50. 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
51. Which of the following is/are the basic object/s of job analysis?
a. Determination of wage rates
b. Ascertain the relative worth of each
job
c. Breaking up job into its basic elements
d. All of the given options
52. Analysis of selling and distribution
overheads is done by:
a. Nature of expenses and functions
b. Areas, products and salesmen
c. Types of customers and channels of
distribution
d. All of the above
53. 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
54. Depreciation is a:
a. Measure of consumption of assets
b. Process of allocation and not of
valuation
c. Wear and tear due to use and/or lapse
of time
d. All of the above
55. Which of the following does not
influence the useful life of an asset?
a. Expected physical wear and tear
b. Cost of the asset
c. Obsolescence
d. Legal or other limits on the use of the
asset
56. For computing depreciation of an
asset, the factors that are taken into consideration include the following except:
a. Historical cost
b. Expected useful life
c. Insurance premium
d. Estimated residual value
57. 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
58. Which of the following methods of
depreciation results in fixed per unit cost of depreciation?
a. Straight line
b. Reducing balance
c. Sinking fund
d. Production unit
59. Types of maintenance include the
following except:
a. Routine
b. Overhaul
c. Emergency
d. Periodic
60. Which of the following is not included in the objectives of maintenance of plant and machinery?
a. Reducing idle time
b. Reducing breakdown
c. Maintaining efficiency
d. Increasing life
61. Regular maintenance expenses are :
a. Capitalized
b. Part of manufacturing overheads
c. Written-off to costing profit and loss
account
d. Part of prime cost
62. Obsolescence is the measure of the loss of value of an asset due to :
a. Technological innovation
b. Changes in market conditions
c. Both (a) and (b) above
d. None of the above
63. Which of the following is not a
production cause of idle capacity?
a. Set-up and change-over time
b. Lack of supervision and instruction
c. Lack of materials and tools
d. Strike
64. 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
65. 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
66. Which of the following is not used as
a base for apportionment of administration overheads?
a. Direct wages
b. Works cost
c. Conversion cost
d. Sales value
67. In account ting for labourcost:
labour cost are charged to prime cost
b. Direct labour cost and indirect labour
cost are charged to overheads
c. Direct labour cost is charged to prime
cost and indirect labour cost is charged to overheads
a. A. direct labour cost and indirect
d. All of the above
68. Productive causes of idle time include
the following except :
a. Power failure
b. Fall in demand
c. Machine breakdown
d. Waiting for materials, tools,
instructions, etc.
69. The treatment of idle time in cost
includes the following:
a. Cost of normal and controllable idle
time is charged to factory overheads
b. Cost of normal but uncontrollable idle
time is treated as prime cost
c. Cost of abnormal and uncontrollable
idle time is charged to costing profit and loss account
d. All of the above
70. Overtime premium may be treated,
depending on the circumstances, as:
a. Part of direct wages
b. Part of production overheads
c. Part of capital order
d. All of the above
71. 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
72. Fringe benefits are those for which
efforts of the workers are not necessary and may include the following except:
a. Holiday pay
b. Attendance bonus
c. Production bonus
d. Employer‘s contribution to P.F.
73. Avoidable causes of labour turnover
include the following except:
a. Redundancy
b. Low wages
c. Bad working conditions
d. Marriage
74. The unavoidable causes of labour turnover include the following except:
a. Personal betterment
b. Dissatisfaction with the job
c. Illness
d. Retirement
75. Labour turnover can be measured by
the following methods except:
a. Attrition method
b. Separation method
c. Replacement method
d. Flux method
76. At the start of the quarter there were
14,630 workers. 750 employees left during the quarter while 600 joined the organization during the same period. Using the flux method, the labour turnover was:
a. 5.13%
b. 9.23%
c. 9.32%
d. 9.28%
77. Which of the following is not a cost
implication of labourturnover?
a. Training
b. Recruiting
c. Ageing labour force
d. Damage of machine
78. Preventive costs of labour turnover
include the following except:
a. Cost of recruitment and training
b. Medical services
c. Welfare
d. Gratuity and pension
79. Replacement costs of labour turnover
include the following except :
a. Loss of output
b. Cost of personnel administration
c. Cost of tool and machine breakage
d. Cost of scrap and defective work
80. Cost of labour turnover may be
treated as :
a. Direct wages
b. Prime cost
c. Overhead
d. None of the above
81. 1) labour cost control leads to
minimization of cost of labour per unit of output. (2) When labour cost is fixed nature, any reduction in total labour cost may not result in lower cost per unit. True or false?
(a. (1) True; (2) False
b. (1) False; (2) True
c. (1) and (2) False
82. Labour cost control embraces the
following activities except:
a. Recruitment and promotion
b. Formulation of wage policy and
payment and accounting for wages
c. Allocation of cost
d. Preparation of financial statement
83. (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
84. Which of the following techniques is
not meant for labour cost control?
a. Budgetary control
b. Standard costing
c. ABC analysis
d. Ratio analysis
85. Ratios which may be used for
comparing labour cost over time include the following except :
a. Gross profit ratio
b. Efficiency ratio
c. Illness ratio
d. Absenteeism ratio
86. Cost of production is equal to
a. Prime costs+ other manufacturing
costs.
b. Production costs + Administration
expenses.
c. Prime costs + Manufacturing costs +
Opening W.I.P – Closing W.I.P.
d. None of the above.
87. The cost of goods sold is equal to
a. Total Purchases - Total Sales.
b. Opening stock + Total Purchase.
c. Opening stock - Total Purchases
+Closing Stock+ Direct Costs.
d. Opening stock + Total Purchases –
Closing Stock + Direct Costs.
88. Which of the following is false
regarding the LIFO method of inventory valuation?
a. The material issue will be priced at the price of the material that is purchased last.
b. The pattern of cash flow does not
necessarily coincide with the actual flow pattern of materials.
d. LIFO determines closing inventory at
recent costs.
