Cost & Management Accounting (mgt402)
Solution to Quiz 02
Special
Semester 2007
(Total
Marls 1 x 15 = 15)
Find
out correct option from given MCQs & put your answer in above table:
1. A manufacturing company manufactures a
product which passes through two
departments. 10,000
units were put in process. 9,400 units were completed &
transferred to
department-II. 400 units (1/2 complete) were in process at the end of
month. Remaining 200
units were lost during processing. Costs incurred by the
department were as
follows:
Particulars Rs.
Direct Materials 19,400
Direct Labor 24,250
Factory overhead 14,550
Equivalent units of
material, for the month in CPR ____________
a. 200 units
b. 9400 units
c. 9600 units
d. None of the given options
MCQ # 2 and 3 are based on the
following data:
Allied
chemical company reported the following production data for its department:
Particulars Units
Received
in from department –1 55,000
Transferred
out department –3 39,500
In
process (1/3 labor & overhead)
10,500
All
materials were put in process in Department No. 1. Costing department collected
following
figures for department No. 2:
Particulars Rs.
Unit
cost received in 1.80
Labor
cost in department No.2 27,520
Applied
overhead in Department No. 2 15,480
2. Equivalent units of Material are _________
a. 3,500 units
b. 39,500 units
c. 43,000 units
d. None of the given options Cost &
Management Accounting (mgt402)
Solution to Quiz 02
Special
Semester 2007
3. Unit cost used for transferred out _________
a. Rs. 0.64
b. Rs. 0.36
c. Rs. 0.18
d. None of the
given options
4. During January, Assembling department
received 60,000 units from preceding department at a unit cost of Rs. 3.54.
Costs added in the assembly department were:
Particulars Rs.
Materials 41,650
Labor 101,700
Factory
overheads 56,500
There
was no work in process beginning inventory.
Particulars Units
Units
from preceding department 60,000
Units
transferred out 50,000
Units
in process at the end of month
(all
materials, 2/3converted)
9,000
Units
lost (1/2 completed as to materials & conversion cost ) 1,000
The
entire loss is considered abnormal & is to be charged to factory overhead.
Cost transferred to next department
__________
a. Rs. 55,703.3 App.
b. Rs. 356,546.6
App.
c. Rs. 412,249.9 App.
d. None of the given options
MCQ # 5, 6, 7 and 8 are based on the following data:
The following is the Corporation's Income Statement for
last month:
Particulars Rs.
Sales 4,000,000
Less: variable expenses
1,800,000
Contribution margin
2,200,000
Less: fixed expenses
720,000
Net income
1480,000Cost & Management Accounting (mgt402) Solution to Quiz 02
Special Semester 2007
The company has no beginning or ending inventories. A
total of 80,000 units were
produced and sold last month.
5. What is the company's contribution margin
ratio?
a. 30%
b. 50%
c. 150%
d. None of given options
6. 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
7. How many units would the company have to sell to attain target profits of Rs.600,000?
a. 48,000 units
b. 88,000 units
c. 106,668 units
d. None of given options
8. What is the company's margin of safety in Rs?
a. Rs. 1,600,000
b. Rs. 2,400,000
c. Rs. 25,60,000
d. None of given options
MCQ # 9 & 10 are
based on the following data:
The following data
related to production of ABC Company:
Units produced 2,000 units
Direct materials Rs.6
Direct labor Rs.10
Fixed overhead Rs.20,000
Variable overhead Rs.6 Cost & Management Accounting
(mgt402) Solution to Quiz
02
Special Semester 2007
Fixed selling and
administrative Rs.2000
Variable selling and
administrative Rs.2
9. Using the data given above, what will be the
unit product cost under absorption
costing?
a. Rs. 32
b. Rs. 30
c. Rs. 25
d. None of the given options
10. Using the data
given above, what will be the unit product cost under marginal
costing?
a. Rs. 22
b. Rs. 24
c. Rs. 28
d.
None of the given options
1.
Mr. Zahid received Rs. 100,000 at
the time of retirement. He has invested in a profitable Avenue. From Company A,
he received the dividend of 35% and from Company B he received the dividend of
25%. He has selected Company A for investment.
His opportunity cost will be:
a) 35,000
b) 25,000
c) 10,000
d) 55,000
2.
In increasing production volume
situation, the behavior of Fixed cost & Variable cost will be:
a) Increases, constant
b) Constant, increases
c) Increases, decreases
d) Decreases, increases
3.
While calculating the finished goods
ending inventory, what would be the formula to calculate per unit cost?
a) Cost of goods sold / number of units
sold
b) Cost of goods to be manufactured /
number of units manufactured
c) Cost of goods manufactured / number of
units manufactured
d) Total manufacturing cost / number of
units manufactured
4.
If the direct labor is Rs. 42,000
and FOH is 40% of conversion cost. What will be the amount of FOH?
a) 63,000
b) 30,000
c) 28,000
d) 16,800
5.
Which one of the following centers
is responsible to earns sales revenue?
a) Cost center
b) Investment center
c) Revenue center
d) Profit center
6.
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
7.
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
8.
When opening and closing inventories
are compared, if ending inventory is more than opening inventory, it means
that:
a) Increase in inventory
b) Decrease in inventory
c) Both a and b
d) None of the given options
9.
The total labor cost incurred by a
manufacturing entity includes which one of the following elements:
a) Direct labor cost
b) Indirect labor cost
c) Abnormal labor cost
d)
All
of the given options
10. If,
Opening
stock 1,000
units
Material
Purchase 7,000
units
Closing
Stock 500
units
Material consumed Rs. 7,500
What will be the
inventory turnover ratio?
a) 10 Times
b) 12 times
c) 14.5 times
d) 9.5 times
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