Cost and Managerial Accounting Online MCQ Set 6

QN01. Calculate workers left and discharged from the following: Labour turnover rates are 20%, 10% and 6% respectively under Flux method, Replacement method and Separation method. No. of workers replaced during the quarter is 80.

  1. 112
  2. 80
  3. 48
  4. 64
Answer

(C)48

QN02. Allotment of whole item of cost to a cost centre or cost unit is known as:

  1. Cost Apportionment
  2. Cost Allocation
  3. Cost Absorption
  4. Machine hour rate
Answer

(B)Cost Allocation

QN03. CG Co manufactures a single product T. Budgeted production output of product T during June is 200 units. Each unit of product T requires 6 labour hours for completion and CG Co anticipates 20 per cent idle time. Labour is paid at a rate of Rs7 per hour. The direct labour cost budget for March is

  1. Rs 6,720
  2. 8,400
  3. 10,080
  4. 10,500
Answer

(D)10,500

QN04. The P/v ratio of a company is 50% and margin of safety is 40%. If present sales is Rs. 30,00,000 then Break Even Point in Rs. will be

  1. Rs. 9,00,000
  2. Rs. 18,00,000
  3. Rs. 5,00,000
  4. None of the above
Answer

(B)Rs. 18,00,000

QN05. ABC analysis is an inventory control technique in which:

  1. Inventory levels are maintained
  2. Inventory is classified into A, B and C category with A being the highest quantity, lowest value.
  3. Inventory is classified into A, B and C Category with A being the lowest quantity, highest value
  4. Either b or c.
Answer

(C)Inventory is classified into A, B and C Category with A being the lowest quantity, highest value

QN06. Calculate the value of closing stock from the following according to FIFO method:
1st January, 2014: Opening balance: 50 units @ Rs. 4
Receipts:
5th January, 2014: 100 units @ Rs. 5
12th January, 2014: 200 units @ Rs. 4.50
Issues:
2nd January, 2014: 30 units
18th January, 2014: 150 units

  1. Rs. 765
  2. Rs. 805
  3. Rs. 786
  4. Rs. 700
Answer

(A)Rs. 765

QN07. Service departments costs should be allocated to:

  1. Only Service departments
  2. Only Production departments
  3. Both Production and service departments
  4. None of the production and service departments
Answer

(C)Both Production and service departments

QN08. Which of the following would explain an adverse variable production overhead efficiency variance?

  1. Employees were of a lower skill level than specified in the standard
  2. Unexpected idle time resulted from a series of machine breakdown
  3. Poor Quality material was difficult to process
  1. (1), (2) and (3)
  2. (1) and (2)
  3. (2) and (3)
  4. (1) and (3)
Answer

(D)(1) and (3)

QN09. Which of the following statements is/are correct?

  1. A materials requisition note is used to record the issue of direct material to a specific job.
  2. A typical job cost will contain actual costs for material, labour and production overheads, and non -production overheads are often added as a percentage of total production cost
  3. The job costing method can be applied in costing batches
  1. (1) only
  2. (1) and (2) only
  3. (1) and (3) only
  4. (2) and (3) only
Answer

(C)(1) and (3) only

QN10. A job is budgeted to require 3,300 productive hours after incurring 25% idle time. If the total labour cost budgeted for the job is Rs36,300. What is the labour cost per hour( to the nearest cent)?

  1. Rs 8.25
  2. Rs 8.80
  3. Rs 11.00
  4. Rs 14.67
Answer

(A)Rs 8.25

QN11. In case of rising prices (inflation), LIFO will:

  1. provide lowest value of closing stock and profit
  2. provide highest value of closing stock and profit
  3. provide highest value of closing stock but lowest value of profit
  4. provide highest value of profit but lowest value of closing stock
Answer

(A)provide lowest value of closing stock and profit

QN12. Capital gearing ratio is ______________.

  1. Market test ratio
  2. Long-term solvency ratio
  3. Liquid ratio
  4. urnover ratio
Answer

(B)Long-term solvency ratio

QN13. A transport company is running five buses between two towns, which are 50 kms apart. Seating capacity of each bus is 50 passengers. Actually passengers carried by each bus were 75% of seating capacity. All buses ran on all days of the month. Each bus made one round trip per day. Passenger kms are:

  1. 2,81,250
  2. 1,87,500
  3. 5,62,500
  4. None of the above
Answer

(C)5,62,500

QN14. ______________ is a summary of all functional budgets in a capsule form.

  1. Functional Budget
  2. Master Budget
  3. Long Period Budget
  4. Flexible Budget
Answer

(B)Master Budget

QN15. CA Co manufactures a single product and has drawn up the following flexed budget for the year.