89. Which of the following is NOT a
operations
purchase-order size
c. To make the system less productive
d. To meet variation in product dem
c. It permits management to influence net income by timing the purchases.
reason for carrying inventory?
a. To maintain independence of
b. To take advantage of economic
90. Which of the following is TRUE regarding Departmental Rates.
a. A departmental absorption rate is a rate of absorption based upon the particular department's overhead cost and activity level
b. A departmental absorption rate is a rate
of absorption not based upon the particular department's overhead cost and activity level
c. A single rate of absorption used
throughout an organization‘s production facility and based upon its total production costs and activity
d. None of the given options
91. Inventory of ` 96,000 was purchased during the year. The cost of goods sold was ` 90,000 and the ending inventory was ` 18,000. What was the inventory turnover ratio for the year?
a. 5.0 times
b. 5.3 times
c. 6.0 times
d. 6.4 times
92. 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.
93. The factors to be taken into
consideration in formulating incentive schemes include:
a. Quantity and quality of output
b. Incidence of overhead, and effect
upon workers
c. Simplicity and legal provisions
d. All of the above
94. Contribution margin contributes to meet which one of the following options ?
a. Variable cost
b. Fixed cost
c. Operating cost
d. Net profit
95. 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
96. If time allowed for a job is 10 hours, time taken for the job is 8 hours and rate of pay is ` 2 per hour, the bonus to the worker is :
a. ` 1.20
b. ` 2.00
c. ` 3.20
d. None of the above
97. 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
98. In a profit sharing scheme the
available surplus is shared by the following except:
a. Government
b. Shareholders
c. Employees
d. Firm
99. Non-monetary incentives may include
the following except:
a. Health and safety
b. Housing facilities
c. Education and training
d. Dearness allowance
100. 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
101. The authorized heads of
deduction from wages payable include the following except :
a. Car allowance
b. Income tax
c. Provident fund
d. Employees‘state insurance
102. Wages analysis include :
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
103. 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.
104. Which of the following inventory valuation methods shows higher profits during the period of rising prices?
a. FIFO method.
b. LIFO method.
c. Weighted average method.
d. Simple average method.
105. Which of the following systems of inventory valuation computes cost of goods sold as a residual amount?
a. Weighted Average.
b. Last-in-First-out.
c. Periodic Inventory System.
d. Specific Identification.
106. 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
121. Overhead expenses can be classified
according to:
a. Functions
b. Elements
c. Behavior
d. All of the above
122. Which of the following is not
included in functional classification of overheads?
a. Repairs and maintenance
b. Lubricating oil
c. Consumable stores
d. Chargeable expenses
123. Which of the following is not an
example of marketing overheads?
a. Salary of the foreman
c. Salaries of sales staff
d. Secondary packing charges
124. Some overhead charges tend to vary
almost directly, some tend to remain constant while some again vary in part with the volume and in part remain constant. This statement describes sequentially the following:
a. Variable, fixed and semi-variable
overheads
b. Fixed, semi-variable and variable
overheads
c. Semi-variable, variable and fixed
overheads
d. Variable, semi-variable and fixed
125. Suppose a firm sells its product at a
price lower than the opportunity cost of the inputs used to produce it. Which is true?
a. The firm will earn accounting and
economic losses.
b. Publicity expenses
overheads
economic profits.
b. The firm will face accounting and
c. The firm will face an accounting loss,
but earn economic profits.
d. The firm may earn accounting profits,
but will face economic losses.
126. Example of semi-variable items
include the following except:
a. Telephone
b. Repairs and maintenance
c. Depreciation of plant and machinery
d. Insurance of plant and building
127. Direct Labor is an element of:
a. Prime cost
b. Conversion cost
c. Total production cost
d. All of the given options
128. Which of the following is not a
production department?
a. Power department
b. Machining department
c. Refining department
d. Finishing department
129. Which of the following does not
match?
Item of cost Basis of cost allocation
a. Power H.P. of machine
b. Supervision of building value of
materials consumed
c. Insurance of building area occupied
d. Time-keeping number of employees
130. (1) Departmentalization of items of
costs is known as primary distribution.
(2) Redistribution of service departments, costs is known as secondary distribution. True or false?
a. (1) and (2) true
b. (1) and (2) false
c. (1) False; (2) True
d. (1) True; (2) False
131. Which of the following costs is not a
factory overhead expense?
a. Depreciation of equipment used in the
research department
b. Salary of quality control inspector
c. Overtime premium paid to direct
labour
d. Machine maintenance labour cost
132. 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
133. A method of dealing with overheads
involves spreading common costs over cost centres on the basis of benefit received. This is known as
a. Overhead absorption
b. Overhead apportionment
c. Overhead identification
d. Overhead analysis
134. The process of cost apportionment
is carried out so that :
a. Costs may be controlled
b. Cost units gather overheads as they
pass through cost centres
c. Whole items of cost can be charged to
cost centres
d. Common costs are shared among cost
centres
135. 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
136. 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
137. 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
138. Idle capacity of a plant is defined as
the difference between:
a. Practical capacity and normal capacity
b. Practical capacity and capacity based
on sale expectancy
c. Maximum capacity and actual capacity
d. Maximum capacity and practical
capacity
139. 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
140. Maximum capacity of a plant refers
to its:
a. Theoretical capacity
b. Normal capacity
c. Practical capacity
d. Capacity based on sales expectancy
141. 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
142. What will be the impact of normal
loss on the overall per unit cost?
a. Per unit cost will increase
b. Per unit cost will decrease
c. Per unit cost remain unchanged
d. Normal loss has no relation to unit
cost
143. 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
144. 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
145. Which of the following is/are not
associated with ordering costs?
a. Interest
b. Insurance
c. Opportunity costs
d. All of the given options
146. Under perpetual Inventory system at
the end of the year:
a. No closing entry passed
b. Closing entry passed
c. Closing value find through closing
entry only
d. None of the above.
