MGT402 Current Quizzes Material (100 Mcq's)
Question # 1
Which of the following is correct?
Select correct option:
Units sold=Opening finished goods units + Units produced – Closing finished goods units
Units Sold = Units produced + Closing finished goods units - Opening finished goods units
Units sold = Sales + Average units of finished goods inventory
Units sold = Sales - Average units of finished goods inventory
Question # 2
PVC Company has ordering quantity 10,000 units. They have storage capacity 20,000 units, The average inventory would be:
Select correct option:
20,000
5,000
10,000
25,000
Question # 3
________ is the time worked over and above the employee's basic working week.
Select correct option:
Flex time
Overtime
Shift allowance
Commission
Question # 4
Cost of Goods Manufactured can be calculated as follow
Select correct option:
Total factory Cost Add Opening Work in process inventory Less Closing Work in process inventory
Total factory Cost Less Opening Work in process inventory Add Closing Work in process inventory
Total factory Cost Less Opening Work in process inventory Less Closing Work in process inventory
Total factory Cost Add Opening Work in process inventory Add Closing Work in process inventory
Question # 5
Which of the following statement is correct regarding reasons of variance?
Select correct option:
Difference between capacity level over which overhead absorption rate is calculated & capacity level attained.
Difference between FOH cost budgeted or estimated over which overhead absorption rate and FOH actually incurred.
Difference between the actual level which company achieved and budget level which company determined.
All of the given
Question # 6
The component of Factory overhead are as follow
Select correct option:
Direct material + Indirect material + Direct expenses
Indirect material + Indirect labor + Others indirect cost
Direct material + Indirect expenses + Indirect labor
Direct labor + Indirect labor + Indirect expenses
Question # 7
In which of the following would there be a difference between financial and managerial accounting?
Select correct option:
Users of the information
Purpose of the information
Flexibility of practices
All of the given options
Question # 8
Over applied FOH will always result when a predetermined FOH rate is applied and:
Select correct option:
Production is greater than defined capacity
Actual overhead costs are less than budgeted overhead
Budgeted capacity is less than normal capacity
Actual overhead incurred is less than applied Overhead
Question # 9
All of the following are cases of labor turnover EXCEPT:
Select correct option:
Workers appointed against the vacancy caused due to discharge or quitting of the organization
Workers employed under the expansion schemes of the company
The total change in the composition of labor force
Workers retrenched
Question # 10
Under LIFO method the value of issues is close to:
Select correct option:
Second hand price
Current market price
Historical cost
All of given options
Question # 11
Differential cost has the behavior of ?
Select correct option:
Fixed cost
Step cost
Variable/semi variable cost
All of the given options
Question # 12
In furniture manufacturing use of nail, pins, glue, and polish which use to increase its esteem value that cost is treated as:
Select correct option:
Direct material cost
Indirect material cost
FOH cost
Prime cost
Question # 13
A store ledger card is similar to the ______ .
Select correct option:
Stock ledger
Bin card
Material card
Purchase requisition card
Question # 14
FOH absorption rate is calculated by the way of
Select correct option:
Estimated FOH Cost/Direct labor hours
Estimated FOH Cost/No of units produced
Estimated FOH Cost/Prime Cost
All of the given options
Explanation:
ABSORPTION COSTING: Before diving into the specifics of variable costing, let's revisit the basic tenants of the traditional approach known as absorption costing (also known as "full costing"). Generally accepted accounting principles require absorption costing for external reporting, and it formed the basis for the discussion of inventory costing found in preceding chapters. Under absorption costing, normal manufacturing costs are considered product costs and included in inventory. As sales occur, the cost of inventory is transferred to cost of goods sold; meaning that the gross profit is reduced by all costs of manufacturing, whether those costs relate to direct materials, direct labor, variable manufacturing overhead, or fixed manufacturing overhead. Selling, general, and administrative costs (SG&A) are classified as period expenses.
Question # 15
Which of the following is / are element / s of production payroll?
Select correct option:
Direct labor force wages
Administrative wages
Selling wages
All of the given options
Labor costs constitute an important part of production cost. Labor cost is and element of total payroll expense of an entity. Payroll expense consists of
• Labor cost
• Administrative staff expenses
• Selling and distribution staff expenses
Question # 16
Which of the following costs is part of the prime cost for manufacturing company?
Select correct option:
Cost of transporting raw materials from the suppliers premises
Wages of factory workers engaged in machine maintenance
Depreciation of truck used for deliveries to customers
Cost of indirect production materials
Question # 17
All Indirect cost is charged/record in the head of
Select correct option:
Prime cost
FOH cost
Direct labor cost
None of the given options
Question # 18
Direct material opening inventory add net purchases is called
Select correct option:
Material consumed
Material available for use
Total material purchased
Material ending inventory
Question # 19
The journal entry of purchase of stock under periodic inventory system would be?
Select correct option:
Inventory to Cash
Cash to Purchases
Purchases to Inventory
None of the given options
http://business-accounting-guides.com/p ... inventory/
Question # 20
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
Question # 21
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
Question # 22
Net sales = Sales less:
Select correct option:
Sales returns
Sales discounts
Sales returns & allowances
Sales returns & allowances and sales discounts
Ref: http://www.cliffsnotes.com/study_guide/ ... 21036.html
Question # 23
Where the applied FOH cost is greater than the actual FOH cost it is:
Select correct option:
Unfavorable variance
Favorable variance
Normal variance
Budgeted variance
Question # 24
Merrick Differential system uses --------- rates.
