Cost and Management Accounting 26

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Objective Questions and Answers of MBA: Cost and Management Accounting 26

Subject: Objective Questions and Answers of MBA: Cost and Management Accounting 26

Part 26: Objective questions and answers of Cost and Management Accounting

 

Q1. Which would be an implicit cost for a firm? The cost:

a) Of worker wages and salaries for the firm.

b) Paid for leasing a building for the firm.

c) Paid for production supplies for the firm.

d) Of wages foregone by the owner of the firm.

 

Q2. 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

 

Q3. 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.

 

Q4. Cost accounting is based on ______________ figures.

a) Approximated

b) Estimated

c) Historical

d) Either (a) or (c)

e) None of these

 

Q5. The quantity of material to be ordered at one time is known as

a) Eoq

b) Boq

c) Ebq

d) Re-order period

e) All of these

 

Q6. In a shutdown decision, one has to consider:

a) Contribution

b) Identifiable fixed cost, if any

c) Impact of shutdown on other products, if any

d) All of the above

 

Q7. Angle of incidence defines:

a) Systematic risk in capm model

b) Post bep relationship between total cost and total revenue

c) Incidental factors in investments

d) Marginal cost of production

 

Q8. For exercising control over selling and distribution overheads, the following techniques may be used:

a) Comparison with past results

b) Budgetary control

c) Standard costing

d) All of the above

 

Q9. Which of the following is not a possible method of accounting for administration overheads?

a) Include as part of production overheads

b) Apportion to production, selling and distribution functions

c) Treat administration as a separate entity and treat the costs as such

d) Transfer to costing profit and loss account

 

Q10. Preventive costs of labour turnover include the following except:

a) Cost of recruitment and training

b) Medical services

c) Welfare

d) Gratuity and pension

 

Q11. Contribution margin contributes to meet which one of the following options?

a) Variable cost

b) Fixed cost

c) Operating cost

d) Net profit

 

Q12. Which of the following is calculated by a formula that uses net sales as denominator?

a) Inventory turnover ratio

b) Gross profit rate

c) Return on investment

d) None of the given options

 

Q13. An overhead absorption rate is used to:

a) Share out common costs over benefiting cost canters

b) Find the total overheads for a cost centre

c) Charge overheads to products

d) Control overheads

 

Q14. If direct material = 12,000; direct labor = 8000 and other direct cost = 2000 then what will be the prime cost?

a) 12000

b) 14000

c) 20000

d) 22000

 

Q15. Which of the following statement is true about foh applied rates?

a) They are used to control overhead costs

b) They are based on actual data for each period

c) They are predetermined in advance for each period

d) None of the given

 

Q16. What is the company's break-even in units?

a) 48,000 units

b) 72,000 units

c) 80,000 units

d) None of the given options

 

Q17. Which of the following represents a cvp equation?

a) Sales = contribution margin (rs.) + fixed expenses + profits

b) Sales = contribution margin ratio + fixed expenses + profits

c) Sales = variable expenses + fixed expenses + profits

d) Sales = variable expenses -fixed expenses + profits

 

Q18. Which of the following are the characteristics of management accounting?

1) It must follow generally accepted accounting principles.

2) It is concerned with information for the internal use of management.

3) It emphasizes relevance and flexibility of data.

a) (1) and (2)

b) (1) and (3)

c) (2) and (3)

d) (1), (2) and (3)

 

Q19. The purposes served by preparation of payroll or wages sheet include:

a) Spreading the volume of work to be done

b) Computation of labour rate for each department

c) Comparing actual wages with budgeted wages for control

d) All of the above

 

Q20. A variable cost is?

a) One which varies in proportion to the level of fixed cost incurred.

b) One which tends to vary with the level of activity.

c) One which changes over time.

d) One which cannot be estimated with any great degree of accuracy.

 

Part 26: Objective questions and answers of Cost and Management Accounting

 

Q1. Answer d

 

Q2. Answer a

 

Q3. Answer d

 

Q4. Answer b

 

Q5. Answer a

 

Q6. Answer d

 

Q7. Answer b

 

Q8. Answer d

 

Q9. Answer a

 

Q10. Answer a

 

Q11. Answer b

 

Q12. Answer d

 

Q13. Answer c

 

Q14. Answer d

 

Q15. Answer c

 

Q16. Answer d

 

Q17. Answer c

 

Q18. Answer c

 

Q19. Answer d

 

Q20. Answer b

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