147. The Hino Corporation has a
breakeven point when sales are ` 160,000 and variable costs at that level of sales are ` 100,000. How much would contribution margin increase or decrease, if variable expenses dropped by ` 20,000?
a. 37.5%.
b. 60%.
c. 12.5%.
d. 26%
148. The short run is a time period in
which:
a. All resources are fixed.
b. The level of output is fixed.
c. The size of the production plant is
variable.
d. Some resources are fixed and others
are variable
149. Opportunity cost is the best example
of:
a. Sunk Cost
b. Standard Cost
c. Relevant Cost
d. Irrelevant Cost
150. The components of factory
overhead are as follows:
a. Direct material + indirect material +
direct expenses
b. Indirect material + Indirect labor +
others indirect cost
c. Direct material + indirect expenses +
indirect labor
d. Direct labor + indirect labor + indirect
expenses
151. 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.
152. 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
c. Last to be allocated to the ending
inventory
d. First to be allocated to the cost of
goods sold
153. A firm Uses its own capital or Uses
its owner's time and/or financial resources both are examples of
a. Implicit Cost
b. Explicit Cost
d. Relevant Cost
154. 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
55. Wage, Rent & Materials are examples of :
a. Implicit Cost
b. Explicit Cost
c. Direct Cost
foregoes the opportunity to invest further in his hotel. The profit which the investor will be getting from the hotel is
.
goods sold
c. Sunk Cost
d. Manufacturing Cost
156. An investor invests in stock exchange he
a. Opportunity cost
b. Period Cost
c. Product Cost
d. Historical Cost
157. 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
158. Generally, the danger level of stock is
fixed the minimum level
a. Below
b. Above
c. Equal
d. Danger level has no relation to
minimum level
159. Which of the following is / are time
based incentive wage plan?
a. Hasley Premium Plan
b. Hasley Weir Premium Plan
c. Rowan Premium Plan
d. All of the given options
160. Which of the following is/are reported in
production cost report?
a. The costs charged to the department
b. How the costs were assigned to the
output?
c. The equivalent units of production by
the department
d. All of the given options
161. Beginning goods in process were `
15,000. The cost of goods manufactured is ` 245,000. What is the cost assigned to the ending goods in process?
a. ` 45,000
b. ` 15,000
c. ` 30,000
d. There will be no ending Inventory
162. Sales are ` 450,000. Beginning finished
goods were ` 23,000. Ending finished goods are ` 30,000. The cost of goods sold is ` 300,000. What is the cost of goods manufactured?
a. ` 323,000
b. ` 330,000
c. ` 293,000
d. None of the given options
163. Under Periodic Inventory system
Purchase of inventory is treated as:
a. Assets
b. Expense
c. Income
d. Liability
164. When prices are rising over time, which
of the following inventory costing methods will result in the lowest gross margin/profits?
a. FIFO
b. LIFO
c. Weighted Average
d. Cannot be determined
165. The main difference between the profit
center and investment center is:
b. Revenue generation
c. Cost incurrence
d. Investment
166. 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
167. Over applied FOH will always result
when a predetermined FOH rate is applied and:
a. Production is greater than defined
capacity
a. Decision making
b. Actual overhead costs are less than
budgeted overhead
c. Budgeted capacity is less than normal
capacity
d. Actual overhead incurred is less than
applied Overhead
168. 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
169. 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
170. 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
171. is the time worked over and
above the employee's basic working week.
a. Flex time
b. Overtime
c. Shift allowance
d. Commission
172. In furniture manufacturing use of nail, pins, glue, and polish which use to increase its esteem value that cost is treated as:
a. Direct material cost
b. Indirect material cost
c. FOH cost
d. Prime cost
173. 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
174. Which of the following is a mechanical
device to record the exact time of the workers?
a. Clock Card
c. Token System
d. Attendance Register
174. Which of the following is a
mechanical device to record the exact time of the workers?
a. Clock Card
b. Store Card
c. Token System
d. Attendance Register
element / s of production payroll?
a. Direct labor force wages
b. Administrative wages
c. Selling wages
d. All of the given options
176. If a predetermined FOH rate is not
b. Store Card
175. Which of the following is / are
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
177. Which of the following is NOT an
assumption of the basic economic- order quantity model?
a. Annual demand is known
b. Ordering cost is known
c. Carrying cost is known
d. Quantity discounts are available
178. In order to ensure efficient
functioning of the stores department and steady flow of materials to the production departments, the restocking of stores is duty of:
a. Managers
b. Storekeeper
c. Production In charge
d. Sales supervisor
179. In cost Accounting, abnormal loss is
charged to:
a. Factory overhead control account
b. Work in process account
c. Income Statement
d. Entire production
180. A high inventory turnover may
indicate:
a. An efficient use of the investment in
inventory
b. A high risk of stock-outs
c. Stock position of store room
d. All of the given options
181. Which of the following cost is used
in the calculation of cost per unit?
a. Total production cost
b. Cost of goods available for sales
c. Cost of goods manufactured
d. Cost of goods Sold
182. If, COGS = ` 50,000 GP Margin =
25% of sales what will be the value of Sales? a. 200,000
b 66,667
c. 62,500
d. None of the given options
183. 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
184. All of the following are cases of
labor turnover EXCEPT:
a. Workers appointed against the
vacancy caused due to discharge or quitting of the organization
b. Workers employed under the
expansion schemes of the company
c. The total change in the composition of
labor force
d. Workers retrenched
185. The Term Minimum Level
Represents.
a. The quantity below which the stock of any item should not be allowed to fall
b. The quantity below which the stock of
any item should be allowed to fall
c. The estimated time period in number
of days or in weeks or in months.
d. The Lead time period in number of
days or in weeks or in months.
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.
186. Which of the following would be
187. The Economic order quantity can
be calculated by
a. Formula Method
b. Table Method
c. Graph Method
d. All of the given
188. A chemical process has normal
wastage of 10% of input. In a period, 2,500 Kg of material were input and there was abnormal loss of 75 Kg. What quantity of good production was achieved? a. 2,175 kg
b. 2,250 kg
c. 2,425 kg
d. 2,500 kg 189. Which of the following is likely to be classified as a direct material cost of a motor car wheel?
a. The metal used to manufacture it.
b. The metal used to manufacture one of the tools used in the car wheel factory.
c. The cost of operating the raw material stores in the factory.
d. The cost of the quality operation on the finished car wheels.
