Cost and Management Accounting 30

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Objective Questions and Answers of MBA: Cost and Management Accounting 30

Subject: Objective Questions and Answers of MBA: Cost and Management Accounting 30

Part 30: Objective questions and answers of Cost and Management Accounting

 

Q1. The inventory method where the cost per unit is recomputed after every addition in the inventory is known as.

a) Specific identification method.

b) Moving average method.

c) Last-in- first – out method.

d) First-in-first-out method.

 

Q2. The capacity which is based on the long-term average of sales expectancy is known as:

a) Theoretical capacity

b) Operating capacity

c) Normal capacity

d) Derated capacity

 

Q3. The term maximum level represents:

a) The maximum stock level indicates the maximum quantity of an item of material which can be held in stock at any time.

b) The maximum stock level indicates the maximum quantity of an item of material which cannot be held in stock at any time.

c) The average stock level indicates the maximum quantity of an item of material which can be held in stock at any time.

d) The available stock level indicates the maximum quantity of an item of material which can be held in stock at any time.

 

Q4. The flux method of labor turnover denotes:

a) Workers appointed against the vacancy caused due to discharge or quitting of the organization

b) Workers appointed in replacement of existing employees

c) Workers employed under the expansion schemes of the company

d) The total change in the composition of labor force

 

Q5. In cost accounting, abnormal loss is charged to:

a) Factory overhead control account

b) Work in process account

c) Income statement

d) Entire production

 

Q6. In ______________ costing the cost of a group of products is ascertained.

a) Process

b) Job

c) Batch

d) Service

e) Marginal

 

Q7. When a manufacturing process requires mostly human labor and there are widely varying wage rates among workers, what is probably the most appropriate basis of applying factory costs to work in process?

a) Machine hours

b) Cost of materials used

c) Direct labor hours

d) Direct labor dollars

 

Q8. The period of time for which a work station is available for production but is not utilized due to shortage of tooling, materials, operators, etc. Is known as:

a) Down time

b) Operation time

c) Idle time

d) Set-up time

 

Q9. Group bonus schemes are generally suitable where:

a) Output depends on individual efforts

b) Output of individual workers can be measured easily

c) It is necessary to create a collective interest in the work

d) Normal loss rate is high

 

Q10. 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.

 

Q11. Direct labor is an element of:

a) Prime cost

b) Conversion cost

c) Total production cost

d) All of the given options

 

Q12. Foh absorption rate is calculated by the way of:

a) Estimated foh cost/direct labor hours

b) Estimated foh cost/no of units produced

c) Estimated foh cost/prime cost

d) All of the given options

 

Q13. Under periodic inventory system purchase of inventory is treated as:

a) Assets

b) Expense

c) Income

d) Liability

 

Q14. If labor is satisfied with high wages it may ultimately lead to:

a) Increased production and productivity

b) Increased efficiency

c) Reduced labor and overhead costs

d) All of the given options

 

Q15. The first in, first out method of pricing raw material issues, exhibits which one of the following features?

a) The issue price is recalculated each time new deliveries are made into stock.

b) The issue price is always at the latest price.

c) The goods are always issued strictly in the physical order in which they are received.

d) The issue price is always at the earliest price.

 

Q16. Data of a company xyz is given below particulars

sales 15,00,000

variable cost 9,00,000

fixed cost 4,00,000

break even sales in ______________

a) 1, 00,000

b) 2, 00,000

c) 13, 00,000

d) None of the given options

 

Q17. Annual requirement is 7800 units; consumption per week is 150 units. Unit price 5, order cost 10 per order. Carrying cost 1 per unit and lead time is 3 week, the economic order quantity would be:

a) 395 units

b) 300 units

c) 250 units

d) 150 units

 

Q18. Merit rating helps the following except:

a) Determining right worker for the right job/work

b) Delinking rewards with merits

c) Simplifying wage structure

d) Improving labour relations and reducing labour turnover

 

Q19. Xyz ltd has the following data relating to its assembly plant in the year ended 31 december 2012:’000

direct material costs 500

direct labour cost 250

assembly plant indirect costs 100

in addition, the stores department has total costs of 30,000 and spends 50% of its time

servicing the assembly plant. There were 50,000 labour hours worked and 25,000 machine

hours run in the assembly plant in 2012.

The overhead cost per direct labour hour was:

a) 2.0

b) 4.0

c) 2.3

d) 4.6

 

Q20. ______________ costing is suitable for mines, quarries, cement works etc.

a) Process

b) Contract

c) Batch

d) Operation

e) Job

 

Part 30: Objective questions and answers of Cost and Management Accounting

 

Q1. Answer b

 

Q2. Answer c

 

Q3. Answer a

 

Q4. Answer d

 

Q5. Answer b

 

Q6. Answer c

 

Q7. Answer c

 

Q8. Answer b

 

Q9. Answer c

 

Q10. Answer d

 

Q11. Answer d

 

Q12. Answer d

 

Q13. Answer b

 

Q14. Answer d

 

Q15. Answer c

 

Q16. Answer d

 

Q17. Answer b

 

Q18. Answer b

 

Q19. Answer c

 

Q20. Answer d

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