Select correct option:
Two
Three
Four
Five
Question # 25
FOH applied rate of Rs. 5.60 per machine hour. During the year the FOH to Rs.275,000 and 48,000 machine hours were used. Which one of following statement is correct?
Select correct option:
Overhead was under-applied by Rs.6,200
Overhead was over-applied by Rs.6,200
Overhead was under-applied by Rs.7,200
Overhead was over-applied by Rs.7,200
Explanation:
FOH = 275000
48000*5.60 = 268800
275000 - 268800 = 6200
as the predetermined FOH is greater than actual so it will be Over-applied
Question # 26
Under/Over applied FOH cost can be adjusted in which of the following:
Select correct option:
Entire Production
Cost of Good sold
Net Profit
All of given options
Question # 27
A cost centre is
Select correct option:
A unit of product or service in relation to which costs are ascertained
An amount of expenditure attributable to an activity
A production or service location, function, activity or item of equipment for which costs are accumulated
A centre for which an individual budget is drawn up
Question # 28
All of the following are essential requirements of a good wage system EXCEPT:
Select correct option:
Reduced overhead costs
Reduced per unit variable cost
increased production
Increased operating costs
Question # 29
Increase in material Inventory means:
Select correct option:
The ending inventory is greater than opening inventory
The ending inventory is less than opening inventory
Both ending and opening inventories are equal
Can not be determined
Question # 30
Which of the following is sales force payroll incentive?
Select correct option:
Commission
Shift allowance
Over time payment
Bonus
Question # 31
A worker is paid Rs. 0.50 per unit and he produces 18 units in 7 hours. Keeping in view the piece rate system, the total wages of the worker would be:
Select correct option:
18 x 7 x 0.50 = Rs. 63
18 x 0.50 = Rs. 9 (piece rate= unit * rate)
18 x 7 = Rs. 126
7 x 0.5 = Rs. 3.5
Question # 32
If a predetermined FOH rate is not applied and the volume of production is reduced from the planned capacity level, the cost per unit expected to:
Select correct option:
Remain unchanged for fixed cost and increase for variable cost
Increase for fixed cost and remain unchanged for variable cost
Increase for fixed cost and decrease for variable cost
Decrease for both fixed and variable costs
Question # 33
Which of the following cost is used in the calculation of cost per unit?
Select correct option:
Total production cost
Cost of goods available for sales
Cost of goods manufactured
Cost of goods Sold
http://www.ehow.com/how_5100715_calcula ... -unit.html
Question # 34
Net Income before Interest and tax is also called:
Select correct option:
Operating Income/Profit
Gross Profit
Marginal Income
Other Income
Question # 35
Which of the following is an example of Statutory deductions:
Select correct option:
Deduction as Income Tax
Deduction as social security
Subscriptions to a trade union
None of the given
Question # 36
Direct material opening inventory add net purchases is called
Select correct option:
Material consumed
Material available for use
Total material purchsed
Material ending inventory
Question # 37
Inventory turnover ratio can be calculated as follow?
Select correct option:
Cost of goods sold/Average inventory
Gross profit/Average inventory
Cost of goods sold/sale
Cost of goods sold/Gross profit
Question # 38
Cost accounting concepts include all of the following EXCEPT:
Select correct option:
Planning
Controlling
Sharing
Costing
Question # 39
Overtime that is necessary in order to fulfill customer orders is called:
Select correct option:
Avoidable overtime
Unavoidable overtime
Premium Overtime
Flex time
Question # 40
If opening inventory of material is Rs.20,000 and closing inventory is Rs. 40,000.the Average inventory amount will be:
Select correct option:
Rs. 40,000
Rs. 30,000
Rs. 20,000
Rs. 10,000
Question # 41
In which of the following center FOH cost NOT incurred
Select correct option:
Production Center
Service Center
General Cost Center
Head Office
Question # 42
If labor is satisfied with high wages it may ultimately lead to:
Select correct option:
Increased production and productivity
Increased efficiency
Reduced labor and overhead costs
All of the given options
Question # 43
Byer produced 20,000 units and their total factory cost was Rs. 450,000,other cost like property tax on factory bulding was Rs. 10,000 included in that cost till year ended the cost of per unit would be:
Select correct option:
Rs.22.5
Rs.23.5
Rs.24.5
Rs.26.5
Question # 44
Which of the following best describes the manufacturing costs?
Select correct option:
Direct materials, direct labor and factory overhead
Direct materials and direct labor
Direct materials, direct labor, factory overhead, and administrative overhead
Direct labor and factory overhead
Question # 45
The Term Minimum Level Represents.
Select correct option:
This represents the quantity below which the stock of any item should not be allowed to fall
This represents the quantity below which the stock of any item should be allowed to fall
This is the estimated time period in number of days or in weeks or in months.
This is the Lead time period in number of days or in weeks or in months.
Question # 46
Which of the following is to be called product cost
Select correct option:
Material cost
Labor cost
FOH cost
All of the given options
Question # 47
The components of the prime cost are:
Select correct option:
Direct Material + Direct Labor + Other Direct Cost
Direct Labor + Other Direct Cost + FOH
Direct Labor + FOH
None of the given options
Question # 48
Store in charge after receiving the material as per the goods received note, places the material at its location and makes an entry in_______ .
