MIDTERM EXAMINATION
Spring 2010
MGT402- Cost & Management Accounting (Session - 2)
Ref No:
Time: 60 min
Marks: 47
| Student Info | |
| StudentID: | |
| Center: | OPKST |
| ExamDate: | 5/29/2010 12:00:00 AM |
| For Teacher's Use Only | |||||||||
| Q No. | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | Total |
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| Q No. | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | |
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| Q No. | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | |
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| Q No. | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32 | |
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| Q No. | 33 | 34 | 35 | 36 | 37 | | | | |
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Question No: 1 ( Marks: 1 ) - Please choose one
Which of the following is added in purchases in order to get the value of Net purchases? ► Purchases returns
► Carriage inward
► Trade discount
► Rebates
Question No: 2 ( Marks: 1 ) - Please choose one
A typical factory overhead cost is: ► Distribution
► Internal audit
► Compensation of plant manager
► Design
Question No: 3 ( Marks: 1 ) - Please choose one
Costs that change in response to alternative courses of action are called: ► Relevant costs
► Differential costs
► Target costs
► Sunk costs
Question No: 4 ( Marks: 1 ) - Please choose one
Which of the following best describes the manufacturing costs? ► Direct materials, direct labor and factory overhead
► Direct materials and direct labor only
► Direct materials, direct labor, factory overhead, and administrative overhead
► Direct labor and factory overhead
Question No: 5 ( Marks: 1 ) - Please choose one
If, COGS = Rs. 50,000GP Margin = 25% of sales
What will be the value of Sales?
► Rs. 200,000
► Rs. 66,667
► Rs. 62,500
► Rs. 400,000
Question No: 6 ( Marks: 1 ) - Please choose one
Which of the following is correct? ► 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 No: 7 ( Marks: 1 ) - Please choose one
When prices are rising over time, which of the following inventory costing methods will result in the lowest gross margin? ► FIFO
► LIFO
► Weighted Average
► Cannot be determined
Question No: 8 ( Marks: 1 ) - Please choose one
Which of the following would be the effect, if inventory is not properly measured? ► Expenses and revenues cannot be properly matched
► Unfair position in Financial Statements
► Inventory items show under or over stocking
► All of the given options
Question No: 9 ( Marks: 1 ) - Please choose one
If, Basic Salary Rs.10,000Per Piece commission Rs. 5
Unit sold 700 pieces
What will be the total Salary?
► Rs. 3,500
► Rs. 13,500
► Rs. 10,000
► Rs. 6,500
Question No: 10 ( Marks: 1 ) - Please choose one
The term cost allocation is described as: ► The costs that can be identified with specific cost centers.
► The costs that can not be identified with specific cost centers.
► The total cost of factory overhead needs to be distributed among specific cost centers.
► None of the given options
Question No: 11 ( Marks: 1 ) - Please choose one
The term Cost apportionment is referred to: ► The costs that can not be identified with specific cost centers.
► The total cost of factory overhead needs to be distributed among specific cost centers but must be divided among the concerned department/cost centers.
► The total cost of factory overhead needs to be distributed among specific cost centers.
► None of the given options
Question No: 12 ( Marks: 1 ) - Please choose one
Nelson Company has following FOH detail. Budgeted (Rs.) Actual (Rs.)
Production Fixed overheads 36,000 39,000
Production Variable overheads 9,000 12,000
Direct labor hours 18,000 20,000
What would be the amount of under/over applied FOH
► Under applied by Rs.1,000
► Over applied by Rs.1,000
► Under applied by Rs.11,000
► Over applied by Rs.38,000
Question No: 13 ( Marks: 1 ) - Please choose one
PEL & co found that a production volume of 400 units corresponds to production cost of Rs, 10,000 and that a production volume of 800 units corresponds to production costs of Rs.12,000. The variable cost per unit would be? ► Rs. 5.00 per unit
► Rs. 1.50 per unit
► Rs. 2.50 per unit
► Rs. 0.50 per unit
Question No: 14 ( Marks: 1 ) - Please choose one
Which of the following loss is expected in manufacturing process and represents a necessary cost of processing the marketable units? ► Operating loss
► Abnormal loss
► Normal loss
► Extraordinary loss
Question No: 15 ( Marks: 1 ) - Please choose one
Under perpetual Inventory system at the end of the year: ► No closing entry passed
► Closing entry passed
► Closing value find through closing entry only
► None of the above.
