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 costs 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
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/Net-Sales.topicArticleId-21081,articleId21036.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 center 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_calculate-cost-per-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