Select correct option:
Bin Card page 64
Store Ledger Card
Stock Ledger
None of the given options
Question # 49
Working hours of labor can be calculated with the help of all except:
Select correct option:
Smart card
Time sheet
Clock card
Store card page 70
Question # 50
A cost unit is
Select correct option:
The cost per hour of operating a machine
The cost per unit of electricity consumed
A unit of product or services in relation to which costs are ascertained
A measure of work output in a standard hour
Question # 51
A Blanket Rate is:
Select correct option:
A single rate which used throughout the organization departments
A double rates which used throughout the organization departments
A single rates which used in different departments of the organization
None of the given options
Question # 52
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?
Select correct option:
First to be allocated to the ending inventory
Last to be allocated to the cost of goods sold
Last to be allocated to the ending inventory
First to be allocated to the cost of good sold
Question # 53
A company has calculated that volume variance for a given month was unfavorable. This could have been caused by which of the following factors?
Select correct option:
The number of rejected units was higher than normal
Machine breakdowns were higher than normal
Delays were experienced in the issuing of material to production
All of the given options
Question # 54
A method by which the good used are priced out at average cost is known as:
Select correct option:
BCVO
AVCO
c.FIFO
LIFO
Question # 55
Under Periodic Inventory system Purchase of inventory is treared as:
Select correct option:
Assets
Expense
Income
Liability
Question # 56
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:
Select correct option:
Managers
Storekeeper page 50
Production In charge
Sales supervisor
Question # 57
If, COGS = Rs. 50,000 GP Margin = 25% of sales What will be the value of Sales?
Select correct option:
Rs. 200,000
Rs. 66,667
Rs. 62,500
None of the given options
Sales = Gross profit * 100%/ 25%
Gross profit = COGS * 25% /75% = 16667
Sales = 16667*100%/ 25%= 66668
Question # 58
If, COGS = Rs. 70,000 GP Margin = 30% of sales What will be the value of Sales?
Select correct option:
Rs. 200,000
Rs. 66,667
Rs. 100,000
Rs. 62,500
Gross profit = 30000
Sales =30000 *100%/ 30%= Rs. 100,000
Page 33 and 34
Question # 59
If, Gross profit = Rs. 40,000 GP Margin = 25% of sales What will be the value of cost of goods sold?
Select correct option:
Rs. 160,000
Rs. 120,000
Rs. 40,000
Can not be determined
COGS = Gross profit * 75%/ 25%= Rs. 120,000
Question # 60
The abbreviation LIFO is:
Select correct option:
Large integrated financial organization
Least interesting financial option
The last in first out method
None of the given options
Question # 61
Which of the following is/are not associated with ordering costs?
Select correct option:
Interest
Insurance
Opportunity costs
All of the given options
Question # 62
The supervisor salary is treated as:
Select correct option:
Direct labor cost
Indirect labor cost
Conversion cost
None of the given options
Question # 63
Cost of finished goods inventory is calculated by:
Select correct option:
Multiplying units of finished goods inventory with the cost per unit
Dividing units of finished goods inventory with the cost per unit
Dividing per unit cost with finished goods inventory
Deducting total cost from finished goods inventory
Question # 64
The main purpose of cost accounting is to
Select correct option:
Maximize profits
Help in inventory valuation
Provide information to management for decision making
Aid in the fixation of selling price
Question # 65
The flux method of labor turnover denotes:
Select correct option:
Workers appointed against the vacancy caused due to discharge or quitting of the organization
Workers appointed in replacement of existing employees
Workers employed under the expansion schemes of the company
The total change in the composition of labor force
Question # 66
While calculating the EOQ, number of orders is calculated by:
Select correct option:
Multiplying the required units with cost per order
Dividing required unit by ordered quantity
Multiplying the required units with ordered quantity
Multiplying the ordered quantity with cost per order
Question # 67
Which of the following statement is TRUE about FOH applied rates?
Select correct option:
They are used to control overhead costs
They are based on actual data for each period
They are predetermined in advance for each period
None of the given
Question # 68
EOQ is a point where:
Select correct option:
Ordering cost is equal to carrying cost
Ordering cost is higher than carrying cost
Ordering cost is lesser than the carrying cost
Total cost is maximum
Question # 69
Opportunity cost is the best example of:
Select correct option:
Sunk Cost
Standard Cost
Relevant Cost
Irrelevant Cost
Question # 70
From employer point of view, the total cost of wages and salaries is a combination of which of the following?
Select correct option:
Gross wages and salaries+employer's provident fund contributions
Gross wages and salaries+employee's provident fund contributions
Gross wages and salaries + Income Tax deductions
Gross wages and salaries + pension scheme payments
Question # 71
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
Question # 72
A standard rate is paid to the employee when he completed his job:
Select correct option:
In time less than the standard
In standard time
In time more than standard
Both in standard time and more than the standard time
Question # 73
If, Sales = Rs. 600,000 Markup = 20% of cost What would be the value of Gross profit?
Select correct option:
Rs. 200,000
Rs. 100,000
Rs. 580,000
Rs. 740,000
Question # 74
Period costs are
Select correct option:
Expensed when the product is sold
Included in the cost of goods sold
Related to specific Period
Not expensed
Question # 75
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
Question # 76
If labor is satisfied with high wages it may ultimately lead to:
Select correct option:
Increased production and productivity
Increased efficiency
Reduced labor and overhead costs
All of the given options
Question # 77
Gross pay includes which of the following items?
