a.Labour efficiency variance
b.Total Labour variance
c.Labour rate variance
d.Idle time variance
2)Which of the following is a correct definition of the key factor?
a.The factor which limits the activities of the undertaking
b.The factor which maximised sales
c.The factor which the top management feel is important
d.The amount of cash available during the budget period
3)Select the correct journal entry for the following transaction. "Received ERs. 475/- from M/S. Aloha & Co. in full settlement of Rs.500/-".
a.Cash account: Dr. Rs.475/- Discount account: Dr. Rs.25/- To M/S. Aloha & Co. A/B
b.Cash account: Dr. Rs.475/- To M/S. Aloha & Co. A/B CPR. Rs.475/-
c.Cash account: Dr. Rs.500/- To M/S. Aloha & Co. A/B CPR. Rs.500/-
d.Cash account: Dr. Rs.475/- To M/S. Aloha & Co. A/B CPR. Rs.450/- To Discount
account CPR. Rs.25/-
4)XYZ Ltd. has sufficient idle capacity. It has received an enquiry for the supply of 300 units (packed in better box at an additional cost of Rs.20/- per box). The variable cost of manufacturing the product is Rs.150/-. The company expects a profit of Rs.6,000/- from this wholesale offer. What minimum price should it quote for this deal?
5)From the following particulars, calculate the machine hour rate of overhead absorption. A company has three production departments and two service departments. The overhead analysis sheet provides the following totals of the overheads analysed to production and service departments. Production Departments: X - Rs.48,000; Y-Rs.42,000; Z - Rs.30,000. Service Departments: A - Rs.14,040; B - Rs.18,000. The expenses of the service departments are apportioned as follows: Service department A - Production department X - 20%; Production department Y - 40%; Production department Z - 30%; Service department B - 10%. Service department B - Production department X - 40%; Production department Y - 20%; Production department Z - 20%; Service department A - 20%. Details of machine hours are as follows: Production department X - 1,000 hours; Production department Y - 1,000 hours; Production department Z - 1,000 hours.
a.X - Rs.5.316, Y - Rs.5.952 and Z - Rs.3.936
b.X - Rs.5.952, Y - Rs.3.936 and Z - Rs.5.316
c.X - Rs.5.952, Y - Rs.5.316 and Z - Rs.3.936
d.X - Rs.5.316, Y - Rs.3.936 and Z - Rs.5.952
6)While preparing the bank reconciliation statement as on 31st March, 2004 you find the following discrepancy: 'a cheque of Rs.3,700/- received and deposited in bank on 27th March, 2004 was entered credited in the pass book on 3rd April, 2004.' In this background, which of the following statement holds true as on 31st March, 2004?
a.Balance as per pass book < Balance as per bank book b.Balance as per pass book = Balance as per bank book c.Balance as per pass book >Balance as per bank book
d.Balance as per pass book < Balance as per pass book
7)Judge the statement according to the criteria given : The accounting period for XYZ Ltd. ends on 31st December, 2003. It is noted that office rent for the month of December, 2003 is paid on 15th January, 2004. "According to concept of matching expenses with the revenues, this expenditure should be recorded in the books of accounts in January".
a.The statement and its reason are both correct
b.The statement is correct but its reason is incorrect
c.The statement is incorrect but its reason is correct
d.The statement and its reason are both incorrect
8)The cost that indicates historical cost, which is incurred in past, is known as . . .
9)A firm has purchased a machine for manufacturing a new product, the cost data for which is given below.
10)Calculate the machine hour rate. The amount of overhead pertaining to June, 2004 to be apportioned is Rs.170,010/-. The machine cannot work without an operator. During the month June, 2004 the machine operator has been paid for 5,670 hours.
11)A withdrawal of Rs.500/- from Mr. Jone's account on 2nd October, 2004 has been entered by the bank in the pass book of Mr. Johny's account. If you are preparing the bank reconciliation statement considering the balance as per pass book as on 31st October,2004 is Rs.2,250/- for Mr. Johny, find out the balance as per his bank book.
12)The present unit cost data for a product is as follows: selling price Rs.15/-, variable costs Rs.8/-. If selling prices are reduced by 10% and variable costs are increased by 12.5%. Which of the following is the amended contribution to sales ratio?
