Cost and Management Accounting 25

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Objective Questions and Answers of MBA: Cost and Management Accounting 25

Subject: Objective Questions and Answers of MBA: Cost and Management Accounting 25

Part 25: Objective questions and answers of Cost and Management Accounting

 

Q1. When a firm doubles its inputs and finds that its output has more than doubled, this is known as:

a) Economies of scale.

b) Constant returns to scale.

c) Diseconomies of scale.

d) A violation of the law of diminishing returns.

 

Q2. Secondary packing expenses are:

a) Part of prime cost

b) Part of production overheads

c) Part of distribution overheads

d) Written-off to costing profit and loss account

 

Q3. Depreciation on plant and machinery is:

a) Not a cash cost, so is ignored in the cost accounts

b) Part of manufacturing overheads

c) Part of prime cost

d) Always calculated using the straight-line method

 

Q4. A manufacturing firm is very busy and is working overtime. The amount of overtime premium contained in direct wages would normally be classed as:

a) Part of prime cost

b) Factory overheads

c) Direct labour cost

d) Administrative overheads

 

Q5. (1) payment of higher wages does not necessarily mean that labour cost per unit is high.

(2) control over payment of wages aims at reducing or eliminating irregularities during

actual disbursements. True or false?

a) (1) and (2) true

b) (1) and (2) false

c) (1) false; (2) true

d) (1) true; (2) false

 

Q6. Which of the following bases would be most appropriate to apportion the cost of electric power to factory departments?

a) Number of outlet points

b) Amount metered out

c) Cubic capacity of premises

d) Kilowatt capacity of machines in department

 

Q7. A management consultancy recovers overheads on chargeable consulting hours.

Budgeted overheads were 6,15,000 and actual consulting hours were 32,150. Overheads, were under recovered by 35,000. If actual overheads, were 6,94,075, what was the budgeted overhead absorption rate per hour?

a) 19.13

b) 20.50

c) 21.59

d) 22.68

 

Q8. An investor invests in stock exchange he foregoes the opportunity to invest further in his hotel. The profit which the investor will be getting from the hotel is ______________.

a) Opportunity cost

b) Period cost

c) Product cost

d) Historical cost

 

Q9. Which of the following is / are element / s of production payroll?

a) Direct labor force wages

b) Administrative wages

c) Selling wages

d) All of the given options

 

Q10. Which of the following is not a method of pricing raw material issues from stock?

a) Standard costing.

b) Unit cost.

c) Marginal cost.

d) Continuous weighted average.

 

Q11. Fixed cost per unit decreases when:

a) Production volume increases.

b) Production volume decreases.

c) Variable cost per unit decreases.

d) Variable cost per unit increases.

 

Q12. The standard time required per unit of a product is 20 minutes. In a day of 8 working hours a worker gave an output of 30 units. If he gets a time rate of 20/hr., his total earnings under halsey bonus scheme was:

a) 200

b) 192

c) 180

d) 16

 

Q13. Which of the following is not an assumption underlying the accountant's break-even chart?

a) Fixed costs remain fixed throughout the range charted

b) Selling prices do not change

c) Variable costs fluctuate inversely with volume

d) Unit variable costs remain constant throughout the range charted

 

Q14. Functionally, administration expenses may comprise expenses of the following activities:

a) Secretarial and board of directors

b) Accounting, financing, tax and legal

c) Audit and personnel

d) All of these

 

Q15. Labour turnover can be measured by the following methods except:

a) Attrition method

b) Separation method

c) Replacement method

d) Flux method

 

Q16. In a perpetual inventory system, an inventory flow assumption (i.e. Lifo or fifo) is used primarily for determining costs which are used in

a) Forecasts of future sale.

b) Recording the cost of goods sold.

c) Recording sales revenue.

d) Forecasts of future operating results.

 

Q17. Opportunity cost is the best example of:

a) Sunk cost

b) Standard cost

c) Relevant cost

d) Irrelevant cost

 

Q18. Cost of goods manufactured can be calculated as follow 

a) Total factory cost add opening work in process inventory less closing work in process inventory

b) Total factory cost less opening work in process inventory add closing work in process inventory

c) Total factory cost less opening work in process inventory less closing work in process inventory

d) Total factory cost add opening work in process inventory add closing work in process inventory

 

Q19. When a manufacturing company has highly automated manufacturing plant producing many different products, the most appropriate basis for applying foh cost to work in process is:

a) Direct labor hours

b) Direct labor costs

c) Machine hours

d) Cost of material used

 

Q20. Marginal costing is also known as:

a) Indirect costing

b) Direct costing

c) Variable costing

d) Both (b) and (c)

 

Part 25: Objective questions and answers of Cost and Management Accounting

 

Q1. Answer a

 

Q2. Answer c

 

Q3. Answer b

 

Q4. Answer b

 

Q5. Answer a

 

Q6. Answer b

 

Q7. Answer b

 

Q8. Answer a

 

Q9. Answer d

 

Q10. Answer c

 

Q11. Answer a

 

Q12. Answer c

 

Q13. Answer c

 

Q14. Answer d

 

Q15. Answer a

 

Q16. Answer b

 

Q17. Answer c

 

Q18. Answer a

 

Q19. Answer b

 

Q20. Answer d

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