Select correct option:
Basic pay + bonus pay
Overtime payment + shift allowances
Rent and conveyance allowances
All of the given options
Question # 78
The Economic order quantity can be calculated by:
Select correct option:
Formula Method
Table Method
Graph Method
All of the given
Question # 79
Merrick Differential Piece Rate System:
Select correct option:
worker is not penalized even if his performance does not exceed 80 per cent of the High Task.
worker is not penalized even if his performance does not exceed 70 per cent of the High Task.
worker is not penalized even if his performance does not exceed 50 per cent of the High Task.
worker is not penalized even if his performance does not exceed 30 per cent of the High Task.
Question # 80
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?
Select correct option:
Rs. 50.00 per unit
Rs. 8.33 per unit
Rs. 14.20 per unit
Rs. 100 per unit
Question # 81
Cost of goods sold can be calculated as follow
Select correct option:
Cost of goods manufactured Add Opening finished goods inventory Less Closing finished goods inventory
Cost of goods manufactured Less Opening finished goods inventory Less Closing finished goods inventory
Cost of goods manufactured Less Opening finished goods inventory Add Closing finished goods inventory
Cost of goods manufactured Add Opening finished goods inventory Add Closing finished goods inventory
Question # 82
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
Question # 83
By useing table method where-------------- is equal,that point is called Economic order quanity.
Select correct option:
Ordering cost
Carrying cost
Ordering and carrying cost
Per unit order cost
Question # 84
Which of the following is called Non Statutory deductions:
Select correct option:
Subscriptions to a trade union
Contributions by the employee to a pension scheme
Contributions by the employer to a pension scheme
All of the given
Question # 85
Which of the following is a point of differentiation between blanket rates and department rates?
Select correct option:
Blanket rate is a single overhead rate established for the entire factory
Department rates are separate overhead rates for all departments of factory through which the products pass
Department rate is a single overhead rate established for the entire factory
Blanket rates are separate overhead rates for all departments of factory through which the product passes
Question # 86
Which of the following is true when piece rate system is used for wage determination?
Select correct option:
worker is paid on the basis of time taken by him to perform the work
worker is paid on the basis of production page84
Piece rate system is more beneficial than a guaranteed minimum wage system
None of the given options
Question # 87
Where the applied FOH cost is less than the actual FOH cost it is:
Select correct option:
Unfavorable variance
Favorable variance
Normal variance
Budgeted variance
Question # 88
Factory Over head cost includes
Select correct option:
Factory Rent
Property Tax
Salaries of Factory Clerk
All of the given
Question # 89
_____ are future costs that effect the current management decision.
Select correct option:
Sunk Cost
Standard Cost
Relevant Cost
Irrelevant Cost
Question # 90
Which of the following is considered as basic systems of remunerating labor?
Select correct option:
Time rate system
Piece rate system
Halsey Premium plan
Both time rate and piece rate system
Question # 91
While deducting Income Tax from the gross pay of the employee, the employer acts as a (an) _________________for Income Tax Department.
Select correct option:
Agent of his own Company
Paid tax collection agent
Unpaid tax collection agent
None of the given options
Question # 92
When FOH is under applied and charged to Net profit , the treatment would be:
Select correct option:
Under applied Add net profit
Under applied Less net profit
Under applied Less operating expense
None of the given options
Question # 93
According to IASB framework, Financial statements exhibit to its users the:
Select correct option:
Financial position
Financial performance
Cash inflow and outflow analysis
All of the given options
Question # 94
A spending variance for factory overhead is the difference between actual factory overhead cost and factory overhead cost that should have been incurred for actual hours worked and results from:
Select correct option:
Price difference of FOH costs
Quantity differences of FOH costs
Price and quantity differences for FOH costs
Difference caused by production volume variations
Question # 95
EOQ is the order quantity that _________ over our planning horizon
Select correct option:
Minimizes total ordering costs
Minimizes total carrying costs
Minimizes total inventory costs
Minimize the required safety stock
Question # 96 1
In a repeated distribution method:
Select correct option:
Each service department in turn does not re-allocate its costs to all departments
Each service department in turn and re-allocates its costs to all departments
Each service department in turn and allocates its costs to all departments
Only one service department in turn and re-allocates its costs to all departments
Question # 97
Loss by fire is an example of:
Select correct option:
Normal Loss
Abnormal Loss
Incremental Loss
Can not be determined
Question # 98
Which of the following is not true
Select correct option:
Managerial accounting information is prepared for internal users
Preparation of Managerial accounting information is not a legal requirement
There are specific standards of acceptability for managerial accounting
The structure of managerial accounting practice is relatively flexible
Question # 99
Manufacturing entities classified the inventory in which of three kinds?
Select correct option:
Material inventory,WIP inventory,Finished goods inventory
Material inventory,purchased good inventory,WIP inventory
Material inventory,purchased good inventory,Finished goods inventory
WIP inventory,Finished goods inventory,purchased good inventory
Question # 100
Which of the following is correct for maximum level?
Select correct option:
Reorder level – (Minimum consumption x Lead time) + EOQ
(Maximum consumption x Lead time) – (Minimum consumption x Lead time) + EOQ
[(Maximum consumption - Minimum consumption) Lead time]+ EOQ
All of the given options
Which of the following is correct?
