1). Fixed cost per unit decreases when:
- Production volume increases.
- Production
volume decreases.
- Variable
cost per unit decreases.
- Variable
cost per unit increases.
2). Prime cost + Factory overhead cost
is:
a. Conversion cost.
b. Production cost.
c. Total cost.
d. None of given option.
3). 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.
a. Rs. 10,000
b. Rs. 20,000
c. Rs. 70,000
d. Rs. 1,60,000
4). If Cost of goods sold = Rs. 40,000
GP Margin = 20% of sales
Calculate the Gross profit margin.
a. Rs. 32,000
b. Rs. 48,000
c. Rs. 8,000
d. Rs. 10,000
5).______________ 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.
a.
FIFO
b.
Weighted
average method
c.
Most
recent price method
d.
LIFO
Fill
in the blanks: (5
x 1)
1). Indirect cost that is incurred in producing product or
services but which can not traced in full.
2 Sunk cost is the cost that incurred or
expended in the past which can not be retrieved.
3). Conversion cost = Direct Labor + FOH
4). If cost of goods sold Rs. 20,000 and Sales
Rs. 50,000 then Gross Markup Rate is 150%
5). Under Perpetual
system, a complete and continuous record of movement of each inventory item is
maintained.
1.
Cost of production report is a _________________.
- Financial
statement
- Production process report
- Order
sheet
- None
of given option.
2.
There are ___________ parts of cost of production report.
- 4
- 5
- 6 ( 6th is concerned with calculation of loss)
- 7
3.
Which one of the organization follows the cost of production report
_________________?
- Textile unit
- Chartered
accountant firm
- Poultry
forming
- None
of the given option.
4.
_____________________ part of cost of production report explains the cost
incurred during the process.
- Quantity
schedule
- Cost
accounted for as follow
- Cost charge to the department
- None
of given option
Solve the question 5
to 7. If units put
in the process 7,000, units completed and transfer out 5,000. Units still in
process (100% Material, 50% Conversion cost). 500 units were lost. Cost
incurred during the process Material and Labor Rs. 50,000 and 60,000.
5.
Find the number of units that will appear in quantity schedule
- 5,750
- 7,000
- 5,000
- 6,500
6.
Find the value of per unit cost of both material and conversion cost
- Material 7.69; Conversion cost 10.43
- Material
7.14; Conversion cost 10.43
- Material
7.14; Conversion cost 9.23
- None
of given option
7.
Find the value of cost transferred to next department:
- Rs.
57,500
- Rs.
50,000
- Rs.
70,000
- None of given option.
8. In case of second
department find the increase of per unit cost in case of unit lost. Cost received from previous
department is Rs. 1,40,000.
- 1.43
- (2.13)
- 1.54
- 1.67
9.
Opening work in process inventory can be calculated under
- FIFO and Average costing
- LIFO
and Average costing
- FIFO
and LIFO costing
- None
of given option
10
_________________ needs further
processing to improve its marketability.
- By product
- Joint Product
- Augmented product
- None of the given option
1. Jan 1; finished goods inventory of
Manuel Company was $3, 00,000. During the year Manuel’s cost of goods sold was
$19, 00,000, sales were $2, 000,000 with a 20% gross profit. Calculate cost
assigned to the December 31; finished goods inventory.
a. $ 4,00,000
b. $ 6,00,000
c. $ 16,00,000
d. None of given options
2. The main purpose of cost accounting is
to:
a. Maximize profits.
b. Help in inventory valuation
c.
Provide information to
management for decision making
d. Aid in the fixation of selling price
3. The combination of direct material
and direct labor is
a. Total production Cost
b. Prime Cost
c. Conversion Cost
d. Total manufacturing Cost
4. The cost expended in the past that
cannot be retrieved on product or service
a. Relevant Cost
b. Sunk Cost
c. Product Cost
d. Irrelevant Cost
5. 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?
a. Machine hours
b. Cost of materials used
c. Direct labor hours
d. Direct labor dollars
6. A typical factory overhead cost is:
a. distribution
b. internal audit
c. compensation of plant manager
d. design
7. An industry that would most likely
use process costing procedures is:
a.
tires
b. home construction
c. printing
d. aircraft
e.
8.