190. 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.
191. 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.
192. While preparing the Cost of Goods Sold and Income Statement, the over applied FOH is;
a. Add back, subtracted
b. Subtracted, add back
c. Add back, add back
d. Subtracted, subtracted
193. 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
194.The following is the Income Statement of a Company for last month: Particulars `
Sales 4,000,000
Less: variable expenses 1,800,000
Contribution margin 2,200,000 Less: fixed expenses 720,000 Net income 1480,000
The company has no beginning or ending inventories. A total of 80,000 units were produced and sold last month.
195.What is the company's contribution margin ratio?
a. 30%
b. 50%
c. 150%
d. None of given options
196.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
197.How many units would the company have to sell to attain target profits of ` 600,000?
a. 48,000 units
b. 88,000 units
c. 106,668 units
d. None of given options
198.What is the company's margin of safety in `?
A 1,600,000
b 2,400,000
c 25,60,000
d. None of the given options
199.The margin of safety can be defined as:
a. The excess of budgeted or actual sales over budgeted or actual variable expenses
b. The excess of budgeted or actual sales over budgeted or actual fixed expenses
c. The excess of budgeted sales over the break-even volume of sales
200. To start a partnership business, what should be the minimum number of partners?
A) 2
B) 10
C) 4
D) 20
Answer: A
201. What type of agreement is used to form a partnership business?
A) Written agreement
B) Oral agreement
C) Written or oral agreement
D) None of them
Answer: C
202. In partnership, partners liabilities are
A) Unlimited
B) Limited to the capital of the business
C) Limited
D) Both A and C
Answer: A
203. Is a partnership firm examined as an individual a legal entity?
A) No
B) Yes
C) Partially Yes
Answer: A
205. What is interest on drawings?
A) Credited to partner’s current a/c
B) Not shown in current account
C) Debited to partner’s current a/c
D) None of the above
Answer: C
206. What is the partnership written agreement known as?:
A) Partnership contract
B) Agreement
C) Partnership deed
D) Partnership Act
Answer: C
207. No partnership agreement, what will be the percentage of profit sharing ratio between them?
A) Unequal
B) Equal
C) It will depend on the experience of a partner
D) It will depend on a partner’s capital
Answer: B
208 . Which is not a feature of a partnership business?
A) Ease of formation
B) Limited liability
C) Limited life
D) Mutual agency
Answer: B
209. Which kind of partnership one partner has unlimited liability and other partner have limited liability?
A) Partnership-at-will
B) Limited partnership
C) General partnership
D) Particular partnership
Answer: B
210 . Which types of partnership have no agreement in terms of the duration of partnership?
A) Partnership-at-will
B) Limited partnership
C) General partnership
D) Particular partnership
Answer: A
211. ........................provides information for income determination.
(A) Financial accounting
(B) cost accounting
(C) management accounting
(D) none of these
Answ er - (A)
212. ...................helps in ascertaining costs beforehand.
(A) Financial accounting
(B) cost accounting
(C) management accounting
(D) none of these
Answ er - (B)
213. The scope of cost accounting include..............,............... and...............
(A) Cost ascertainment, cost presentation, cost control
(B) tax planning, tax accounting, financial accounting
(C) presentation of accounting information, creation of policy, day-to day operation
(D) none of the above
Answ er - (A)
214. Cost accounting disclose ................
(A) The Financial position
(B) profit/loss of a product, job or service
(C) effect and impact of cost on business
(D) none of these
215. ...........is a post mortem of past costs.
(A) Financial accounting
(B) cost accounting
(C) both a & b
(D) none of these
Answ er - (A)
216. ......................aids in price fixation.
(A) Financial accounting
(B) cost accounting
(C) management accounting
(D) none of these
Answ er - (B)
217. ..................is the oldest branch of accounting.
(A) Financial accounting
(B) cost accounting
(C) management accounting
(D) none of these
Answ er - (A)
218. .................includes financial and cost accounting, tax planning and tax accounting.
(A) Financial accounting
(B) cost accounting
(C) management accounting
(D) none of these
Answ er - (C)
219. In automobile, .....................costing is used
(A) Process
(B) batch
(C) job
(D) multiple
Answ er - (D)
220. Service costing is used in industries producing..................
(A) Products
(B) service
(C) both a & b
(D) none of these
Answ er - (B)
221. Standard costs is.....................
(A) Predetermined cost
(B) budgeted cost
(C) Actual cost
(D) none of these
Answ er - (A)
222. ........................are costs which have been applied against revenue of particular accounting period.
(A) Expenses
(B) income
(C) loss
(D) none of these
Answ er - (A)
223. ...................is the smallest segment of activity or area or responsibility for which costs are accumulated.
(A) Cost Object
(B) Cost centre
(C) cost driver
(D) none of the above
Answ er - (B)
224. The primary emphasis of....................cost is on the planning function of management.
(A) Budgeted
(B) standard
(C) period
(D) none of these
Answ er - (A)
225. ..............cost is irrecoverable cost.
(A) marginal
(B) out of pocket
(C) Sunk
(D) none of these
Answ er - (C)
226.. ...................is the value of a benefit where no actual cost is incurred.
(A) Imputed
(B) sunk
(C) out of pocket
(D) none of these
Answ er - (A)
227. ...............is the cost which involves payment to outsiders.
(A) Out of pocket cost
(B) Imputed cost
(C) notional cost
(D) none of these
Answ er - (A)
228. ..................... is the maximum possible alternative earning that might have been earned if the productive capacity is put to some alternative use.
(A) Opportunity
(B) incremental revenue
(C) alternative revenue
(D) none of these
Answ er - (A)
229. An item of cost that is direct for one business may be ..............for another business.
(A) Important
(B) direct
(C) Indirect
(D) none of the above.
