmentalization
Answer

(C)Absorption

QN04. The methods of treating cost of small tools in cost accounts include

  1. Charging to expense
  2. Charging to stores
  3. Capitalizing in a small tools account
  4. All of the above
Answer

(D)All of the above

QN05. Which of the following does not influence the useful life of an asset?

  1. Expected physical wear and tear
  2. Cost of the asset
  3. Obsolescence
  4. Legal or other limits on the use of the asset
Answer

(B)Cost of the asset

QN06. In account ting for labourcost:

  1. A. direct labour cost and indirect labour cost are charged to prime cost
  2. Direct labour cost and indirect labour cost are charged to overheads
  3. Direct labour cost is charged to prime cost and indirect labour cost is charged to overheads
  4. All of the above
Answer

(C)Direct labour cost is charged to prime cost and indirect labour cost is charged to overheads

QN07. Cost of labour turnover may be treated as:

  1. Direct wages
  2. Prime cost
  3. Overhead
  4. None of the above
Answer

(C)Overhead

QN08. Which of the following is false regarding the LIFO method of inventory valuation?

  1. The material issue will be priced at the price of the material that is purchased last.
  2. The pattern of cash flow does not necessarily coincide with the actual flow pattern of materials.
  3. It permits management to influence net income by timing the purchases.
  4. LIFO determines closing inventory at recent costs.
Answer

(D)LIFO determines closing inventory at recent costs.

QN09. Inventory of 96,000 was purchased during the year. The cost of goods sold was 90,000 and the ending inventory was 18,000. What was the inventory turnover ratio for the year?

  1. 5.0 times
  2. 5.3 times
  3. 6.0 times
  4. 6.4 times
Answer

(D)6.4 times

QN10. Which of the following is not an example of marketing overheads?

  1. Salary of the foreman
  2. Publicity expenses
  3. Salaries of sales staff
  4. Secondary packing charges
Answer

(A)Salary of the foreman

QN11. According to Rowan premium plan, which of the following formula is used to calculate the bonus rate?

  1. (Time saved/time allowed) x 100
  2. (Time allowed/time saved) x 100
  3. (Actual time taken/time allowed) x 100
  4. (Time allowed/actual time taken) x 100
Answer

(A)(Time saved/time allowed) x 100

QN12. Wage, Rent & Materials are examples of:

  1. Implicit Cost
  2. Explicit Cost
  3. Direct Cost
  4. Manufacturing Cost
Answer

(B)Explicit Cost

QN13. The main difference between the profit center and investment center is:

  1. Decision making
  2. Revenue generation
  3. Cost incurrence
  4. Investment
Answer

(A)Decision making

QN14. All of the following are cases of labor turnover EXCEPT:

  1. Workers appointed against the vacancy caused due to discharge or quitting of the organization
  2. Workers employed under the expansion schemes of the company
  3. The total change in the composition of labor force
  4. Workers retrenched
Answer

(D)Workers retrenched

QN15. A disadvantage of an hourly wage plan is that it:

  1. Provides no incentive for employees to achieve and maintain a high level of production.
  2. Is hardly ever used and is difficult to apply.
  3. Establishes a definite rate per hour for each employee.
  4. Encourages employees to sacrifice quality in order to maximize earnings.
Answer

(A)Provides no incentive for employees to achieve and maintain a high level of production.

QN16. The following data relate to two activity levels of an out-patients'department in a hospital:

No. of consultations per patient 4,500 5,750
Overheads 2,69,750 2,89,125

Fixed overheads are 2,00,000 per period. The variable cost per consultation is

  1. 15.50
  2. 44.44
  3. 59.94
  4. none of the above
Answer

(A)15.50

QN17. A Ltd. Has sales of 2,200, total fixed cost of 570, variable cost of 1,540, raw material consumed of 1,100, number of units sold 22,000. What shall be the BEP 9in units) if raw material price is reduced by 2%?

  1. 18,387
  2. 18,560
  3. 18,750
  4. 19,000
Answer

(A)18,387

QN18. Which of the following is not included in functional classification of overheads?

  1. Repairs and maintenance
  2. Lubricating oil
  3. Consumable stores
  4. Chargeable expenses
Answer

(D)Chargeable expenses

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