MBA/MBA Cost and Managerial Accounting Mcq Set 1 Sample Test,Sample questions

Question:
 Cost of abnormal wastage is:

1.Charged to the product cost

2.Charged to the profit & loss account

3.charged partly to the product and partly profit & loss account

4.not charged at all.


Question:
 When prices are rising over time, which of the following inventory costing methods will result in the lowest gross margin/profits?

1.FIFO

2.LIFO

3.Weighted Average

4.Cannot be determined


Question:
A Local Authority is preparing cash Budget for its refuse disposal department. Which of the following items would not be included in the cash budget?

1.Capital cost of a new collection vehicle

2.Depreciation of the machinery

3.Operatives wages

4.Fuel for the collection Vehicles


Question:
A process costing system for J Co used an input of 3,500Kg of materials at Rs20 per Kg and labour hours of 2,750 at Rs25 per hour. Normal loss is 20% and losses can be sold at a scrap value of Rs5per Kg. Output was 2,950 Kg. What is the value of the output?

1.Rs 142,485

2.Rs 146,183

3.Rs 149,746

4.Rs 152,986


Question:
A profit centre is a centre

1.Where the manager has the responsibility of generating and maximising profits

2.Which is concerned with earning an adequate Return on Investment

3.Both of the above

4.Which manages cost


Question:
A typical factory overhead cost is _____

1.Audit

2.Compensation of plant manager

3.Design distribution

4.Internal


Question:
A worker is allowed 60 hours to complete the job on a guaranteed wage of Rs. 10 per hour. Under the Rowan Plan, he gets an hourly wage of Rs. 12 per hour. For the same saving in time, how much he will get under the Halsey Plan?

1.Rs. 720

2.Rs. 540

3.Rs. 600

4.Rs. 900


Question:
An organization sold units 4000 and have closing finished goods 3500 units and opening finished goods units were 1000.The quantity of unit produced would be ______

1.7500 units

2.6500 units

3.4500 units

4.5500 units


Question:
Annual requirement is 7800 units; consumption per week is 150 units. Unit price Rs 5, order cost Rs 10 per order. Carrying cost Rs 1 per unit and lead time is 3 week, The Economic order quantity would be _____

1.365 units

2.300 units

3.250 units

4.150 units


Question:
Cost accounting concepts include all of the following EXCEPT ________

1.Planning

2.Controlling

3.Sharing

4.Delegating.


Question:
Cost of production report is a _____

1.Financial statement

2.Production Process report

3.Order Sheet

4.None of Above


Question:
Costs associated with the labour turnover can be categorised into:

1.Preventive Costs only

2.Replacement costs only

3.Both of the above

4.Machine costs


Question:
Describe the cost unit applicable to the Bicycle industry:

1.per part of bicycle

2.per bicycle

3.per tonne

4.per day


Question:
Direct materials cost is Rs. 80,000. Direct labor cost is Rs. 60,000. Factory overhead is Rs. 90,000. Beginning goods in process were Rs. 15,000. The cost of goods manufactured is Rs. 245,000. What is the cost assigned to the ending goods in process?

1.Rs. 45,000

2.Rs. 15,000 Rs.

3.30,000

4.There will be no ending Inventory


Question:
Economic order quantity is that quantity at which cost of holding and carrying inventory is:

1.Maximum and equal

2.Minimum and equal

3.It can be maximum or minimum depending upon case to case.

4.Minimum and unequal


Question:
Examples of industries that would use process costing include all of the following EXCEPT

1.Beverages

2.Food

3.Hospitality

4.Petroleum


Question:
Find the value of purchases if Raw material consumed Rs. 90,000; Opening and closing stock of raw material is Rs. 50,000 and 30,000 respectively.

1.Rs. 10,000

2.Rs. 20,000

3.Rs. 70,000

4.Rs. 1,60,000


Question:
Fixed cost per unit decreases when ______

1.Production volume increases.

2.Production volume decreases.

3.Variable cost per unit decreases.

4.Variable cost per unit increases.


Question:
For which one of the following industry would you recommend a Job Order Costing system?

1.Oil Refining

2.Grain dealing

3.Beverage production

4.Law Cases


Question:
For which one of the following industry would you recommend a Process Costing system?

1.Grain dealer

2.Television repair shop

3.Law office

4.Auditor


Question:
How many units would the company have to sell to attain target profits of Rs. 600,000?

1.88,000 units

2.100,000 units

3.106,668 units

4.None of given options


Question:
In the case of plant, the limiting factor may be:

1.Insufficient capacity

2.shortage of experienced salesmen

3.general shortage of power

4.shortage of materials


Question:
Inventory control aims at _______

1.Achieving optimization

2.Ensuring against market fluctuations

3.Acceptable customer service at low capital investment

4.Discounts allowed in bulk purchase


Question:
Jan 1; finished goods inventory of Manuel Company was Rs.3, 00,000. During the year Manuel’s cost of goods sold was Rs. 19, 00,000, sales were Rs. 2, 000,000 with a 20% gross profit. Calculate cost assigned to the December 31; finished goods inventory.