Complete the following table
|
|
Per unit
|
Total
|
|
Fixed cost
|
Increase
|
Constant
|
|
Variable cost
|
|
|
|
Total cost
|
Increase
|
Decrease
|
a. Constant, Decrease
b. Decrease, Decrease
c. Increase, Increase
d. Increase, Decrease
9. The Kennedy Corporation uses Raw Material Z in a
manufacturing process. Information as to balances on hand, purchases and
requisitions of Raw Material Z is given below:
Jan.
1 Balance: 200 lbs.
@ $1.50
08 Received 500 lbs. @ $1.55
18 Issued 100 lbs.
25 Issued 260 lbs.
30 Received 150 lbs. @ $1.60
08 Received 500 lbs. @ $1.55
18 Issued 100 lbs.
25 Issued 260 lbs.
30 Received 150 lbs. @ $1.60
If
a perpetual inventory record of Raw Material Z is maintained on a FIFO basis,
it will show a month end inventory of:
- $240
- $784
- $759
- $767
10. A disadvantage of an hourly wage plan is
that it:
a.
Provides
no incentive for employees to achieve and maintain a high level of production.
b. [1]Is hardly ever used and is difficult
to apply.
c. Establishes a definite rate per hour
for each employee.
d. Encourages employees to sacrifice
quality in order to maximize earnings.
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
Apportionment of the
Accumulated Cost/Total Cost accounted for, for the month in CPR
____________
a. Rs. 24,250 Approximately
b. Rs. 56,987 Approximately
c. Rs. 58,200
Approximately
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 labor & FOH are
_________
a. 3,500 units
b. 39,500 units
c. 43,000 units
d. None of the given options
3. Unit cost of lost unit after adjustment (by
using any method) _________
a. Rs. 0.64
b. Rs. 0.36
c. Rs. 0.18
d. None of the given options
MCQ # 4, 5 and 6 are
based on the following data:
In
Department No. 315 normal production losses are discovered at the end of
process. During January 2007 following costs were charged to Department 315:
Particulars
Rs.
Direct
Materials 30,000
Direct
Labor 20,000
Manufacturing
overhead 10,000
Cost
from preceding department 96,000
Data
of production quantities is as follows:
Particulars
Units
Received
in 12,000
Transferred
out 7,000
Normal
Production Loss 1,000
Partly
processed units in Department No. 315 were completed 50%.
4. Cost of normal loss (where normal loss is
discovered at the end of process)
_________:
a. Rs. 14,000
b. Rs. 44,000
c. Rs. 1, 12,000
d. None of the given options
5. Equivalent units of material __________
a. 2,000 units
b. 7,000 units
c. 10,000 units
d. None of the given options
6. Unit cost of Direct Labor__________
a. Rs. 1
b. Rs. 2
c. Rs. 3
d. None of the given options
7. 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.
Equivalent units of material __________
a. 9,000 units
b. 56,500 units
c. 59,500 units
d. None of the given options
8. For which one of the following industry would
you recommend a Job Order Costing system?
a. Oil Refining
b. Grain dealing
c. Beverage production
d. Law Cases
9. For which one of the following industry would
you recommend a Process Costing system?
a. Grain dealer
b.
Television repair shop
c.
Law office
d.
Auditor
10. The difference
between total revenues and total variable costs is known as:
a. Contribution
margin
b. Gross margin
c. Operating income
d. Fixed costs
11. Percentage of
Margin of Safety can be calculated in which one of the following ways?
a. Based on budgeted Sales
b.
Using budget profit
c.
Using profit & Contribution ratio
d. All of the
given options
12. Which of the
following represents a CVP equation?
a. Sales = Contribution margin (Rs.) + Fixed
expenses + Profits
b. Sales = Contribution margin ratio + Fixed
expenses + Profits
c. Sales =
Variable expenses + Fixed expenses + profits
d. Sales = Variable expenses – Fixed expenses +
profits
13.
If 120 units produced, 100 units were sold @ Rs. 200 per unit. Variable cost
related to production & selling is Rs. 150 per unit and fixed cost is Rs.