Answ er - (C)
230. The total of all direct expenses is known as ..............cost.
(A) Prime
(B) Works
(C) Production
(D) both a & b
Answ er - (A)
50. 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
51. Which of the following is/are the basic object/s of job analysis?
a. Determination of wage rates
b. Ascertain the relative worth of each
job
c. Breaking up job into its basic elements
d. All of the given options
52. Analysis of selling and distribution
overheads is done by:
a. Nature of expenses and functions
b. Areas, products and salesmen
c. Types of customers and channels of
distribution
d. All of the above
53. 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
54. Depreciation is a:
a. Measure of consumption of assets
b. Process of allocation and not of
valuation
c. Wear and tear due to use and/or lapse
of time
d. All of the above
55. Which of the following does not
influence the useful life of an asset?
a. Expected physical wear and tear
b. Cost of the asset
c. Obsolescence
d. Legal or other limits on the use of the
asset
56. For computing depreciation of an
asset, the factors that are taken into consideration include the following except:
a. Historical cost
b. Expected useful life
c. Insurance premium
d. Estimated residual value
57. 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
58. Which of the following methods of
depreciation results in fixed per unit cost of depreciation?
a. Straight line
b. Reducing balance
c. Sinking fund
d. Production unit
59. Types of maintenance include the
following except:
a. Routine
b. Overhaul
c. Emergency
d. Periodic
60. Which of the following is not included in the objectives of maintenance of plant and machinery?
a. Reducing idle time
b. Reducing breakdown
c. Maintaining efficiency
d. Increasing life
61. Regular maintenance expenses are :
a. Capitalized
b. Part of manufacturing overheads
c. Written-off to costing profit and loss
account
d. Part of prime cost
62. Obsolescence is the measure of the loss of value of an asset due to :
a. Technological innovation
b. Changes in market conditions
c. Both (a) and (b) above
d. None of the above
63. Which of the following is not a
production cause of idle capacity?
a. Set-up and change-over time
b. Lack of supervision and instruction
c. Lack of materials and tools
d. Strike
64. 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
65. 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
66. Which of the following is not used as
a base for apportionment of administration overheads?
a. Direct wages
b. Works cost
c. Conversion cost
d. Sales value
67. In account ting for labourcost:
labour cost are charged to prime cost
b. Direct labour cost and indirect labour
cost are charged to overheads
c. Direct labour cost is charged to prime
cost and indirect labour cost is charged to overheads
a. A. direct labour cost and indirect
d. All of the above
68. Productive causes of idle time include
the following except :
a. Power failure
b. Fall in demand
c. Machine breakdown
d. Waiting for materials, tools,
instructions, etc.
69. The treatment of idle time in cost
includes the following:
a. Cost of normal and controllable idle
time is charged to factory overheads
b. Cost of normal but uncontrollable idle
time is treated as prime cost
c. Cost of abnormal and uncontrollable
idle time is charged to costing profit and loss account
d. All of the above
70. Overtime premium may be treated,
depending on the circumstances, as:
a. Part of direct wages
b. Part of production overheads
c. Part of capital order
d. All of the above
71. 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
72. Fringe benefits are those for which
efforts of the workers are not necessary and may include the following except:
a. Holiday pay
b. Attendance bonus
c. Production bonus
d. Employer‘s contribution to P.F.
73. Avoidable causes of labour turnover
include the following except:
a. Redundancy
b. Low wages
c. Bad working conditions
d. Marriage
74. The unavoidable causes of labour turnover include the following except:
a. Personal betterment
b. Dissatisfaction with the job
c. Illness
d. Retirement
75. Labour turnover can be measured by
the following methods except:
a. Attrition method
b. Separation method
c. Replacement method
d. Flux method
76. At the start of the quarter there were
14,630 workers. 750 employees left during the quarter while 600 joined the organization during the same period. Using the flux method, the labour turnover was:
a. 5.13%
b. 9.23%
c. 9.32%
d. 9.28%
77. Which of the following is not a cost
implication of labourturnover?
a. Training
b. Recruiting
c. Ageing labour force
d. Damage of machine
78. Preventive costs of labour turnover
include the following except:
a. Cost of recruitment and training
b. Medical services
c. Welfare
d. Gratuity and pension
79. Replacement costs of labour turnover
include the following except :
a. Loss of output
b. Cost of personnel administration
c. Cost of tool and machine breakage
d. Cost of scrap and defective work
80. Cost of labour turnover may be
treated as :
a. Direct wages
b. Prime cost
c. Overhead
d. None of the above
81. 1) labour cost control leads to
minimization of cost of labour per unit of output. (2) When labour cost is fixed nature, any reduction in total labour cost may not result in lower cost per unit. True or false?
(a. (1) True; (2) False
b. (1) False; (2) True
c. (1) and (2) False
82. Labour cost control embraces the
following activities except:
a. Recruitment and promotion
b. Formulation of wage policy and
payment and accounting for wages
c. Allocation of cost
d. Preparation of financial statement
83. (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
84. Which of the following techniques is
not meant for labour cost control?
a. Budgetary control
b. Standard costing
c. ABC analysis
d. Ratio analysis
85. Ratios which may be used for
comparing labour cost over time include the following except :
a. Gross profit ratio
b. Efficiency ratio
c. Illness ratio
d. Absenteeism ratio
86. Cost of production is equal to
a. Prime costs+ other manufacturing
costs.
b. Production costs + Administration
expenses.
c. Prime costs + Manufacturing costs +
Opening W.I.P – Closing W.I.P.
d. None of the above.
87. The cost of goods sold is equal to
a. Total Purchases - Total Sales.
b. Opening stock + Total Purchase.
c. Opening stock - Total Purchases
+Closing Stock+ Direct Costs.
d. Opening stock + Total Purchases –
Closing Stock + Direct Costs.
88. Which of the following is false
regarding the LIFO method of inventory valuation?
a. The material issue will be priced at the price of the material that is purchased last.
b. The pattern of cash flow does not
necessarily coincide with the actual flow pattern of materials.
d. LIFO determines closing inventory at
recent costs.
