Cost and Management Accounting 6

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Objective Questions and Answers of MBA: Cost and Management Accounting 6

Subject: Objective Questions and Answers of MBA: Cost and Management Accounting 6

Part 6: Objective questions and answers of Cost and Management Accounting

 

Q1. In case of rising prices (inflation), fifo method will:

a) Provide lowest value of closing stock and profit

b) Provide highest value of closing stock and profit

c) Provide highest value of closing stock but lowest value of profit

d) Provide highest value of profit but lowest value of closing stock

 

Q2. Calculate workers recruited and joined from the following: labour turnover rates are 20%, 10% and 6% respectively under flux method, replacement method and separation method. No. Of workers replaced during the quarter is 80.

a) 112

b) 80

c) 48

d) 64

 

Q3. At co makes a single product and is preparing its material usage budget for next year.

Each unit of product requires 2kg of material, and 5,000 units of product are to be produced next year. Opening inventory of material is budgeted to be 800 kg and at co budgets to increase material inventory at the end of next year by 20% the material usage budget for next year is

a) 8,000 kg

b) 9,840 kg

c) 10,000 kg

d) 10,160 kg

 

Q4. A company's breakeven point is 6,000 units per annum. The selling price is rs. 90 per unit and the variable cost is rs. 40 per unit. What are the company's annual fixed costs?

a) Rs. 120

b) Rs. 2,40,000

c) Rs. 3,00,000

d) Rs. 5,40,000

 

Q5. Following information is available of xyz limited for quarter ended june, 2013

fixed cost rs. 5,00,000

variable cost rs. 10 per unit

selling price rs. 15 per unit

output level 1,50,000 units

what will be amount of profit earned during the quarter using the marginal costing technique?

a) Rs. 2,50,000

b) Rs. 10,00,000

c) Rs. 5,00,000

d) Rs. 17,50,000

 

Q6. Abnormal cost is the cost:

a) Cost normally incurred at a given level of output

b) Cost not normally incurred at a given level of output

c) Cost which is charged to customer

d) Cost which is included in the cost of the product

 

Q7. Total cost of a product: rs. 10,000

profit: 25% on selling price so profit is:

a) Rs. 2,500

b) Rs. 3,000

c) Rs. 3,333

d) Rs. 2,000

 

Q8. Which of the following is an abnormal cause of idle time?

a) Time taken by workers to travel the distance between the main gate of factory and place of their work

b) Time lost between the finish of one job and starting of next job

c) Time spent to meet their personal needs like taking lunch, tea etc.

d) Machine break downs

 

Q9. During a period 17, 500 labour hours were worked at a standard cost of rs 6.50 per hour. The labour efficiency variance was Rs 7,800 favourable. How many standard hours were produced?

a) 1,200

b) 16,300

c) 17,500

d) 18,700

 

Q10. Re-order level is calculated as:

a) Maximum consumption x maximum re-order period

b) Minimum consumption x minimum re-order period

c) 1/2 of (minimum + maximum consumption)

d) Maximum level – minimum level

 

Q11. Allotment of whole item of cost to a cost centre or cost unit is known as:

a) Cost apportionment

b) Cost allocation

c) Cost absorption

d) Machine hour rate

 

Q12. Abc analysis is an inventory control technique in which:

a) Inventory levels are maintained

b) Inventory is classified into a, b and c category with a being the highest quantity, lowest value.

c) Inventory is classified into a, b and c category with a being the lowest quantity, highest value

d) Either b or c.

 

Q13. Service department’s costs should be allocated to:

a) Only service departments

b) Only production departments

c) Both production and service departments

d) None of the production and service departments

 

Q14. Which of the following statements is/are correct?

A materials requisition note is used to record the issue of direct material to a specific job. A typical job cost will contain actual costs for material, labour and production overheads, and non –production overheads are often added as a percentage of total production cost The job costing method can be applied in costing batches

a) (1) only

b) (1) and (2) only

c) (1) and (3) only

d) (2) and (3) only

 

Q15. In case of rising prices (inflation), lifo will:

a) Provide lowest value of closing stock and profit

b) Provide highest value of closing stock and profit

c) Provide highest value of closing stock but lowest value of profit

d) Provide highest value of profit but lowest value of closing stock

 

Q16. ______________ is a summary of all functional budgets in a capsule form.

a) Functional budget

b) Master budget

c) Long period budget

d) Flexible budget

 

Q17. ______________ includes financial and cost accounting, tax planning and tax accounting.

a) Financial accounting

b) Cost accounting

c) Management accounting

d) None of these

 

Q18. Cost accounting records both monetary and ______________ units

a) Physical

b) Cost

c) Both a & b

d) None of these.

 

Q19. The primary emphasis of ______________ cost is on the planning function of management.

a) Budgeted

b) Standard

c) Period

d) None of these

 

Q20. Depreciation is ______________ expenditure.

a) Fixed

b) Variable

c) Adjustable

d) Semi-variable

 

Part 6: Objective questions and answers of Cost and Management Accounting

 

Q1. Answer b

 

Q2. Answer a

 

Q3. Answer c

 

Q4. Answer c

 

Q5. Answer a

 

Q6. Answer b

 

Q7. Answer c

 

Q8. Answer d

 

Q9. Answer d

 

Q10. Answer a

 

Q11. Answer b

 

Q12. Answer c

 

Q13. Answer c

 

Q14. Answer c

 

Q15. Answer a

 

Q16. Answer b

 

Q17. Answer c

 

Q18. Answer a

 

Q19. Answer a

 

Q20. Answer d

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