Cost and Management Accounting 21

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Objective Questions and Answers of MBA: Cost and Management Accounting 21

Subject: Objective Questions and Answers of MBA: Cost and Management Accounting 21

Part 21: Objective questions and answers of Cost and Management Accounting

 

Q1. Over applied foh will always result when a predetermined foh rate is applied and:

a) Production is greater than defined capacity

b) Actual overhead costs are less than budgeted overhead

c) Budgeted capacity is less than normal capacity

d) Actual overhead incurred is less than applied overhead

 

Q2. Which of the following is a mechanical device to record the exact time of the workers?

a) Clock card

b) Store card

c) Token system

d) Attendance register

 

Q3. A high inventory turnover may indicate:

a) An efficient use of the investment in inventory

b) A high risk of stock-outs

c) Stock position of store room

d) All of the given options

 

Q4. Which of the following is likely to be classified as a direct material cost of a motor car wheel?

a) The metal used to manufacture it.

b) The metal used to manufacture one of the tools used in the car wheel factory.

c) The cost of operating the raw material stores in the factory.

d) The cost of the quality operation on the finished car wheels.

 

Q5. The margin of safety can be defined as:

a) The excess of budgeted or actual sales over budgeted or actual variable expenses

b) The excess of budgeted or actual sales over budgeted or actual fixed expenses

c) The excess of budgeted sales over the break-even volume of sales

d) The excess of budgeted net income over actual net income

 

Q6. 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

 

Q7. Juniper limited's budgeted overhead in the last period was 170,000. Its overhead absorbed and incurred for the same period were 180,000 and 195,000 respectively. What is its amount of over- or under-absorption of overhead?

a) Under-absorption of 15,000

b) Under-absorption of 25,000

c) Over-absorption of 15,000

d) Over-absorption of 25,000

 

Q8. The objective of work study is:

a) Material conservation

b) Time saving

c) Quality improvement and cost reduction

d) All of the above

 

Q9. Non-monetary incentives may include the following except:

a) Health and safety

b) Housing facilities

c) Education and training

d) Dearness allowance

 

Q10. Production overheads are absorbed into production units by the use of an overhead absorption rate. Which one of the following best describes how the absorption rate is calculated?

a) Total number of units produced divided by the total cost centre overheads.

b) Total number of units produced multiplied by the unit overhead cost.

c) Total cost centre overheads divided by the cost centre activity level.

d) Total indirect costs for the business divided by the total number of units produced.

 

Q11. The break-even point is that at which:

a) The level of activity at which the business operates most economically.

b) The level of activity at which the business makes neither a profit nor a loss.

c) The fixed costs are lowest.

d) The variable cost per unit is minimized.

 

Q12. Continuous costing is also called

a) Operation costing

b) Process costing

c) Batch costing

d) Contract costing

e) None of these

 

Q13. The total of all direct expenses is known as

a) Total cost

b) Overhead

c) Prime cost

d) Work cost

e) None of these

 

Q14. The two aspects of material control are accounting aspect and ______________ aspect.

a) Financial

b) Economic

c) Social

d) Operational

e) None of these

 

Q15. Abc ltd. Has fixed costs of 60,000 p.a.. It manufactures a single product, which it sells for 20 per unit. Its contribution to sales ratio is 40%. Abc ltd's break-even point in units is: sts of

a) 3,000

b) 5,000

c) 7,500

 

Q16. A firm requires 16,000 nos. Of a certain component, which is buys at 60 each. The cost of placing an order and following it up is 120 and the annual storage charges works out to

10% of the cost of the item. To get maximum benefit the firm should place order for ______________ units at a time.

a) 1,000

b) 900

c) 800

d) 600

 

Q17. Objectives of research and development costs include:

a) Maintaining present competitive position

b) Improving enterprise's competitive position

c) Exploring now market/products

d) All of the above

 

Q18. Which of the following is not included in the objectives of maintenance of plant and machinery?

a) Reducing idle time

b) Reducing breakdown

c) Maintaining efficiency

d) Increasing life

 

Q19. Fringe benefits are those for which efforts of the workers are not necessary and may include the following except:

a) Holiday pay

b) Attendance bonus

c) Production bonus

d) Employer's contribution to p.f.

 

Q20. Which of the following techniques is not meant for labour cost control?

a) Budgetary control

b) Standard costing

c) Abc analysis

d) Ratio analysis

 

Part 21: Objective questions and answers of Cost and Management Accounting

 

Q1. Answer d

 

Q2. Answer a

 

Q3. Answer a

 

Q4. Answer a

 

Q5. Answer c

 

Q6. Answer b

 

Q7. Answer a

 

Q8. Answer d

 

Q9. Answer d

 

Q10. Answer c

 

Q11. Answer b

 

Q12. Answer b

 

Q13. Answer c

 

Q14. Answer d

 

Q15. Answer c

 

Q16. Answer c

 

Q17. Answer d

 

Q18. Answer d

 

Q19. Answer c

 

Q20. Answer c

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