89. Which of the following is NOT a
operations
purchase-order size
c. To make the system less productive
d. To meet variation in product dem
c. It permits management to influence net income by timing the purchases.
reason for carrying inventory?
a. To maintain independence of
b. To take advantage of economic
90. Which of the following is TRUE regarding Departmental Rates.
a. A departmental absorption rate is a rate of absorption based upon the particular department's overhead cost and activity level
b. A departmental absorption rate is a rate
of absorption not based upon the particular department's overhead cost and activity level
c. A single rate of absorption used
throughout an organization‘s production facility and based upon its total production costs and activity
d. None of the given options
91. Inventory of ` 96,000 was purchased during the year. The cost of goods sold was ` 90,000 and the ending inventory was ` 18,000. What was the inventory turnover ratio for the year?
a. 5.0 times
b. 5.3 times
c. 6.0 times
d. 6.4 times
92. 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.
93. The factors to be taken into
consideration in formulating incentive schemes include:
a. Quantity and quality of output
b. Incidence of overhead, and effect
upon workers
c. Simplicity and legal provisions
d. All of the above
94. Contribution margin contributes to meet which one of the following options ?
a. Variable cost
b. Fixed cost
c. Operating cost
d. Net profit
95. 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
96. If time allowed for a job is 10 hours, time taken for the job is 8 hours and rate of pay is ` 2 per hour, the bonus to the worker is :
a. ` 1.20
b. ` 2.00
c. ` 3.20
d. None of the above
97. 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
98. In a profit sharing scheme the
available surplus is shared by the following except:
a. Government
b. Shareholders
c. Employees
d. Firm
99. Non-monetary incentives may include
the following except:
a. Health and safety
b. Housing facilities
c. Education and training
d. Dearness allowance
100. 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
101. The authorized heads of
deduction from wages payable include the following except :
a. Car allowance
b. Income tax
c. Provident fund
d. Employees‘state insurance
102. Wages analysis include :
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
103. 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.
104. Which of the following inventory valuation methods shows higher profits during the period of rising prices?
a. FIFO method.
b. LIFO method.
c. Weighted average method.
d. Simple average method.
105. Which of the following systems of inventory valuation computes cost of goods sold as a residual amount?
a. Weighted Average.
b. Last-in-First-out.
c. Periodic Inventory System.
d. Specific Identification.
106. 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
121. Overhead expenses can be classified
according to:
a. Functions
b. Elements
c. Behavior
d. All of the above
122. Which of the following is not
included in functional classification of overheads?
a. Repairs and maintenance
b. Lubricating oil
c. Consumable stores
d. Chargeable expenses
123. Which of the following is not an
example of marketing overheads?
a. Salary of the foreman
c. Salaries of sales staff
d. Secondary packing charges
124. Some overhead charges tend to vary
almost directly, some tend to remain constant while some again vary in part with the volume and in part remain constant. This statement describes sequentially the following:
a. Variable, fixed and semi-variable
overheads
b. Fixed, semi-variable and variable
overheads
c. Semi-variable, variable and fixed
overheads
d. Variable, semi-variable and fixed
125. Suppose a firm sells its product at a
price lower than the opportunity cost of the inputs used to produce it. Which is true?
a. The firm will earn accounting and
economic losses.
b. Publicity expenses
overheads
economic profits.
b. The firm will face accounting and
c. The firm will face an accounting loss,
but earn economic profits.
d. The firm may earn accounting profits,
but will face economic losses.
126. Example of semi-variable items
include the following except:
a. Telephone
b. Repairs and maintenance
c. Depreciation of plant and machinery
d. Insurance of plant and building
127. Direct Labor is an element of:
a. Prime cost
b. Conversion cost
c. Total production cost
d. All of the given options
128. Which of the following is not a
production department?
a. Power department
b. Machining department
c. Refining department
d. Finishing department
129. Which of the following does not
match?
Item of cost Basis of cost allocation
a. Power H.P. of machine
b. Supervision of building value of
materials consumed
c. Insurance of building area occupied
d. Time-keeping number of employees
130. (1) Departmentalization of items of
costs is known as primary distribution.
(2) Redistribution of service departments, costs is known as secondary distribution. True or false?
a. (1) and (2) true
b. (1) and (2) false
c. (1) False; (2) True
d. (1) True; (2) False
131. Which of the following costs is not a
factory overhead expense?
a. Depreciation of equipment used in the
research department
b. Salary of quality control inspector
c. Overtime premium paid to direct
labour
d. Machine maintenance labour cost
132. 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
133. A method of dealing with overheads
involves spreading common costs over cost centres on the basis of benefit received. This is known as
a. Overhead absorption
b. Overhead apportionment
c. Overhead identification
d. Overhead analysis
134. The process of cost apportionment
is carried out so that :
a. Costs may be controlled
b. Cost units gather overheads as they
pass through cost centres
c. Whole items of cost can be charged to
cost centres
d. Common costs are shared among cost
centres
135. 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
136. 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
137. 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
138. Idle capacity of a plant is defined as
the difference between:
a. Practical capacity and normal capacity
b. Practical capacity and capacity based
on sale expectancy
c. Maximum capacity and actual capacity
d. Maximum capacity and practical
capacity
139. 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
140. Maximum capacity of a plant refers
to its:
a. Theoretical capacity
b. Normal capacity
c. Practical capacity
d. Capacity based on sales expectancy
141. 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
142. What will be the impact of normal
loss on the overall per unit cost?
a. Per unit cost will increase
b. Per unit cost will decrease
c. Per unit cost remain unchanged
d. Normal loss has no relation to unit
cost
143. 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
144. 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
145. Which of the following is/are not
associated with ordering costs?
a. Interest
b. Insurance
c. Opportunity costs
d. All of the given options
146. Under perpetual Inventory system at
the end of the year:
a. No closing entry passed
b. Closing entry passed
c. Closing value find through closing
entry only
d. None of the above.
