Cost and Management Accounting 2

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Objective Questions and Answers of MBA: Cost and Management Accounting 2

Subject: Objective Questions and Answers of MBA: Cost and Management Accounting 2

Part 2: Objective questions and answers of Cost and Management Accounting

 

Q1. Opening work in process inventory can be calculated as under

a) FIFO and Average costing

b) LIFO and Average costing

c) FIFO and LIFO costing

d) None of given option.

 

Q2. Which of the following is a characteristic of process cost accounting system?

a) Material, Labor and Overheads are accumulated by orders

b) Companies use this system if they process custom orders

c) Opening and Closing stock of work in process are related in terms of completed units

d) Only Closing stock of work in process is restated in terms of completed units

 

Q3. Cost of production report is a ______________

a) Financial statement

b) Production Process report

c) Order Sheet

d) None of above

 

Q4. How many units would the company have to sell to attain target profits of Rs. 600,000?

a) 88,000 units

b) 100,000 units

c) 106,668 units

d) None of given options

 

Q5. The Process of cost apportionment is carried out so that ______________

a) Cost may be controlled

b) Cost unit gather overheads as they pass through cost centers

c) Whole items of cost can be charged to cost centers

d) Common costs are shared among cost centers

 

Q6. Opportunity cost is the best example of ______________

a) Sunk Cost

b) Standard Cost

c) Relevant Cost

d) Irrelevant Cost

 

Q7. Percentage of Margin of Safety can be calculated in which one of the following ways?

a) Based on budgeted Sales

b) Using budget profit

c) Using profit & Contribution ratio

d) All of the given options

 

Q8. The following is the Corporation's Income Statement for last month: Particular Rs. Sales

4,000,000 Less: variable expenses 2,800,000 Contribution margin 1,200,000 Liss: fixed expenses 720,000 Net income 480,000. The company has no beginning or ending inventories. A total of 80,000 units were produced and sold last month. What is the company's contribution margin ratio?

a) 30%

b) 70%

c) 150%

d) None of given options

 

Q9. The cost expended in the past that cannot be retrieved on product or service _______

a) Relevant Cost

b) Sunk Cost

c) Product Cost

d) Irrelevant Cost

 

Q10. Direct materials cost is Rs. 80,000. Direct labor cost is Rs. 60,000. Factory overhead is Rs. 90,000. Beginning goods in process were Rs. 15,000. The cost of goods manufactured is Rs. 245,000. What is the cost assigned to the ending goods in process?

a) Rs. 45,000

b) Rs. 15,000 Rs.

c) 30,000

d) There will be no ending Inventory

 

Q11. The The components of the prime cost are

a) Direct Material + Direct Labor + Other Direct Cost

b) Direct Labor + Other Direct Cost + FOH

c) Direct Labor + FOH

d) None of the given options

 

Q12. Which of the following represents a CVP equation?

a) Sales = Contribution margin (Rs.) + Fixed expenses + Profits

b) Sales = Contribution margin ratio + Fixed expenses + Profits

c) Sales = Variable expenses + Fixed expenses + profits

d) Sales = Variable expenses – Fixed expenses + profits

 

Q13. When a manufacturing process requires mostly human labor and there are widely varying wage rates among workers, what is probably the most appropriate basis of applying factory costs to work in process?

a) Machine hours

b) Cost of materials used

c) Direct labor hours

d) Direct labor dollars

 

Q14. Cost accounting concepts include all of the following EXCEPT ______________

a) Planning

b) Controlling

c) Sharing

d) Delegating.

 

Q15. If 120 units produced, 100 units were sold @ Rs. 200 per unit. Variable cost related to production & selling is Rs. 150 per unit and fixed cost is Rs. 5,000. If the management wants to increase sales price by 10%, what will be increasing sales profit of company by increasing unit sales price? (Cost & volume profit analysis keep in mind while solving)

a) Rs.2,000

b) Rs. 5,000

c) Rs. 7,000

d) None of the given options

 

Q16. The the main difference between the profit center and investment center is

a) Decision making

b) Revenue generation

c) Cost in occurrence

d) Investment

 

Q17. Find the value of purchases if Raw material consumed Rs. 90,000; Opening and closing stock of raw material is Rs. 50,000 and 30,000 respectively.

a) Rs. 10,000

b) Rs. 20,000

c) Rs. 70,000

d) Rs. 1,60,000

 

Q18. The following is the Corporation's Income Statement for last month: Particular Rs. Sales 4,000,000 Less: variable expenses 2,800,000 Contribution margin 1,200,000 Liss: fixed expenses 720,000 Net income 480,000 The company has no beginning or ending inventories. A total of 80,000 units were produced and sold last month. (Q.no. 36-39) What is the company's contribution margin ratio?What is the company's break-even in units?

a) 48,000 units

b) 72,000 units

c) 80,000 units

d) None of the given options

 

Q19. Examples of industries that would use process costing include all of the following EXCEPT

a) Beverages

b) Food

c) Hospitality

d) Petroleum

 

Q20. A An organization sold units 4000 and have closing finished goods 3500 units and opening finished goods units were 1000.The quantity of unit produced would be___________

a) 7500 units

b) 6500 units

c) 4500 units

d) 5500 units

 

Part 2: Objective questions and answers of Cost and Management Accounting

 

Q1. Answer a

 

Q2. Answer c

 

Q3. Answer b

 

Q4. Answer a

 

Q5. Answer d

 

Q6. Answer c

 

Q7. Answer d

 

Q8. Answer a

 

Q9. Answer b

 

Q10. Answer d

 

Q11. Answer a

 

Q12. Answer c

 

Q13. Answer c

 

Q14. Answer c

 

Q15. Answer a

 

Q16. Answer a

 

Q17. Answer c

 

Q18. Answer a

 

Q19. Answer c

 

Q20. Answer b

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