MGT402 Cost Accounting

 Which of the following statement measures the financial position of the entity on particular time?
Select correct option:
Income Statement
Balance Sheet
Cash Flow Statement
Statement of Retained Earning

Generally, the danger level of stock is fixed ________ the minimum level.
Select correct option:
Below
Above
Equal
Danger level has no relation to minimum level


The Process of cost apportionment is carried out so that:
Select correct option:
Cost may be controlled
Cost unit gather overheads as they pass through cost centers
Whole items of cost can be charged to cost centers
Common costs are shared among cost centers

The appropriate journal entry to transfer the cost of completed units from the Work in Process account would involve a credit to Work in Process and a debit to which of the following accounts?
Select correct option:
Income Summary
Raw Materials Inventory
Finished Goods
Manufacturing SummarySelect correct option:
Production Center
Service Center
General Cost Center
Head Office

Which of the following is/are reported in production cost report?
Select correct option:
The costs charged to the department
How the costs were assigned to the output?
The equivalent units of production by the department
All of the given options (not 100% sure)

8 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?
Select correct option:
Rs. 45,000
Rs. 15,000
Rs. 30,000
There will be no ending Inventory

Solution:
Direct Material ---- 80,000 (Given)
Direct labor ------- 60,000 (Given)
FOH --------------   90,000 (Given)
Open WIP-------    15,000
Total                    245000 (cost of goods manufactured is also 245000 so balance is zero)

 

Sales are Rs. 450,000. Beginning finished goods were Rs. 23,000. Ending finished goods are Rs. 30,000. The cost of goods sold is Rs. 300,000. What is the cost of goods manufactured?
Select correct option:
Rs. 323,000
Rs. 330,000
Rs. 293,000
None of the given options


Under Periodic Inventory system Purchase of inventory is treared as:
Select correct option:
Assets
Expense
Income
Liability

When prices are rising over time, which of the following inventory costing methods will result in the lowest gross margin/profits?
Select correct option:
FIFO
LIFO
Weighted Average
Cannot be determined

The main difference between the profit center and investment center is:
Select correct option:
Decision making
Revenue generation
Cost in currence
Investment

Which of the following is a characteristic of process cost accounting system?
Select correct option:
Material, Labor and Overheads are accumulated by orders
Companies use this system if they process custom orders
Opening and Closing stock of work in process are related in terms of completed units
Only Closing stock of work in process is restated in terms of completed units
Reference

The Inventory Turn over ration is 5 times and numbers of days in a year is 365.Inventory holding period in days would be
Select correct option:
100 days
73 days
50 days
10 days


15 Which of the following manufacturers is most likely to use a job order cost accounting system?
Select correct option:
A soft drink producer
A flour mill
A textile mill
A builder of offshore oil rigs

(see page # 131 of handouts (pdf file) under "Examples of industries using process costing include". Bottling, flour, textile industries will use process costing, so the last option "A builder of offshore oil rigs" should be correct as this industry will use job order)