Cost and Management Accounting 24

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Objective Questions and Answers of MBA: Cost and Management Accounting 24

Subject: Objective Questions and Answers of MBA: Cost and Management Accounting 24

Part 24: Objective questions and answers of Cost and Management Accounting

 

Q1. Wages analysis includes:

a) Gross wages per product

b) Gross wages per operation or department

c) Gross wages per labour classification

d) Analysis of constituent of gross wages – direct/ lost time

 

Q2. Example of semi-variable items includes the following except:

a) Telephone

b) Repairs and maintenance

c) Depreciation of plant and machinery

d) Insurance of plant and building

 

Q3. Which of the following is not a means whereby factory overheads can be charged out to production?

a) Direct labour rate

b) Overtime rate

c) Machine hour rate

d) Blanket rate

 

Q4. Alpha company purchased a machine worth rs 200,000 in the last year. Now that machine can be use in a new project which company has received this year. Now the cost of that machine is to be called:

a) Project cost

b) Sunk cost

c) Opportunity cost

d) Relevant cost

 

Q5. The fifo inventory costing method (when using a perpetual inventory system) assumes that the cost of the earliest units purchased is allocated in which of the following ways?

a) First to be allocated to the ending inventory

b) Last to be allocated to the cost of goods sold

c) Last to be allocated to the ending inventory

d) First to be allocated to the cost of goods sold

 

Q6. It is possible for an item of overhead expenditure to be shared amongst many departments. It is also possible that this same item may relate to just one specific department. If the item was not charged specifically to a single department this would be an example of:

a) Apportionment

b) Allocation

c) Re-apportionment

d) Absorption

 

Q7. The inventory turnover ratio is 5 times and numbers of days in a year is 365.inventory holding period in days would be

a) 100 days

b) 73 days

c) 50 days

d) 10 days

 

Q8. If a predetermined foh rate is not applied and the volume of production is reduced from the planned capacity level, the cost per unit expected to:

a) Remain unchanged for fixed cost and increase for variable cost

b) Increase for fixed cost and remain unchanged for variable cost

c) Increase for fixed cost and decrease for variable cost

d) Decrease for both fixed and variable costs

 

Q9. Which of the following would be considered a major aim of a job order costing system?

a) To determine the costs of producing each job or lot

b) To compute the cost per unit

c) To include separate records for each job to track the costs

d) All of the given option.

 

Q10. Which of the following ratios expressed that how many times the inventory is turning over towards the cost of goods sold?

a) Net profit ratio

b) Gross profit ratio

c) Inventory turnover ratio

d) Inventory holding period

 

Q11. The break-even point is the point where:

a) Total sales revenue equals total expenses (variable and fixed)

b) Total contribution margin equals total fixed expenses

c) Total sales revenue equals to variable expenses only

d) Both a & b

 

Q12. The main purpose of cost accounting is to:

a) Maximize profits.

b) Help in inventory valuation

c) Provide information to management for decision making

d) Aid in the fixation of selling price

 

Q13. Remuneration based on piece work is not suitable when:

1) The amount of output cannot be accurately measured.

2) The nature of work is repetitive.

3) The quantity of work is more important than quality.

a) (1) only

b) (3) only

c) (1) and (3)

d) (2) and (3)

 

Q14. Favorable conditions for the operation of piece rates include:

a) Homogeneous products

b) Long, uninterrupted run of production

c) Inspection

d) High proportion of indirect labour

 

Q15. Which of the following is a direct labour cost?

a) Supervisors'salaries in the factory.

b) Costs of the payroll accounting section.

c) A bonus paid to the store man.

d) The wages of an operative paid on the basis of output achieved.

 

Q16. The term = contribution' refers to?

a) The actual amount of profit made per unit.

b) The budgeted profit per unit.

c) The amount of profit which goes towards meeting the overheads of the business.

d) The difference between sales revenue and variable costs per unit.

 

Q17. Cost accountancy is the science, art and ______________ of cost accountant.

a) Profession

b) Management

c) Administration

d) Practice

e) All of these

 

Q18. When job is very big and spread over long periods of time the method of costing adopted is

a) Process

b) Job

c) Contract

d) Operation

e) Batch

 

Q19. Stock verification sheets are maintained to record the result of ______________ verification.

a) Conceptual

b) Physical

c) Economic

d) Detailed

e) All of these

 

Q20. Sun ltd. makes a single product which it sells for 10 per unit. Fixed costs are 48,000 per month and the product has a contribution to sales ratio of 40%. In a period when actual sales were 1, 40,000. Sun ltd.'s margin of safety in units was:

a) 2,000

b) 6,000

c) 8,000

d) 12,000

 

Part 24: Objective questions and answers of Cost and Management Accounting

 

Q1. Answer a

 

Q2. Answer d

 

Q3. Answer b

 

Q4. Answer d

 

Q5. Answer d

 

Q6. Answer a

 

Q7. Answer b

 

Q8. Answer b

 

Q9. Answer d

 

Q10. Answer c

 

Q11. Answer d

 

Q12. Answer c

 

Q13. Answer a

 

Q14. Answer b

 

Q15. Answer d

 

Q16. Answer d

 

Q17. Answer d

 

Q18. Answer c

 

Q19. Answer b

 

Q20. Answer a

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