Cost and Management Accounting 22

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Objective Questions and Answers of MBA: Cost and Management Accounting 22

Subject: Objective Questions and Answers of MBA: Cost and Management Accounting 22

Part 22: Objective questions and answers of Cost and Management Accounting

 

Q1. ______________ is the time worked over and above the employee's basic working week.

a) Flex time

b) Overtime

c) Shift allowance

d) Commission

 

Q2. In order to ensure efficient functioning of the stores department and steady flow of materials to the production departments, the restocking of stores is duty of:

a) Managers

b) Storekeeper

c) Production in charge

d) Sales supervisor

 

Q3. The term minimum level represents.

a) The quantity below which the stock of any item should not be allowed to fall

b) The quantity below which the stock of any item should be allowed to fall

c) The estimated time period in number of days or in weeks or in months.

d) The lead time period in number of days or in weeks or in months.

 

Q4. What is the company's contribution margin ratio?

a) 30%

b) 50%

c) 150%

d) None of given options

 

Q5. The break-even point in units is calculated using ______________

a) Fixed expenses and the contribution margin ratio

b) Variable expenses and the contribution margin ratio

c) Fixed expenses and the unit contribution margin

d) Variable expenses and the unit contribution margin

 

Q6. The combination of direct material and direct labor is:-

a) Total production cost

b) Prime cost

c) Conversion cost

d) Total manufacturing cost

 

Q7. Prime cost + factory overhead cost is:

a) Conversion cost.

b) Production cost.

c) Total cost.

d) None of given option.

 

Q8. The distinction between direct and indirect labour helps to:

a) Measure efficiency of performance

b) Determine product cost more accurately

c) Ensure better cost analysis for decisions and control

d) All of the above

 

Q9. Contribution margin contributes to meet which one of the following options?

a) Variable cost

b) Fixed cost

c) Operating cost

d) Net profit

 

Q10. If a company uses predetermined overhead recovery rates and at the end of a period finds that there has been an under-recovery of overhead, which of the following best explains how the under-recovery has occurred?

a) Actual overhead cost has exceeded the amount used as a basis for the establishment of the predetermined rate.

b) Actual overhead cost has been less than the amount used as a basis for the establishment of the predetermined rate.

c) Actual activity levels were higher than planned due to an increase in demand.

d) An expected price increase in the overhead costs which was built into the overhead recovery rate did not take place.

 

Q11. Cost accounting has been developed because of ______________ of financial accounting.

a) Limitations

b) Expenditure

c) Statutory requirements

d) Both (a) and (b)

e) None of these

 

Q12. Value added is the change in

a) Face value

b) Market value

c) Book value

d) Realizable value

e) None of these

 

Q13. With regard to break -even charts and break-even analysis, which of the following is true?

a) It is assumed that variable cost fluctuates in direct proportion to output

b) The break the break-even point is at the intersection of the sales line and the variable cost line

c) A break-even chart shown the maximum profit possible

d) A break-even chart is capable of dealing with any change of product mix

 

Q14. Selling a product at a price equivalent to or below marginal cost is recommended for a short period in certain special circumstances, such as

a) Introducing a new product

b) Exploring foreign market

c) Driving out a weaker competitor

d) All of the above

 

Q15. A material loss during production or storage due to evaporation or shrinkage is called:

a) Scrap

b) Waste

c) Spoilage

d) Material loss

 

Q16. Which of the following definitions describe marginal cost?

a) The variable cost of one unit of product or service

b) A principle whereby variable costs are charged to cost units and the fixed costs attributable to the relevant period are written-off in full against the contribution for that period

c) Costs appropriate to aiding the making of specific management decisions

d) The price at which material identical to that which is used up could be replaced on the date of usage

 

Q17. For computing depreciation of an asset, the factors that are taken into consideration includes the following except:

a) Historical cost

b) Expected useful life

c) Insurance premium

d) Estimated residual value

 

Q18. Which of the following is not used as a base for apportionment of administration overheads?

a) Direct wages

b) Works cost

c) Conversion cost

d) Sales value

 

Q19. Which of the following is not a cost implication of labour turnover?

a) Training

b) Recruiting

c) Ageing labour force

d) Damage of machine

 

Q20. Which of the following is true regarding departmental rates?

a) A departmental absorption rate is a rate of absorption based upon the particular department's overhead cost and activity level

b) A departmental absorption rate is a rate of absorption not based upon the particular department's overhead cost and activity level

c) A single rate of absorption used throughout an organization's production facility and based upon its total production costs and activity

d) None of the given options

 

Part 22: Objective questions and answers of Cost and Management Accounting

 

Q1. Answer b

 

Q2. Answer b

 

Q3. Answer a

 

Q4. Answer b

 

Q5. Answer c

 

Q6. Answer b

 

Q7. Answer b

 

Q8. Answer d

 

Q9. Answer b

 

Q10. Answer a

 

Q11. Answer a

 

Q12. Answer b

 

Q13. Answer a

 

Q14. Answer d

 

Q15. Answer b

 

Q16. Answer a

 

Q17. Answer c

 

Q18. Answer a

 

Q19. Answer c

 

Q20. Answer a

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