5,000. If the management wants to decrease sales price by 10%, what will be the
effect of decreasing unit sales price on profitability of company? (Cost &
volume profit analysis keep in your mind while solving it)
a. Remains constant
b. Profits will increased
c. Company will have to face losses
d. None of the given options
14. If 120 units produced, 100 units were sold @
Rs. 200 per unit. Variable cost related to production & selling is Rs. 150
per unit and fixed cost is Rs. 5,000. If the management wants to increase sales
price by 10%, what will be increasing sales profit of company by increasing
unit sales price. (Cost & volume profit analysis keep in your mind while solving
it)
a. Rs.2,000
b. Rs. 5,000
c. Rs. 7,000
d. None of the given options
MCQ # 15, 16, 17 and
18 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 2,800,000
Contribution margin
1,200,000
Less: 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.
15. What is the
company's contribution margin ratio?
a. 30%
b. 70%
c. 150%
d. None of given options
16. 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
17. How many units
would the company have to sell to attain target profits of Rs. 600,000?
a.
88,000 units
b. 100,000 units
c. 106,668 units
d. None of given options
18. What is the
company's margin of safety in Rs?
a. Rs. 480,000
b. Rs. 1,600,000
c. Rs. 2,400,000
d. None of given options
19. Which of the
following statement(s) is (are) true?
a. A manufacturer of ink cartridges would
ordinarily use process costing rather than job-order costing
b. If a company uses a process costing system it
accumulates costs by processing department rather than by job
c. The output of a processing department must be homogeneous in order to use process
costing
d. All of the
given options
20. Which of the
following statements is (are) true?
a. Companies that produce many different products or
services are more likely to use job-order costing systems than process costing
systems
b.
Job-order costing systems are used by manufactures only and process costing
systems are used by service firms only
c.
Job-order costing systems are used by service firms and process costing systems
are used by manufacturers
d.
All of the given options
21. Product cost is
normally:
a. Higher in
Absorption costing than Marginal costing
b. Higher in Marginal costing than Absorption
costing
c. Equal in both Absorption and Marginal costing
d. None of the given options
22. Using absorption
costing, unit cost of product includes which of the following combination of
costs?
a.
Direct materials, direct labor and fixed overhead
b.
Direct materials, direct labor and variable overhead
c. Direct materials, direct labor, variable overhead and
fixed overhead
d.
Only direct materials and direct labor
23.
Marginal costing is also known as:
a.
Indirect costing
b.
Direct costing
c.
Variable costing
d. Both (b) and (c)
MCQ # 24 & 25 are
based on the following data:
The following data
related to production of ABC Company:
Units produced 1,000 units
Direct materials Rs.6
Direct labor Rs.10
Fixed overhead Rs.6000
Variable overhead Rs.6
Fixed selling and
administrative Rs.2000
Variable selling and
administrative Rs.2
24. Using the data
given above, what will be the unit product cost under absorption costing?
a. Rs. 22
b. Rs. 28
c. Rs. 30
d. None of the given options
25. 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
26. The break-even
point is the point where:
a. Total sales revenue equals total expenses
(variable and fixed)
b. Total contribution margin equals total fixed
expenses
c. Total sales revenue equals to variable
expenses only
d. Both a & b
27. The break-even
point in units is calculated using_______
a. Fixed expenses and the contribution margin
ratio
b. Variable expenses and the contribution margin
ratio
c. Fixed expenses
and the unit contribution margin
d. Variable expenses and the unit contribution
margin
28. 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
d. The excess of budgeted net income over actual
net income
29. The contribution
margin ratio is calculated by using which one of the given formula?
a. (Sales - Fixed Expenses)/Sales
b. (Sales -
Variable Expenses)/Sales
c. (Sales - Total Expenses)/Sales
d. None of the given options
30. Data of a company
XYZ is given below
Particulars Rs.
Sales 15,00,000
Variable cost 9,00,000
Fixed Cost 4,00,000
Break Even Sales in Rs. __________
a. Rs. 1, 00,000
b. Rs. 2, 00,000
c. Rs. 13, 00,000
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. Which one of the following cost
would not be termed as Product Costs?
a) Indirect Material
b) Direct Labor
c) Administrative Salaries
d) Plant supervisor’s Salary
7. Which of the following ratios
expressed that how many times the inventory is turning over towards the cost of
goods sold?
a) Inventory backup ratio
b) Inventory turnover ratio
c) Inventory holding period
d) Both A & B
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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