Select correct option:
Units sold=Opening finished goods units + Units produced – Closing finished goods units
Units Sold = Units produced + Closing finished goods units - Opening finished goods units
Units sold = Sales + Average units of finished goods inventory
Units sold = Sales - Average units of finished goods inventory
Question # 2
PVC Company has ordering quantity 10,000 units. They have storage capacity 20,000 units, The average inventory would be:
Select correct option:
20,000
5,000
10,000
25,000
Question # 3
________ is the time worked over and above the employee's basic working week.
Select correct option:
Flex time
Overtime
Shift allowance
Commission
Question # 4
Cost of Goods Manufactured can be calculated as follow
Select correct option:
Total factory Cost Add Opening Work in process inventory Less Closing Work in process inventory
Total factory Cost Less Opening Work in process inventory Add Closing Work in process inventory
Total factory Cost Less Opening Work in process inventory Less Closing Work in process inventory
Total factory Cost Add Opening Work in process inventory Add Closing Work in process inventory
Question # 5
Which of the following statement is correct regarding reasons of variance?
Select correct option:
Difference between capacity level over which overhead absorption rate is calculated & capacity level attained.
Difference between FOH cost budgeted or estimated over which overhead absorption rate and FOH actually incurred.
Difference between the actual level which company achieved and budget level which company determined.
All of the given
Question # 6
The component of Factory overhead are as follow
Select correct option:
Direct material + Indirect material + Direct expenses
Indirect material + Indirect labor + Others indirect cost
Direct material + Indirect expenses + Indirect labor
Direct labor + Indirect labor + Indirect expenses
Question # 7
In which of the following would there be a difference between financial and managerial accounting?
Select correct option:
Users of the information
Purpose of the information
Flexibility of practices
All of the given options
Question # 8
Over applied FOH will always result when a predetermined FOH rate is applied and:
Select correct option:
Production is greater than defined capacity
Actual overhead costs are less than budgeted overhead
Budgeted capacity is less than normal capacity
Actual overhead incurred is less than applied Overhead
Question # 9
All of the following are cases of labor turnover EXCEPT:
Select correct option:
Workers appointed against the vacancy caused due to discharge or quitting of the organization
Workers employed under the expansion schemes of the company
The total change in the composition of labor force
Workers retrenched
Question # 10
Under LIFO method the value of issues is close to:
Select correct option:
Second hand price
Current market price
Historical cost
All of given options
Question # 11
Differential cost has the behavior of ?
Select correct option:
Fixed cost
Step cost
Variable/semi variable cost
All of the given options
Question # 12
In furniture manufacturing use of nail, pins, glue, and polish which use to increase its esteem value that cost is treated as:
Select correct option:
Direct material cost
Indirect material cost
FOH cost
Prime cost
Question # 13
A store ledger card is similar to the ______ .
Select correct option:
Stock ledger
Bin card
Material card
Purchase requisition card
Question # 14
FOH absorption rate is calculated by the way of
Select correct option:
Estimated FOH Cost/Direct labor hours
Estimated FOH Cost/No of units produced
Estimated FOH Cost/Prime Cost
All of the given options
Explanation:
ABSORPTION COSTING: Before diving into the specifics of variable costing, let's revisit the basic tenants of the traditional approach known as absorption costing (also known as "full costing"). Generally accepted accounting principles require absorption costing for external reporting, and it formed the basis for the discussion of inventory costing found in preceding chapters. Under absorption costing, normal manufacturing costs are considered product costs and included in inventory. As sales occur, the cost of inventory is transferred to cost of goods sold; meaning that the gross profit is reduced by all costs of manufacturing, whether those costs relate to direct materials, direct labor, variable manufacturing overhead, or fixed manufacturing overhead. Selling, general, and administrative costs (SG&A) are classified as period expenses.
Question # 15
Which of the following is / are element / s of production payroll?
Select correct option:
Direct labor force wages
Administrative wages
Selling wages
All of the given options
Labor costs constitute an important part of production cost. Labor cost is and element of total payroll expense of an entity. Payroll expense consists of
• Labor cost
• Administrative staff expenses
• Selling and distribution staff expenses
Question # 16
Which of the following costs is part of the prime cost for manufacturing company?
Select correct option:
Cost of transporting raw materials from the suppliers premises
Wages of factory workers engaged in machine maintenance
Depreciation of truck used for deliveries to customers
Cost of indirect production materials
Question # 17
All Indirect cost is charged/record in the head of
Select correct option:
Prime cost
FOH cost
Direct labor cost
None of the given options
Question # 18
Direct material opening inventory add net purchases is called
Select correct option:
Material consumed
Material available for use
Total material purchased
Material ending inventory
Question # 19
The journal entry of purchase of stock under periodic inventory system would be?
Select correct option:
Inventory to Cash
Cash to Purchases
Purchases to Inventory
None of the given options
http://business-accounting-guides.com/p ... inventory/
Question # 20
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
Question # 21
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
Question # 22
Net sales = Sales less:
Select correct option:
Sales returns
Sales discounts
Sales returns & allowances
Sales returns & allowances and sales discounts
Ref: http://www.cliffsnotes.com/study_guide/ ... 21036.html
Question # 23
Where the applied FOH cost is greater than the actual FOH cost it is:
Select correct option:
Unfavorable variance
Favorable variance
Normal variance
Budgeted variance
Question # 24
Merrick Differential system uses --------- rates.