147. The Hino Corporation has a
breakeven point when sales are ` 160,000 and variable costs at that level of sales are ` 100,000. How much would contribution margin increase or decrease, if variable expenses dropped by ` 20,000?
a. 37.5%.
b. 60%.
c. 12.5%.
d. 26%
148. The short run is a time period in
which:
a. All resources are fixed.
b. The level of output is fixed.
c. The size of the production plant is
variable.
d. Some resources are fixed and others
are variable
149. Opportunity cost is the best example
of:
a. Sunk Cost
b. Standard Cost
c. Relevant Cost
d. Irrelevant Cost
150. The components of factory
overhead are as follows:
a. Direct material + indirect material +
direct expenses
b. Indirect material + Indirect labor +
others indirect cost
c. Direct material + indirect expenses +
indirect labor
d. Direct labor + indirect labor + indirect
expenses
151. 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.
152. 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
c. Last to be allocated to the ending
inventory
d. First to be allocated to the cost of
goods sold
153. A firm Uses its own capital or Uses
its owner's time and/or financial resources both are examples of
a. Implicit Cost
b. Explicit Cost
d. Relevant Cost
154. 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
55. Wage, Rent & Materials are examples of :
a. Implicit Cost
b. Explicit Cost
c. Direct Cost
foregoes the opportunity to invest further in his hotel. The profit which the investor will be getting from the hotel is
.
goods sold
c. Sunk Cost
d. Manufacturing Cost
156. An investor invests in stock exchange he
a. Opportunity cost
b. Period Cost
c. Product Cost
d. Historical Cost
157. 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
158. Generally, the danger level of stock is
fixed the minimum level
a. Below
b. Above
c. Equal
d. Danger level has no relation to
minimum level
159. Which of the following is / are time
based incentive wage plan?
a. Hasley Premium Plan
b. Hasley Weir Premium Plan
c. Rowan Premium Plan
d. All of the given options
160. Which of the following is/are reported in
production cost report?
a. The costs charged to the department
b. How the costs were assigned to the
output?
c. The equivalent units of production by
the department
d. All of the given options
161. Beginning goods in process were `
15,000. The cost of goods manufactured is ` 245,000. What is the cost assigned to the ending goods in process?
a. ` 45,000
b. ` 15,000
c. ` 30,000
d. There will be no ending Inventory
162. Sales are ` 450,000. Beginning finished
goods were ` 23,000. Ending finished goods are ` 30,000. The cost of goods sold is ` 300,000. What is the cost of goods manufactured?
a. ` 323,000
b. ` 330,000
c. ` 293,000
d. None of the given options
163. Under Periodic Inventory system
Purchase of inventory is treated as:
a. Assets
b. Expense
c. Income
d. Liability
164. When prices are rising over time, which
of the following inventory costing methods will result in the lowest gross margin/profits?
a. FIFO
b. LIFO
c. Weighted Average
d. Cannot be determined
165. The main difference between the profit
center and investment center is:
b. Revenue generation
c. Cost incurrence
d. Investment
166. 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
167. Over applied FOH will always result
when a predetermined FOH rate is applied and:
a. Production is greater than defined
capacity
a. Decision making
b. Actual overhead costs are less than
budgeted overhead
c. Budgeted capacity is less than normal
capacity
d. Actual overhead incurred is less than
applied Overhead
168. 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
169. 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
170. 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
171. is the time worked over and
above the employee's basic working week.
a. Flex time
b. Overtime
c. Shift allowance
d. Commission
172. In furniture manufacturing use of nail, pins, glue, and polish which use to increase its esteem value that cost is treated as:
a. Direct material cost
b. Indirect material cost
c. FOH cost
d. Prime cost
173. 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
174. Which of the following is a mechanical
device to record the exact time of the workers?
a. Clock Card
c. Token System
d. Attendance Register
174. Which of the following is a
mechanical device to record the exact time of the workers?
a. Clock Card
b. Store Card
c. Token System
d. Attendance Register
element / s of production payroll?
a. Direct labor force wages
b. Administrative wages
c. Selling wages
d. All of the given options
176. If a predetermined FOH rate is not
b. Store Card
175. Which of the following is / are
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
177. Which of the following is NOT an
assumption of the basic economic- order quantity model?
a. Annual demand is known
b. Ordering cost is known
c. Carrying cost is known
d. Quantity discounts are available
178. In order to ensure efficient
functioning of the stores department and steady flow of materials to the production departments, the restocking of stores is duty of:
a. Managers
b. Storekeeper
c. Production In charge
d. Sales supervisor
179. In cost Accounting, abnormal loss is
charged to:
a. Factory overhead control account
b. Work in process account
c. Income Statement
d. Entire production
180. A high inventory turnover may
indicate:
a. An efficient use of the investment in
inventory
b. A high risk of stock-outs
c. Stock position of store room
d. All of the given options
181. Which of the following cost is used
in the calculation of cost per unit?
a. Total production cost
b. Cost of goods available for sales
c. Cost of goods manufactured
d. Cost of goods Sold
182. If, COGS = ` 50,000 GP Margin =
25% of sales what will be the value of Sales? a. 200,000
b 66,667
c. 62,500
d. None of the given options
183. 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
184. All of the following are cases of
labor turnover EXCEPT:
a. Workers appointed against the
vacancy caused due to discharge or quitting of the organization
b. Workers employed under the
expansion schemes of the company
c. The total change in the composition of
labor force
d. Workers retrenched
185. The Term Minimum Level
Represents.
a. The quantity below which the stock of any item should not be allowed to fall
b. The quantity below which the stock of
any item should be allowed to fall
c. The estimated time period in number
of days or in weeks or in months.
d. The Lead time period in number of
days or in weeks or in months.
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.
186. Which of the following would be
187. The Economic order quantity can
be calculated by
a. Formula Method
b. Table Method
c. Graph Method
d. All of the given
188. A chemical process has normal
wastage of 10% of input. In a period, 2,500 Kg of material were input and there was abnormal loss of 75 Kg. What quantity of good production was achieved? a. 2,175 kg
b. 2,250 kg
c. 2,425 kg
d. 2,500 kg 189. Which of the following is likely to be classified as a direct material cost of a motor car wheel?
a. The metal used to manufacture it.
b. The metal used to manufacture one of the tools used in the car wheel factory.
c. The cost of operating the raw material stores in the factory.
d. The cost of the quality operation on the finished car wheels.