13)Which of the following operations would normally be carried out first when preparing a master budget?
a.Determining the budget period
b.Calculating the overhead absorption rates
c.Identifying the principal budget factor
d.Preparing a forecast profit and loss account
14)Purchased 200 shares of Bart Forge Ltd. for Rs.850/- per share, which account should be debited?
a.investment account - Rs.170,000/-
b. Investment account - Rs.850/-
c. Cash account - Rs.850/-
d. Cash account - Rs.170,000/-
15)which variance is used to analyse the effect of change in the quantity of output from a given mix of inputs?
a. Materials mix variance
b. Materials yield variance
c. Labour mix variance
d. Labour efficiency variance
16)State the features of these transactions: (i) Commission paid Rs.250/- was posted twice to Commission account. (ii) Rs.5,000/- representing goods sold to A, was posted to the credit to commission received account. (iii) Sold machine for Rs.8000/-, was credited to Sales account.
a. The debit side of the trial balance will be in excess by Rs.250/-
b. The debit side of the trial balance will be in excess by Rs.13,250/-
c. Involves an error of principle
d. Involves an error of commission
17)Select the transactions which can be entered in the Journal paper.
18)Marginal costing is useful in the following areas:
a.Plant shut down decisions
b.Make or buy decisions
d.Apportionment of overheads
19)The different purposes served by standard costing technique are:
b. Cost awareness
c. Performance appraisal
d. Profit planning
20)Select the various methods adopted for treatment of under or over absorbed overheads.
a.Use of supplementary rates
b. Carrying over the amount to remaining period
c. Writing off to the Costing Profit and Loss Account
d. Writing off to the Financial Profit and Loss Account
21)The balance as per bank book as on 30th November, 2004 was Rs.6,500/- and the bank pass book balance as on the same date was Rs.8,015/-. Select the transactions representing the reasons for this difference.
a.Bank charges not entered in the bank book Rs.90/-
b.Cheques deposited but not cleared Rs.1,200/-
c.Unpresented cheques Rs.2,625/-
d.Bank interest not entered in the bank book Rs.90/-
22)If the sales forecast is less than the past sales but the top management insists upon a certain amount of additional profits, then following steps can be taken to achieve the target profit
a.Increase the selling price
b.Reduce cost of sales
c.Increase the selling efforts
d.Increase the sales volume
23)Select the correct statements.
Ram's account: Dr. Rs.10,000
To Bank account: Rs.10,000
a.Ram is a creditor
b.Rs.10,000/- has been paid to Ram
c.The payment is made by cheque
d.Ram is an employee
24)Error of commission refer to calculation errors, totaling errors, errors in carrying forward etc.
25)The actual hours taken by the labour are compared with the standard hours allowed for output to find out the labour yield variance.
26)A fixed budget is useful only when the actual level of activity corresponds to the budgeted level of activity.
27)Goods sent to the customers on approval basis should be treated as sales.
28)While preparing bank reconciliation statement for the month of September 2004, one should consider the balance as per bank book as on 1st September, 2004 and the balance as per pass book as on 30th September, 2004.
29)In marginal costing, under and over absorption of fixed overheads is bound to arise.
30)A cash payment of Rs.1,000/- for traveling expenses has been entered in the books but not debited to traveling A/c. The trial balance will NOT agree.
31)Collection charges of Rs.4/- on a cheque received from Calcutta should be dash in the bank book.
32)The analysis which is also referred as 'what if' analysis is known as dash
a.cost volume profit analysis
b.cost variance analysis
c.contribution marginal analysis
d.profit variance analysis
33)An error of partial omission can be rectified by either debiting or crediting the dash account, as the case maybe.
34)The cash flow format is used for preparing the cash budget by the dash
35)Fixed overhead volume variance = Expenditure variance + Capacity variance + Calendar +dash variance.
36)Warehousing cost is an item of
37)In case of seasonal industry, the budget period may be taken as One season 5 years One month 10 years .
38)In order to rectify the totaling mistake, wherein the sales return ledger was undercast by Rs.2,000/-, the suspense account should be credited debited adjusted appended with __________ Rs.2,000/-.