Select correct option:
Two
Three
Four
Five
Question # 25
FOH applied rate of Rs. 5.60 per machine hour. During the year the FOH to Rs.275,000 and 48,000 machine hours were used. Which one of following statement is correct?
Select correct option:
Overhead was under-applied by Rs.6,200
Overhead was over-applied by Rs.6,200
Overhead was under-applied by Rs.7,200
Overhead was over-applied by Rs.7,200
Explanation:
FOH = 275000
48000*5.60 = 268800
275000 - 268800 = 6200
as the predetermined FOH is greater than actual so it will be Over-applied
Question # 26
Under/Over applied FOH cost can be adjusted in which of the following:
Select correct option:
Entire Production
Cost of Good sold
Net Profit
All of given options
Question # 27
A cost centre is
Select correct option:
A unit of product or service in relation to which costs are ascertained
An amount of expenditure attributable to an activity
A production or service location, function, activity or item of equipment for which costs are accumulated
A centre for which an individual budget is drawn up
Question # 28
All of the following are essential requirements of a good wage system EXCEPT:
Select correct option:
Reduced overhead costs
Reduced per unit variable cost
increased production
Increased operating costs
Question # 29
Increase in material Inventory means:
Select correct option:
The ending inventory is greater than opening inventory
The ending inventory is less than opening inventory
Both ending and opening inventories are equal
Can not be determined
Question # 30
Which of the following is sales force payroll incentive?
Select correct option:
Commission
Shift allowance
Over time payment
Bonus
Question # 31
A worker is paid Rs. 0.50 per unit and he produces 18 units in 7 hours. Keeping in view the piece rate system, the total wages of the worker would be:
Select correct option:
18 x 7 x 0.50 = Rs. 63
18 x 0.50 = Rs. 9 (piece rate= unit * rate)
18 x 7 = Rs. 126
7 x 0.5 = Rs. 3.5
Question # 32
If a predetermined FOH rate is not applied and the volume of production is reduced from the planned capacity level, the cost per unit expected to:
Select correct option:
Remain unchanged for fixed cost and increase for variable cost
Increase for fixed cost and remain unchanged for variable cost
Increase for fixed cost and decrease for variable cost
Decrease for both fixed and variable costs
Question # 33
Which of the following cost is used in the calculation of cost per unit?
Select correct option:
Total production cost
Cost of goods available for sales
Cost of goods manufactured
Cost of goods Sold
http://www.ehow.com/how_5100715_calcula ... -unit.html
Question # 34
Net Income before Interest and tax is also called:
Select correct option:
Operating Income/Profit
Gross Profit
Marginal Income
Other Income
Question # 35
Which of the following is an example of Statutory deductions:
Select correct option:
Deduction as Income Tax
Deduction as social security
Subscriptions to a trade union
None of the given
Question # 36
Direct material opening inventory add net purchases is called
Select correct option:
Material consumed
Material available for use
Total material purchsed
Material ending inventory
Question # 37
Inventory turnover ratio can be calculated as follow?
Select correct option:
Cost of goods sold/Average inventory
Gross profit/Average inventory
Cost of goods sold/sale
Cost of goods sold/Gross profit
Question # 38
Cost accounting concepts include all of the following EXCEPT:
Select correct option:
Planning
Controlling
Sharing
Costing
Question # 39
Overtime that is necessary in order to fulfill customer orders is called:
Select correct option:
Avoidable overtime
Unavoidable overtime
Premium Overtime
Flex time
Question # 40
If opening inventory of material is Rs.20,000 and closing inventory is Rs. 40,000.the Average inventory amount will be:
Select correct option:
Rs. 40,000
Rs. 30,000
Rs. 20,000
Rs. 10,000
Question # 41
In which of the following center FOH cost NOT incurred
Select correct option:
Production Center
Service Center
General Cost Center
Head Office
Question # 42
If labor is satisfied with high wages it may ultimately lead to:
Select correct option:
Increased production and productivity
Increased efficiency
Reduced labor and overhead costs
All of the given options
Question # 43
Byer produced 20,000 units and their total factory cost was Rs. 450,000,other cost like property tax on factory bulding was Rs. 10,000 included in that cost till year ended the cost of per unit would be:
Select correct option:
Rs.22.5
Rs.23.5
Rs.24.5
Rs.26.5
Question # 44
Which of the following best describes the manufacturing costs?
Select correct option:
Direct materials, direct labor and factory overhead
Direct materials and direct labor
Direct materials, direct labor, factory overhead, and administrative overhead
Direct labor and factory overhead
Question # 45
The Term Minimum Level Represents.
Select correct option:
This represents the quantity below which the stock of any item should not be allowed to fall
This represents the quantity below which the stock of any item should be allowed to fall
This is the estimated time period in number of days or in weeks or in months.
This is the Lead time period in number of days or in weeks or in months.
Question # 46
Which of the following is to be called product cost
Select correct option:
Material cost
Labor cost
FOH cost
All of the given options
Question # 47
The components of the prime cost are:
Select correct option:
Direct Material + Direct Labor + Other Direct Cost
Direct Labor + Other Direct Cost + FOH
Direct Labor + FOH
None of the given options
Question # 48
Store in charge after receiving the material as per the goods received note, places the material at its location and makes an entry in_______ .
