Cost and Management Accounting 23

Objective Questions and Answers of MBA: Cost and Management Accounting 23

Subject: Objective Questions and Answers of MBA: Cost and Management Accounting 23

Part 23: Objective questions and answers of Cost and Management Accounting

Q1. If time allowed for a job is 10 hours, time taken for the job is 8 hours and rate of pay is 2 per hour, the bonus to the worker is:

a) 1.20

b) 2.00

c) 3.20

d) None of the above

Q2. Which of the following systems of inventory valuation computes cost of goods sold as a residual amount?

a) Weighted average.

b) Last-in-first-out.

c) Periodic inventory system.

d) Specific identification.

Q3. (1) departmentalization of items of costs is known as primary distribution.

(2) redistribution of service departments, costs is known as secondary distribution. True or false?

a) And (2) true

b) And (2) false

c) False; (2) true

d) True; (2) false

Q4. Maximum capacity of a plant refers to its:

a) Theoretical capacity

b) Normal capacity

c) Practical capacity

d) Capacity based on sales expectancy

Q5. The hino corporation has a breakeven point when sales are 160,000 and variable costs at that level of sales are 100,000. How much would contribution margin increase or decrease, if variable expenses dropped by 20,000?

a) 37.5%.

b) 60%.

c) 12.5%.

d) 26%

Q6. Beginning goods in process were 15,000. The cost of goods manufactured is 245,000.

What is the cost assigned to the ending goods in process?

a) 45,000

b) 15,000

c) 30,000

d) There will be no ending inventory

Q7. In furniture manufacturing use of nail, pins, glue, and polish which use to increase its esteem value that cost is treated as:

a) Direct material cost

b) Indirect material cost

c) Foh cost

d) Prime cost

Q8. Which of the following cost is used in the calculation of cost per unit?

a) Total production cost

b) Cost of goods available for sales

c) Cost of goods manufactured

d) Cost of goods sold

Q9. A chemical process has normal wastage of 10% of input. In a period, 2,500 kg of material were input and there was abnormal loss of 75 kg. What quantity of good production was achieved?

a) 2,175 kg

b) 2,250 kg

c) 2,425 kg

d) 2,500 kg

Q10. What is the company's margin of safety in?

a) 1,600,000

b) 2,400,000

c) 25,60,000

d) None of the given options

Q11. The difference between total revenues and total variable costs is known as:

a) Contribution margin

b) Gross margin

c) Operating income

d) Fixed costs

Q12. If 120 units produced, 100 units were sold @ 200 per unit. Variable cost related to production & selling is 150 per unit and fixed cost is 5,000. If the management wants to decrease sales price by 10%, what will be the effect of decreasing unit sales price on profitability of company?

a) Remains constant

b) Profits will increased

c) Company will have to face losses

d) None of the given options

Q13. Find the value of purchases if raw material consumed 90,000; opening and closing stock of raw material is 50,000 and 30,000 respectively.

a) 10,000

b) 20,000

c) 70,000

d) 1,60,000

Q14. The methods of job evaluation include:

b) Ranking

c) Points value

d) All of the above

Q15. In a profit sharing scheme the available surplus is shared by the following except:

a) Government

b) Shareholders

c) Employees

d) Firm

Q16. If there has been an over recovery of overheads, at the end of the accounting period the amount concerned should be?

a) Debited to the company profit and loss account.

b) Credited to the company profit and loss account.

c) Carried forward to the next accounting period as a cost saving.

d) Used to reduce next period's overhead recovery rate.

Q17. When a business is faced with a limiting factor (one which limits the activity of an entity) and there is a choice to be made between options to follow, which of the following statements describes the optimal course of action?

a) Choose the option which gives the highest unit profit.

b) Choose the option which gives the highest unit contribution.

c) Aim to achieve a balance of activities covering all of the options.

d) Choose the option which gives highest contribution per unit of limiting factor.

Q18. The main types of costing for ascertaining costs do not include

a) Uniform costing

b) Standard costing

c) Marginal costing

d) Historical costing

Q19. An opportunity cost is a

a) Direct expense

b) Indirect expense

c) Variable expense

d) Fixed expense

e) Semi-variable expense

Q20. If happy ltd. Is subject to an effective income tax rate of 40%, the number of units happy ltd. Would have to sell to earn an after-tax profit of 90,000 is:

a) 1,00,000 units

b) 1,20,000 units

c) 1,12,000 units

d) 1,45,000 units

Part 23: Objective questions and answers of Cost and Management Accounting