39)Match the following:
Selling and distribution budget :- Cost of demand creation
Salary of CEO
Interest on loan
Cost of spoilage and defective work
Scrap generated during production
Administration budget Cost of demand
creation Salary of CEO
Interest on loan
Cost of spoilage and defective work
Scrap generated during production
Materials budget Cost of demand creation Salary of CEO Carriage inwards Interest on loan Cost of spoilage and defective work Scrap generated during production
Cash budget Cost of demand creation Salary of CEO Carriage inwards Interest on loan Cost of spoilage and defective work Scrap generated during production
40)Match the following:
Power Horse power of machine
Number of material requisitions
Cubic feet of steam supplied
Direct labour hours
Number of light points Machine hours
Stores department Horse power of machine Number of material requisitions Cubic feet of steam supplied Direct labour hours Number of light points Machine hours
Boiler house Horse power of machine Number of material requisitions Cubic feet of steam supplied Direct labour hours Number of light points Machine hours
Tool-room expenses Horse power of machine Number of material requisitions Cubic feet of steam supplied Direct labour hours Number of light points Machine hours
1. Choose the correct answer.
From the following particulars, calculate the machine hour rate of overhead absorption.
A company has three production departments and two service departments. The
overhead analysis sheet provides the following totals of the overheads analysed to
production and service departments. Production Departments :X- Rs.48,000; Y-
Rs.42,000; Z-Rs.30,000.Service Departments : A-Rs.14,040; B-Rs.18,000. The
expenses of the service departments are apportioned as follows : Service department A
- Production department X-20%; Production department Y - 40%; Production
department Z- 30%; Service department B - 10%.Service department B- Production
department X-40%; Production department Y - 20%; production department Z- 20%;
Service department A - 20%. Details of machine hours are as follows: Production
department X -1,000 hours; Production department Y-1,000 hours; Production
department Z-1,000 hours.
a) X - Rs.5.316, Y - Rs.5.952 and Z - Rs.3.936
b) X - Rs.5.952, Y - Rs.3.936 and Z - Rs.5.316
c) X - Rs.5.952, Y - Rs.5.316 and Z - Rs.3.936
d) X - Rs.5.316, Y - Rs.3.936 and Z - Rs.5.952
2. The sum of indirect material cost, indirect labour cost and indirect expenses is termed
as factory cost.
3. Loans which are borrowed from financial institutions are to be paid off in 8 years,
should be disclosed as _______________________ in the balance sheet.
Current liabilities;Investments;Capital;Long term liabilities
4. Choose all that apply
The features of multiplicity of key factors are as follows :-
a)____ Only one key factor
b)____ More than one key factors
c)____ Refers to a complex situation
d)____ Can be resolved by using linear programming technique
5. Choose all that apply
Material Yield variance -Rs.1,000/- (Adverse); material mix variance -Rs.250/-
(Favourable) and material price variance - Rs.350/- (Favourable). Find material cost
variance and material usage variance.
a)____ Material cost variance -Rs.400/- (Adverse)
b)____ Material usage variance -Rs.750/-
c)____ Material usage variance is favourable
d)____ Material usage variance is adverse
6. Choose all that apply
Techniques of management accounting include:-
a)____ Marginal costing
b)____ Cost control
c)____ Budgetary control
d)____ Standard costing
7. Choose the correct answer.
A perpetual inventory system may be defined as :-
a) The checking of physical stock against the quantity and quality of new material required
b) The documentation system which records all stores transactions on a continuous basis
c) The checking of stock on the same date in each accounting period
d) Ensuring that stocktaking procedures conform to a previously agreed procedure
8. Obsolescence arises when a machine has to be discarded in favour of one better adopted to its purpose and giving better result.
9. Choose the correct answer.
A wholesaler supplies 40 cricket bats to different shopkeepers on each working day.
Presently the wholesaler is purchasing bats in lots of 200 at a cost of Rs.60,000/- per
lot. On every order he incurs a handling charge of Rs.150/- and freight charge of
Rs.250/- per order. Multiple and fractional lots can also be ordered. All orders are
supplied the next day. The wholesaler finances investment in inventory by paying 2%
monthly interest on borrowed funds. Incremental storage cost per bat is Rs.8/-. How
many bats should be ordered at a time to minimize total annual inventory cost,
assuming that there are 300 working days in a year?