Select correct option:
Bin Card page 64
Store Ledger Card
Stock Ledger
None of the given options
Question # 49
Working hours of labor can be calculated with the help of all except:
Select correct option:
Smart card
Time sheet
Clock card
Store card page 70
Question # 50
A cost unit is
Select correct option:
The cost per hour of operating a machine
The cost per unit of electricity consumed
A unit of product or services in relation to which costs are ascertained
A measure of work output in a standard hour
Question # 51
A Blanket Rate is:
Select correct option:
A single rate which used throughout the organization departments
A double rates which used throughout the organization departments
A single rates which used in different departments of the organization
None of the given options
Question # 52
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?
Select correct option:
First to be allocated to the ending inventory
Last to be allocated to the cost of goods sold
Last to be allocated to the ending inventory
First to be allocated to the cost of good sold
Question # 53
A company has calculated that volume variance for a given month was unfavorable. This could have been caused by which of the following factors?
Select correct option:
The number of rejected units was higher than normal
Machine breakdowns were higher than normal
Delays were experienced in the issuing of material to production
All of the given options
Question # 54
A method by which the good used are priced out at average cost is known as:
Select correct option:
BCVO
AVCO
c.FIFO
LIFO
Question # 55
Under Periodic Inventory system Purchase of inventory is treared as:
Select correct option:
Assets
Expense
Income
Liability
Question # 56
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:
Select correct option:
Managers
Storekeeper page 50
Production In charge
Sales supervisor
Question # 57
If, COGS = Rs. 50,000 GP Margin = 25% of sales What will be the value of Sales?
Select correct option:
Rs. 200,000
Rs. 66,667
Rs. 62,500
None of the given options
Sales = Gross profit * 100%/ 25%
Gross profit = COGS * 25% /75% = 16667
Sales = 16667*100%/ 25%= 66668
Question # 58
If, COGS = Rs. 70,000 GP Margin = 30% of sales What will be the value of Sales?
Select correct option:
Rs. 200,000
Rs. 66,667
Rs. 100,000
Rs. 62,500
Gross profit = 30000
Sales =30000 *100%/ 30%= Rs. 100,000
Page 33 and 34
Question # 59
If, Gross profit = Rs. 40,000 GP Margin = 25% of sales What will be the value of cost of goods sold?
Select correct option:
Rs. 160,000
Rs. 120,000
Rs. 40,000
Can not be determined
COGS = Gross profit * 75%/ 25%= Rs. 120,000
Question # 60
The abbreviation LIFO is:
Select correct option:
Large integrated financial organization
Least interesting financial option
The last in first out method
None of the given options
Question # 61
Which of the following is/are not associated with ordering costs?
Select correct option:
Interest
Insurance
Opportunity costs
All of the given options
Question # 62
The supervisor salary is treated as:
Select correct option:
Direct labor cost
Indirect labor cost
Conversion cost
None of the given options
Question # 63
Cost of finished goods inventory is calculated by:
Select correct option:
Multiplying units of finished goods inventory with the cost per unit
Dividing units of finished goods inventory with the cost per unit
Dividing per unit cost with finished goods inventory
Deducting total cost from finished goods inventory
Question # 64
The main purpose of cost accounting is to
Select correct option:
Maximize profits
Help in inventory valuation
Provide information to management for decision making
Aid in the fixation of selling price
Question # 65
The flux method of labor turnover denotes:
Select correct option:
Workers appointed against the vacancy caused due to discharge or quitting of the organization
Workers appointed in replacement of existing employees
Workers employed under the expansion schemes of the company
The total change in the composition of labor force
Question # 66
While calculating the EOQ, number of orders is calculated by:
Select correct option:
Multiplying the required units with cost per order
Dividing required unit by ordered quantity
Multiplying the required units with ordered quantity
Multiplying the ordered quantity with cost per order
Question # 67
Which of the following statement is TRUE about FOH applied rates?
Select correct option:
They are used to control overhead costs
They are based on actual data for each period
They are predetermined in advance for each period
None of the given
Question # 68
EOQ is a point where:
Select correct option:
Ordering cost is equal to carrying cost
Ordering cost is higher than carrying cost
Ordering cost is lesser than the carrying cost
Total cost is maximum
Question # 69
Opportunity cost is the best example of:
Select correct option:
Sunk Cost
Standard Cost
Relevant Cost
Irrelevant Cost
Question # 70
From employer point of view, the total cost of wages and salaries is a combination of which of the following?
Select correct option:
Gross wages and salaries+employer's provident fund contributions
Gross wages and salaries+employee's provident fund contributions
Gross wages and salaries + Income Tax deductions
Gross wages and salaries + pension scheme payments
Question # 71
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
Question # 72
A standard rate is paid to the employee when he completed his job:
Select correct option:
In time less than the standard
In standard time
In time more than standard
Both in standard time and more than the standard time
Question # 73
If, Sales = Rs. 600,000 Markup = 20% of cost What would be the value of Gross profit?
Select correct option:
Rs. 200,000
Rs. 100,000
Rs. 580,000
Rs. 740,000
Question # 74
Period costs are
Select correct option:
Expensed when the product is sold
Included in the cost of goods sold
Related to specific Period
Not expensed
Question # 75
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
Question # 76
If labor is satisfied with high wages it may ultimately lead to:
Select correct option:
Increased production and productivity
Increased efficiency
Reduced labor and overhead costs
All of the given options
Question # 77
Gross pay includes which of the following items?
