Business Economics 17

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Objective Questions and Answers of MBA: Business Economics 17

Subject: Objective Questions and Answers of MBA: Business Economics 17

Part 17: Objective questions and answers of Cost and Managerial Accounting


Q1. Bin card is maintained by

a) Purchase department

b) Production department

c) Marketing department

d) Stores keeper

e) None of these


Q2. The methods of treating cost of small tools in cost accounts include

a) Charging to expense

b) Charging to stores

c) Capitalizing in a small tools account

d) All of the above


Q3. In account ting for labour cost:

a) Direct labour cost and indirect labour cost are charged to prime cost

b) Direct labour cost and indirect labour cost are charged to overheads

c) Direct labour cost is charged to prime cost and indirect labour cost is charged to overheads

d) All of the above


Q4. Which of the following is false regarding the LIFO method of inventory valuation?

a) The material issue will be priced at the price of the material that is purchased last.

b) The pattern of cash flow does not necessarily coincide with the actual flow pattern of materials.

c) It permits management to influence net income by timing the purchases.

d) LIFO determines closing inventory at recent costs.


Q5. Which of the following is not an example of marketing overheads?

a) Salary of the foreman

b) Publicity expenses

c) Salaries of sales staff

d) Secondary packing charges


Q6. Wages, Rent & Materials are examples of:

a) Implicit Cost

b) Explicit Cost

c) Direct Cost

d) Manufacturing Cost


Q7. All of the following are cases of labor turnover EXCEPT:

a) Workers appointed against the vacancy caused due to discharge or quitting of the organization

b) Workers employed under the expansion schemes of the company

c) The total change in the composition of labor force

d) Workers retrenched


Q8. The process of distribution of overheads allotted to a particular department or cost center over the units produced is called:

a) Allocation

b) Apportionment

c) Absorption

d) Departmentalization


Q9. Which of the following does not influence the useful life of an asset?

a) Expected physical wear and tear

b) Cost of the asset

c) Obsolescence

d) Legal or other limits on the use of the asset


Q10. Cost of labour turnover may be treated as:

a) Direct wages

b) Prime cost

c) Overhead

d) None of the above


Q11. 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?

a) 5.0 times

b) 5.3 times

c) 6.0 times

d) 6.4 times


Q12. According to Rowan premium plan, which of the following formula is used to calculate the bonus rate?

a) (Time saved/time allowed) x 100

b) (Time allowed/time saved) x 100

c) (Actual time taken/time allowed) x 100

d) (Time allowed/actual time taken) x 100


Q13. The main difference between the profit center and investment center is:

a) Decision making

b) Revenue generation

c) Cost incurrence

d) Investment


Q14. A disadvantage of an hourly wage plan is that it: 

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

b) Is hardly ever used and is difficult to apply.

c) Establishes a definite rate per hour for each employee.

d) Encourages employees to sacrifice quality in order to maximize earnings.


Q15. Real business cycle and new Keynesian models disagree upon

a) Whether people form their expectations rationally

b) Whether changes in unemployment are voluntary or involuntary

c) Whether individuals engage in optimizing behavior at all times

d) Whether changes in the money supply affect output in the long-run


Q16. The economist who said that international trade was based upon the concept of absolute advantage was:

a) David Ricardo

b) Adam Smith

c) J.S.Mill

d) Bertil Ohlin


Q17. Joint profits are maximized in the model cartel, which is model of:

a) Duopsony

b) Duopoly

c) Oligopoly

d) Oligopony


Q18. Advocates of the public-choice view argue that elected officials

a) Will always respond to inflation with expansionary policies but will respond to unemployment with restrictive policies

b) Will actively respond to inflation with restrictive policies but are reluctant to respond to unemployment with expansionary policies

c) Will always respond to both inflation and unemployment with expansionary policies

d) None of the above


Q19. Feudalistic economy is dominated by

a) Entrepreneur

b) Worker

c) Landlord

d) None of these


Q20. The real business cycle theory is most closely related to

a) Keynesian theory

b) Monetarist theory

c) The classical theory

d) The new Keynesian theory


Part 17: Objective questions and answers of Cost and Managerial Accounting


Q1. Answer d


Q2. Answer d


Q3. Answer c


Q4. Answer d


Q5. Answer a


Q6. Answer b


Q7. Answer d


Q8. Answer c


Q9. Answer b


Q10. Answer c


Q11. Answer d


Q12. Answer a


Q13. Answer a


Q14. Answer a


Q15. Answer b


Q16. Answer b


Q17. Answer c


Q18. Answer d


Q19. Answer c


Q20. Answer c

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