1.Rs. 4,00,000

2.Rs. 6,00,000

3.Rs. 16,00,000

4.None of the given options


Question:
Opening work in process inventory can be calculated as under

1.FIFO and Average costing

2.LIFO and Average costing

3.FIFO and LIFO costing

4.None of given option.


Question:
Opportunity cost is the best example of _____

1.Sunk Cost

2.Standard Cost

3.Relevant Cost

4.Irrelevant Cost


Question:
Percentage of Margin of Safety can be calculated in which one of the following ways?

1.Based on budgeted Sales

2.Using budget profit

3.Using profit & Contribution ratio

4.All of the given options


Question:
Period costs are ______

1.Expensed when the product is sold

2.Included in the cost of goods sold

3.Related to specific Period

4.Not expensed


Question:
Prime cost + Factory overhead cost is ________

1.Conversion cost.

2.Production cost.

3.Total cost.

4.None of given option.


Question:
Production volume of 1,200 units cost incurred Rs. 10,000 and production volume of 1,400 units cost incurred Rs.20, 000. The variable cost per unit would be?

1.Rs. 50.00 per unit (May not be correct)

2.Rs. 8.33 per unit

3.Rs. 14.20 per unit

4.Rs. 100 per unit


Question:
Statutory cost audit are applicable only to:

1.Firm

2.Company

3.Individual

4.Society


Question:
Sunk costs are:

1.relevant for decision making

2.Not relevant for decision making

3.cost to be incurred in future

4.future costs


Question:
The cost expended in the past that cannot be retrieved on product or service ______

1.Relevant Cost

2.Sunk Cost

3.Product Cost

4.Irrelevant Cost


Question:
The difference between total revenues and total variable costs is known as ______

1.Contribution margin

2.Gross margin

3.Operating income

4.Fixed costs


Question:
The following is the Corporation's Income Statement for last month: Particular Rs. Sales 4,000,000 Less: variable expenses 2,800,000 Contribution margin 1,200,000 Liss: fixed expenses 720,000 Net income 480,000. The company has no beginning or ending inventories. A total of 80,000 units were produced and sold last month. What is the company's contribution margin ratio?

1.30%

2.70%

3.150%

4.none of given options


Question:
The main purpose of cost accounting is to ______

1.Maximize profits

2.Help in inventory valuation

3.Provide information to management for decision making

4.Aid in the fixation of selling price


Question:
The Process of cost apportionment is carried out so that _______

1.Cost may be controlled

2.Cost unit gather overheads as they pass through cost centers

3.Whole items of cost can be charged to cost centers

4.Common costs are shared among cost centers


Question:
The summarized balance sheet of Autolight Limited shows the balances of previous and current year of retained earnings Rs. 25,000 and Rs. 35,000. If dividend paid during the current year amounted to Rs. 5,000 then profit earned during the year will be:

1.Rs. 5,000

2.Rs. 55,000

3.Rs. 15,000

4.Rs. 65,000


Question:
The The components of the prime cost are

1.Direct Material + Direct Labor + Other Direct Cost

2.Direct Labor + Other Direct Cost + FOH

3.Direct Labor + FOH

4.None of the given options


Question:
The the main difference between the profit center and investment center is

1.Decision making

2.Revenue generation

3.Cost in occurrence

4.Investment


Question:
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?

1.Machine hours

2.Cost of materials used

3.Direct labor hours

4.Direct labor dollars


Question:
When the sales increase from Rs. 40,000 to Rs. 60,000 and profit increases by Rs. 5,000, the P/V ratio is ______

1.20%

2.30%

3.25%

4.40%.


Question:
Which of the following is a characteristic of process cost accounting system?

1.Material, Labor and Overheads are accumulated by orders

2.Companies use this system if they process custom orders

3.Opening and Closing stock of work in process are related in terms of completed units

4.Only Closing stock of work in process is restated in terms of completed units


Question:
Which of the following manufacturers is most likely to use a job order cost accounting system?

1.A soft drink producer

2.A flour mill

3.A textile mill

4.A builder of offshore oil rigs


Question:
Which of the following represents a CVP equation?

1.Sales = Contribution margin (Rs.) + Fixed expenses + Profits

2.Sales = Contribution margin ratio + Fixed expenses + Profits

3.Sales = Variable expenses + Fixed expenses + profits

4.Sales = Variable expenses - Fixed expenses + profits


Question:
Which of the following statement measures the financial position of the entity on particular time?

1.Income Statement

2.Balance Sheet

3.Cash Flow Statement

4.Statement of Retained Earning


Question:
Which of these is not a Material control technique:

1.ABC Analysis

2.Fixation of raw material levels

3.Maintaining stores ledger

4.Control over slow moving and non moving items


Question:
Which of these is not an objective of Cost Accounting?

1.Ascertainment of Cost

2.Determination of Selling Price

3.Cost Control and Cost reduction

4.Assisting Shareholders in decision making


Question:
Which one out of the following is not an inventory valuation method?

1.FIFO

2.LIFO

3.Weighted Average

4.EOQ


Question:
______ method assumes that the goods received most recently in the stores or produced recently are the first ones to be delivered to the requisitioning department.

1.FIFO

2.Weighted average method

3.Most recent price method

4.LIFO


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