Select correct option:
Basic pay + bonus pay
Overtime payment + shift allowances
Rent and conveyance allowances
All of the given options
Question # 78
The Economic order quantity can be calculated by:
Select correct option:
Formula Method
Table Method
Graph Method
All of the given
Question # 79
Merrick Differential Piece Rate System:
Select correct option:
worker is not penalized even if his performance does not exceed 80 per cent of the High Task.
worker is not penalized even if his performance does not exceed 70 per cent of the High Task.
worker is not penalized even if his performance does not exceed 50 per cent of the High Task.
worker is not penalized even if his performance does not exceed 30 per cent of the High Task.
Question # 80
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?
Select correct option:
Rs. 50.00 per unit
Rs. 8.33 per unit
Rs. 14.20 per unit
Rs. 100 per unit
Question # 81
Cost of goods sold can be calculated as follow
Select correct option:
Cost of goods manufactured Add Opening finished goods inventory Less Closing finished goods inventory
Cost of goods manufactured Less Opening finished goods inventory Less Closing finished goods inventory
Cost of goods manufactured Less Opening finished goods inventory Add Closing finished goods inventory
Cost of goods manufactured Add Opening finished goods inventory Add Closing finished goods inventory
Question # 82
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
Question # 83
By useing table method where-------------- is equal,that point is called Economic order quanity.
Select correct option:
Ordering cost
Carrying cost
Ordering and carrying cost
Per unit order cost
Question # 84
Which of the following is called Non Statutory deductions:
Select correct option:
Subscriptions to a trade union
Contributions by the employee to a pension scheme
Contributions by the employer to a pension scheme
All of the given
Question # 85
Which of the following is a point of differentiation between blanket rates and department rates?
Select correct option:
Blanket rate is a single overhead rate established for the entire factory
Department rates are separate overhead rates for all departments of factory through which the products pass
Department rate is a single overhead rate established for the entire factory
Blanket rates are separate overhead rates for all departments of factory through which the product passes
Question # 86
Which of the following is true when piece rate system is used for wage determination?
Select correct option:
worker is paid on the basis of time taken by him to perform the work
worker is paid on the basis of production page84
Piece rate system is more beneficial than a guaranteed minimum wage system
None of the given options
Question # 87
Where the applied FOH cost is less than the actual FOH cost it is:
Select correct option:
Unfavorable variance
Favorable variance
Normal variance
Budgeted variance
Question # 88
Factory Over head cost includes
Select correct option:
Factory Rent
Property Tax
Salaries of Factory Clerk
All of the given
Question # 89
_____ are future costs that effect the current management decision.
Select correct option:
Sunk Cost
Standard Cost
Relevant Cost
Irrelevant Cost
Question # 90
Which of the following is considered as basic systems of remunerating labor?
Select correct option:
Time rate system
Piece rate system
Halsey Premium plan
Both time rate and piece rate system
Question # 91
While deducting Income Tax from the gross pay of the employee, the employer acts as a (an) _________________for Income Tax Department.
Select correct option:
Agent of his own Company
Paid tax collection agent
Unpaid tax collection agent
None of the given options
Question # 92
When FOH is under applied and charged to Net profit , the treatment would be:
Select correct option:
Under applied Add net profit
Under applied Less net profit
Under applied Less operating expense
None of the given options
Question # 93
According to IASB framework, Financial statements exhibit to its users the:
Select correct option:
Financial position
Financial performance
Cash inflow and outflow analysis
All of the given options
Question # 94
A spending variance for factory overhead is the difference between actual factory overhead cost and factory overhead cost that should have been incurred for actual hours worked and results from:
Select correct option:
Price difference of FOH costs
Quantity differences of FOH costs
Price and quantity differences for FOH costs
Difference caused by production volume variations
Question # 95
EOQ is the order quantity that _________ over our planning horizon
Select correct option:
Minimizes total ordering costs
Minimizes total carrying costs
Minimizes total inventory costs
Minimize the required safety stock
Question # 96 1
In a repeated distribution method:
Select correct option:
Each service department in turn does not re-allocate its costs to all departments
Each service department in turn and re-allocates its costs to all departments
Each service department in turn and allocates its costs to all departments
Only one service department in turn and re-allocates its costs to all departments
Question # 97
Loss by fire is an example of:
Select correct option:
Normal Loss
Abnormal Loss
Incremental Loss
Can not be determined
Question # 98
Which of the following is not true
Select correct option:
Managerial accounting information is prepared for internal users
Preparation of Managerial accounting information is not a legal requirement
There are specific standards of acceptability for managerial accounting
The structure of managerial accounting practice is relatively flexible
Question # 99
Manufacturing entities classified the inventory in which of three kinds?
Select correct option:
Material inventory,WIP inventory,Finished goods inventory
Material inventory,purchased good inventory,WIP inventory
Material inventory,purchased good inventory,Finished goods inventory
WIP inventory,Finished goods inventory,purchased good inventory
Question # 100
Which of the following is correct for maximum level?
Select correct option:
Reorder level – (Minimum consumption x Lead time) + EOQ
(Maximum consumption x Lead time) – (Minimum consumption x Lead time) + EOQ
[(Maximum consumption - Minimum consumption) Lead time]+ EOQ
All of the given options
hope that these will be helpfull in midterms
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