Question No: 16 ( Marks: 1 ) - Please choose one
A company applied overheads on machine hours which were budgeted at 11,250 with overhead of Rs.258, 750.Actual results were 10,980 hours with overheads of Rs.254, 692. Overhead were? ► Over applied by Rs.4, 058
► Under applied by Rs.2, 152
► Under applied by Rs.4, 058
► Over applied by Rs.2, 152
Question No: 17 ( Marks: 1 ) - Please choose one
The components of total factory cost are: ► Direct Material + Direct Labor
► Direct Labor + FOH
► Prime Cost only
► Prime Cost + FOH
Question No: 18 ( Marks: 1 ) - Please choose one
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? ► 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 No: 19 ( Marks: 1 ) - Please choose one
Which of the following is NOT an assumption of the basic economic-order quantity model? ► Annual demand is known
► Ordering cost is known
► Carrying cost is known
► Quantity discounts are available
Question No: 20 ( Marks: 1 ) - Please choose one
Which of the following is NOT reason of abnormal loss? ► Defective material used
► Machine breakdown
► Poor workmanships
► Natural disaster
Question No: 21 ( Marks: 1 ) - Please choose one
Complete the following table when activity level increases above the normal level: | | Per unit | Total |
| Fixed cost | Increase | Constant |
| Variable cost | ? | ? |
| Total cost | Increase | Decrease |
► Decrease, Decrease
► Increase, Increase
► Constant, Increase
► Increase, Decrease
Question No: 22 ( Marks: 1 ) - Please choose one
You are required to calculate number of units sold of ABC Fans Company for the first quarter of the year with the help of given information. | Inventory opening | |
| Finished goods (100 fans) | Rs. 43000 |
| Direct material | Rs. 268000 |
| Inventory closing | |
| Finished goods (200 fans) | Not known |
| Direct material | Rs. 167000 |
| No of units manufactured | 567 units |
► 300 units
► 767 units
► 467 units
► 667 units
Question No: 23 ( Marks: 1 ) - Please choose one
Given data that:Work in Process Opening Inventory Rs. 20,000
Work in Process Closing Inventory 10,000
Finished goods Opening Inventory 30,000
Finished goods Closing Inventory 50,000
Cost of goods sold 190,000
What will be the value of cost of goods manufactured?