a) 1,200 bats
b) 746 bats
c) 500 bats
d) 346 bats
10. Choose all that apply
Plant and equipment can become a key factor in the following circumstances :-
a)____ Limited capacity due to lack of capital
b)____ Insufficient number of workers to work in the plant
c)____ Insufficient capacity due to shortage of space
d)____ Limited number of hours for which the plant can be used
11. Choose all that apply
Select the examples of functional budgets:-
a)____ Sales budget
b)____ Production budget
c)____ Research and development budget
d)____ Capital expenditure budget
12. Choose the correct answer.
The wages paid to a trainee who constructs wooden mould for concrete laying on a
building contract should be defined as :-
a) Direct labour cost
b) Indirect labour cost
c) Fixed labour cost
d) Non-controllable labour cost
13. New companies can adopt Uniform costing system as a ready-made system.
14. Preparation of direct material ____________ budget is the responsibility of the
15. Choose the correct answer.
Judge the following narrative according to the criteria given : There are many
organizations whose sales fluctuate with fluctuations in the weather, viz. ice-cream,
a) The statement and the reason are both incorrect
b) The statement is correct but the reason is incorrect
c) The statement is incorrect but the reason is correct
d) The statement and the reason are both correct
16. Choose the correct answer.
Find the budget which is inadequate as a cost control technique :-
a) Flexible budget
b) Budgeted Balance Sheet
c) Fixed budget
d) Sales budget
17. _______________ Accounting is the process of analysis and interpretation of
financial data collected with help of financial accounting & cost accounting
18. Choose all that apply
In which of the following situations, the flexible budget should be preferred?
a)____ Sales are too difficult to predict
b)____ Supply level of input cannot be predicted
c)____ Standard level of production activity
d)____ Varying levels of production activity
19. Depreciation charged on office furniture on straight line basis is an example of
Factory overheads; Selling overheads;
Distribution overheads; Administration overheads
20. Choose all that apply
The net profit before certain adjustments was Rs.95,040/-. After giving due effects to
the adjustments, the revised net profit (after considering the adjustments) is
Rs.78,560/-. Select the adjustments which might have brought this change.
a)____ Accrued commission income of Rs.32,960/- was not entered in the books
b)____ Rent for the month of March was payable and yet to be recorded
c)____ Rent for the month of March was receivable and yet to be recorded
d)____ Repairs expenditure to the extent of Rs.30,160/- was wrongly transferred
to Machinery account
21. Choose all that apply
Features of Taylor's differential piece rate system are as follows :-
a)____ Strong incentive to inefficient and new workers.
b)____ Minimal clerical work is involved in calculating the wages
c)____ Helps in building up an efficient labour force
d)____ Strong incentive to efficient and ambitious workers.
22. Choose the correct answer.
Calculate the machine hour rate. The amount of overhead pertaining to June, 2004 to
be apportioned is Rs.170,010/-. The machine cannot work without an operator.
During the month June, 2004 the machine operator has been paid for 5,670 hours.
23. Choose the correct answer.
XYZ Ltd. has a profit volume ratio of 40%. By what percentage should sales be
increased to offset 20% reduction in selling price, so that the existing profit remains
24. Cost Accounting is concerned with calculation of the profitability and state of affairs
of the organization as a whole.
25. Choose the correct answer.
Product costs under direct costing include:-
a) Prime cost only
b) Prime cost and variable factory overheads
c) Prime cost and fixed factory overheads
d) Prime cost, variable and fixed factory overheads
26. The process of attributing proportions of items of costs amongst cost centres is called
Cost allocation;Cost apportionment;Overhead absorption;Absorption of indirect costs
27. Choose the correct answer.
Interest on bank loan, was paid till the quarter ending 30th September, 2003,
Rs.36,000/-. Find the amount to be debited to the profit and loss account for the year
ending on 31st March, 2004, assuming the loan is not yet repaid as on this date.
28. Match the following
1. Indirect Material ( ) 1. Function wise classification
2. Administration overheads ( ) 2. Variability wise classification
3. Fixed overheads ( ) 3. Element wise classification
4. Abnormal overheads ( ) 4. Procedure wise classification
5. Normality wise classification
6. Controllability wise classification
29. Match the following
1. Change in total cost/ Change in (4) 1. Margin of safety ratio
2. Total sales X Profit volume ratio (6) 2. Variable cost per unit
3. Selling price ( Actual sales–Break (2) 3. Profit
4. Change in profit/ Change in (5) 4. Profit volume ratio
5. Margin of safety
6. Total contribution