60% 70% 80%
Rs Rs Rs
Direct materials 120,000 140,000 160,000
Direct labour 90,000 105,000 120,000
Production overheads 54,000 58,000 62,000
Other overheads 40,000 40,000 40,000
Total Cost 304,000 343,000 382,000
What would be the total cost in a budget that is prepared at the 77% level of activity?
  1. Rs 330,300
  2. Rs 370,300
  3. Rs 373,300
  4. Rs 377,300
Answer

(B)Rs 370,300

QN16. ______________ provides information for income determination.

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

(A)Financial accounting

QN17. ______________ includes financial and cost accounting, tax planning and tax accounting.

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

(C)management accounting

QN18. ______________ costing is a type or technique of costing.

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

(A)Marginal

QN19. Cost Accountancy is the science, art and ______________ of a cost accountant.

  1. Practice
  2. exercise
  3. hard work
  4. effort
Answer

(A)Practice

QN20. Cost accounting records both monetary and ______________ units.

  1. Physical
  2. cost
  3. both a & b
  4. none of these.
Answer

(A)Physical

QN21. Costing and cost accounting are ______________

  1. Not the same
  2. one and the same
  3. not related at all
  4. none of these.
Answer

(A)Not the same

QN22. ______________ is one which can be conveniently identified with and charged to a particular unit of cost.

  1. Direct cost
  2. Indirect cost
  3. Overhead
  4. none of these
Answer

(A)Direct cost

QN23. The primary emphasis of ______________ cost is on the planning function of management.

  1. Budgeted
  2. standard
  3. period
  4. none of these
Answer

(A)Budgeted

QN24. An opportunity cost is ______________

  1. the advantage foregone
  2. the cost
  3. the income
  4. none of the above.
Answer

(A)the advantage foregone

QN25. Depreciation is ______________ expenditure.

  1. fixed
  2. variable
  3. adjustable
  4. Semi-variable
Answer

(D)Semi-variable

QN26. Stores Ledger is maintained in the ______________

  1. Store
  2. finance department
  3. cost accounting department
  4. Both a & b
Answer

(C)cost accounting department

QN27. Material abstract is also known as ______________

  1. Material issue analysis sheet
  2. bill of materials
  3. stores ledger
  4. none of the above
Answer

(A)Material issue analysis sheet

QN28. Specific price method of valuing material issue is used when ______________

  1. Materials are purchased for specific job or work order
  2. materials are subject to natural wastage
  3. prices fluctuate
  4. none of these
Answer

(A)Materials are purchased for specific job or work order

QN29. The principle types of inventories are raw materials and, ______________ and finished goods

  1. Processed materials
  2. Goods-in-progress
  3. stored goods
  4. goods for dispatch
Answer

(B)Goods-in-progress

QN30. ______________ is a technique of stock control which leads to saving of time of the management because attention is required to be paid only to some of the items rather than on all the items.

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

(A)ABC Analysis

QN31. ______________ forms part of cost of production.

  1. Abnormal waste
  2. normal waste
  3. both a & b
  4. none of these
Answer

(B)normal waste

QN32. ______________ is a method of evaluating the job in terms of its money value.

  1. Job analysis
  2. Job evaluation
  3. work measurement
  4. Motion study
Answer

(B)Job evaluation

QN33. ______________ is the assessment of the relative worth of jobs within a company whereas ______________ is the assessment of the relative worth of man behind the job.

  1. Job evaluation, merit rating
  2. job analysis, job evaluation
  3. job analysis, merit rating
  4. none of these
Answer

(A)Job evaluation, merit rating

QN34. Taylors differential piece rate system provides for higher rate to ______________ workers.

  1. Inefficient
  2. efficient
  3. both a & b
  4. lazy
Answer

(B)efficient

QN35. Under Merrick's multiple piece rate system, 120% of the ordinary piece rate is given to workers whose level of performance is between ______________ of the standard output.

  1. 83% and 100%
  2. 100% and 120%
  3. 0% and 83%
  4. none of these
Answer

(B)100% and 120%

QN36. Basis of apportionment of stores service expenses is ______________

  1. Value of materials consumed
  2. units of material consumed
  3. products produced
  4. none of these
Answer

(A)Value of materials consumed

QN37. Machine hour rate is obtained by dividing the total running expenses of a machine during a particular period by the ______________

  1. Number of hours
  2. number of products produced
  3. number of workers
  4. wages
Answer

(A)Number of hours

QN38. Expenses incurred during production other than direct materials and direct labour are called ______________ factory expenses; those charged to production on estimated basis are called ______________

  1. Actual, applied
  2. applied, actual
  3. indirect, direct
  4. none of these
Answer

(A)Actual, applied

QN39. Salary paid to general manager is an item of ______________ expenses.

  1. Fixed
  2. Variable
  3. semi-variable
  4. estimated
Answer

(A)Fixed

QN40. Warehousing cost is an item of

  1. Office overhead
  2. distribution overhead
  3. material cost
  4. works overhead
Answer

(B)distribution overhead

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