► Rs. 200,000
► Rs. 210,000
► Rs. 220,000
► Rs. 240,000
Question No: 24 ( Marks: 1 ) - Please choose one
In cost accounting, unavoidable loss is charged to which of the following? ► Factory over head control account
► Work in process control account
► Marketing overhead control account
► Administration overhead control account
Question No: 25 ( Marks: 1 ) - Please choose one
Payroll includes: ► Salaries & Wages of direct labor
► Salaries & Wages of Indirect labor
► Salaries & Wages of Administrative staff
► Salaries & Wages of direct labor, Indirect labor, and Administrative & Selling Staff
Question No: 26 ( Marks: 1 ) - Please choose one
Which of the given statement is CORRECT for Indirect Labor? ► It is charged to factory over head account
► It is charged to work in process
► It is entire production
► It is charged to administrative expenses
Question No: 27 ( Marks: 1 ) - Please choose one
A production worker paid salary of Rs. 700 per month plus an extra Rs. 5 for each unit produced during the month. This labor cost is best described as: ► A fixed cost
► A variable cost
► A semi variable cost
► A step fixed cost
Question No: 28 ( Marks: 1 ) - Please choose one
Calculate Estimated FOH with the help of given data:| Estimated Direct labour hours | 50,000 Hours |
| Over applied FOH | Rs. 5,000 |
| Under applied FOH | Rs. 15,000 |
| Overhead absorption rate | Rs. 5.00/hour |
► Rs. 25,000
► Rs. 50,000
► Rs. 75,000
► Rs. 250,000
Question No: 29 ( Marks: 1 ) - Please choose one
In which of the situation spending variance will give unfavorable result? ► Actual factory overhead is less than absorbed factory overhead
► Actual factory overhead is greater than absorbed factory overhead
► Budgeted factory overhead for actual volume is less than actual factory overhead
► Absorbed factory overhead less than budgeted factory overhead for actual volume
Question No: 30 ( Marks: 1 ) - Please choose one
All the given statements regarding job cost sheets are incorrect EXCEPT: ► Job cost sheet shows only direct materials cost on that specific job
► Job cost sheet must show the selling costs associated with a specific job
► Job cost sheet must show the administrative costs associated with a specific job
► Job cost sheet shows direct materials cost, direc labour cost and factory overhead costs associated with a specific job
Question No: 31 ( Marks: 1 ) - Please choose one
In process costing, each producing department is a: ► Cost unit
► Cost centre
► Investment centre
► Sales centre
Question No: 32 ( Marks: 1 ) - Please choose one
With reference to cost of production report, cost accounted for as follows is also known as: ► Cost reconciliation
► Bank reconciliation
► Cash reconciliation
► Capital reconciliation
Question No: 33 ( Marks: 1 ) - Please choose one
Identify units transferred out with the help of given data: | | Units |
| Units still in process (100%material, 75% conversion ) | 4,000 |
| Lost units | 2,000 |
| Units started in process | 50,000 |
► 6,000 units
► 44,000 units
► 52,000 units
► 56,000 units
Question No: 34 ( Marks: 1 ) - Please choose one
Details of the process for the last period are as follows:| Put into process | 5,000 kg |
| Materials | Rs. 2,500 |
| Labor | Rs.700 |
| Production overheads | 200% of labor |
Normal losses are 10% of input in the process. The out put for the period was 4,200 Kg from the process. There was no opening and closing Work- in- process. What were the units of abnormal loss?
► 500 units
► 300 units
► 200 units
► 100 units
Question No: 35 ( Marks: 3 )
50, 000 units were received from preceding department, 9,000 units were still in process at the end of month (complete all material, 75% Labour & FOH). 500 lost units were 60% complete as to material and conversion costs. This loss is considered as abnormal and is to be charged to factory overhead. Required: You are required to calculate equivalent units of material, labour and factory overhead.
Question No: 36 ( Marks: 5 )
Irfan Industries Limited has two production departments A and B and two mutually interdependent service departments X and Y. Cost of service departments is apportioned on the basis of following %ages:| | A | B | X | Y |
| Service department X | 50% | 30% | - | 20% |
| Service department Y | 40% | 50% | 10% | - |
Following figures of departmental costs are available after the primary distribution:
| Department A | 15,750 | Department B | 7,500 |
| Department X | 11,750 | Department Y | 5,000 |
Calculate total factory overhead of production department by preparing a work sheet showing the secondary distribution using Repeated apportionment method.
Question No: 37 ( Marks: 5 )
Factory overhead absorption rate of a pharmaceutical is Rs 2.50. Budgeted Factory overhead at two activity levels is as follows for that period. | | Activity level | Budgeted factory overhead |
| Low | 20,000 Hours | Rs. 45,000 |
| High | 40,000 Hours | Rs. 75,000 |
Actual Factory overhead for that period was Rs. 42,000 and actual volume was 25,000 hours.
Required:
i. Variable factory overhead absorption rate
ii. Budgeted variable factory overhead at high activity level 40,000 hours.
iii. Budgeted fixed factory overhead
Greatly helpfull
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