190. 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.
191. 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.
192. While preparing the Cost of Goods Sold and Income Statement, the over applied FOH is;
a. Add back, subtracted
b. Subtracted, add back
c. Add back, add back
d. Subtracted, subtracted
193. 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
194.The following is the Income Statement of a Company for last month: Particulars `
Sales 4,000,000
Less: variable expenses 1,800,000
Contribution margin 2,200,000 Less: fixed expenses 720,000 Net income 1480,000
The company has no beginning or ending inventories. A total of 80,000 units were produced and sold last month.
195.What is the company's contribution margin ratio?
a. 30%
b. 50%
c. 150%
d. None of given options
196.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
197.How many units would the company have to sell to attain target profits of ` 600,000?
a. 48,000 units
b. 88,000 units
c. 106,668 units
d. None of given options
198.What is the company's margin of safety in `?
A 1,600,000
b 2,400,000
c 25,60,000
d. None of the given options
199.The margin of safety can be defined as:
a. The excess of budgeted or actual sales over budgeted or actual variable expenses
b. The excess of budgeted or actual sales over budgeted or actual fixed expenses
c. The excess of budgeted sales over the break-even volume of sales
200. To start a partnership business, what should be the minimum number of partners?
A) 2
B) 10
C) 4
D) 20
Answer: A
201. What type of agreement is used to form a partnership business?
A) Written agreement
B) Oral agreement
C) Written or oral agreement
D) None of them
Answer: C
202. In partnership, partners liabilities are
A) Unlimited
B) Limited to the capital of the business
C) Limited
D) Both A and C
Answer: A
203. Is a partnership firm examined as an individual a legal entity?
A) No
B) Yes
C) Partially Yes
Answer: A
205. What is interest on drawings?
A) Credited to partner’s current a/c
B) Not shown in current account
C) Debited to partner’s current a/c
D) None of the above
Answer: C
206. What is the partnership written agreement known as?:
A) Partnership contract
B) Agreement
C) Partnership deed
D) Partnership Act
Answer: C
207. No partnership agreement, what will be the percentage of profit sharing ratio between them?
A) Unequal
B) Equal
C) It will depend on the experience of a partner
D) It will depend on a partner’s capital
Answer: B
208 . Which is not a feature of a partnership business?
A) Ease of formation
B) Limited liability
C) Limited life
D) Mutual agency
Answer: B
209. Which kind of partnership one partner has unlimited liability and other partner have limited liability?
A) Partnership-at-will
B) Limited partnership
C) General partnership
D) Particular partnership
Answer: B
210 . Which types of partnership have no agreement in terms of the duration of partnership?
A) Partnership-at-will
B) Limited partnership
C) General partnership
D) Particular partnership
Answer: A
211. ........................provides information for income determination.
(A) Financial accounting
(B) cost accounting
(C) management accounting
(D) none of these
Answ er - (A)
212. ...................helps in ascertaining costs beforehand.
(A) Financial accounting
(B) cost accounting
(C) management accounting
(D) none of these
Answ er - (B)
213. The scope of cost accounting include..............,............... and...............
(A) Cost ascertainment, cost presentation, cost control
(B) tax planning, tax accounting, financial accounting
(C) presentation of accounting information, creation of policy, day-to day operation
(D) none of the above
Answ er - (A)
214. Cost accounting disclose ................
(A) The Financial position
(B) profit/loss of a product, job or service
(C) effect and impact of cost on business
(D) none of these
215. ...........is a post mortem of past costs.
(A) Financial accounting
(B) cost accounting
(C) both a & b
(D) none of these
Answ er - (A)
216. ......................aids in price fixation.
(A) Financial accounting
(B) cost accounting
(C) management accounting
(D) none of these
Answ er - (B)
217. ..................is the oldest branch of accounting.
(A) Financial accounting
(B) cost accounting
(C) management accounting
(D) none of these
Answ er - (A)
218. .................includes financial and cost accounting, tax planning and tax accounting.
(A) Financial accounting
(B) cost accounting
(C) management accounting
(D) none of these
Answ er - (C)
219. In automobile, .....................costing is used
(A) Process
(B) batch
(C) job
(D) multiple
Answ er - (D)
220. Service costing is used in industries producing..................
(A) Products
(B) service
(C) both a & b
(D) none of these
Answ er - (B)
221. Standard costs is.....................
(A) Predetermined cost
(B) budgeted cost
(C) Actual cost
(D) none of these
Answ er - (A)
222. ........................are costs which have been applied against revenue of particular accounting period.
(A) Expenses
(B) income
(C) loss
(D) none of these
Answ er - (A)
223. ...................is the smallest segment of activity or area or responsibility for which costs are accumulated.
(A) Cost Object
(B) Cost centre
(C) cost driver
(D) none of the above
Answ er - (B)
224. The primary emphasis of....................cost is on the planning function of management.
(A) Budgeted
(B) standard
(C) period
(D) none of these
Answ er - (A)
225. ..............cost is irrecoverable cost.
(A) marginal
(B) out of pocket
(C) Sunk
(D) none of these
Answ er - (C)
226.. ...................is the value of a benefit where no actual cost is incurred.
(A) Imputed
(B) sunk
(C) out of pocket
(D) none of these
Answ er - (A)
227. ...............is the cost which involves payment to outsiders.
(A) Out of pocket cost
(B) Imputed cost
(C) notional cost
(D) none of these
Answ er - (A)
228. ..................... is the maximum possible alternative earning that might have been earned if the productive capacity is put to some alternative use.
(A) Opportunity
(B) incremental revenue
(C) alternative revenue
(D) none of these
Answ er - (A)
229. An item of cost that is direct for one business may be ..............for another business.
(A) Important
(B) direct
(C) Indirect
(D) none of the above.
Answ er - (C)
230. The total of all direct expenses is known as ..............cost.
(A) Prime
(B) Works
(C) Production
(D) both a & b
Answer - (A)