Management Accounting - A17

ASSIGNMENT QUESTIONS
1. Price based on Uniform Costing may be taken to be reliable and representative of the whole industry.
a) true
b) false
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2. If the profit volume ratio is 25%, then the variable cost is equal to _____________of sales value.
1;0.75;0.25;0.5
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3. Choose all that apply.
Causes for adverse material price variance are:-
a)____ Uneconomical size of purchase orders
b)____ Failure to avail discounts allowed by suppliers
c)____ Economical size of purchase orders
d)____ Excessive freight charges
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4. In the ledger account only credit entries relating to a particular account are posted.
a) true
b) false
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5. Choose the correct answer.
The bank book shows an overdraft of Rs.117/- as on 31st December, 2003. It is found that the pass book is debited with Rs.11/- representing a dishonored cheque, originally received from Mr.A. The fact of dishonor was not recorded in the bank book. Find the balance as per pass book.
a) Rs.128/- (overdraft)
b) Rs.128/- (credit)
c) Rs.106/-(overdraft)
d) Rs.106/- (credit)
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6. Choose the correct answer.
Opening stock valued at Rs.7,400/-; Purchases Rs.24,700/-; Wages Rs.5,400/-; Sales Rs.48,600/-; Closing stock Rs.7,000/-. Calculate Gross Profit?
a) Rs.25,100/-
b) Rs.15,000/-
c) Rs.18,100/-
d) Rs.11,800/-
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7. Choose the correct answer.
A firm has monthly fixed cost commitment of Rs.200,000/-. It is producing only one product which is sold at a price of Rs.80/- per unit. Per unit variable cost is Rs.50/-. Calculate annual break even point.
a) 80,000 units
b) 90,000 units
c) 64,000 units
d) 74,000 units
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8. Time rate system is suitable for workers of the maintenance department.
a) true
b) false
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9. All personal expenses of the owner should be debited to the organization's profit and loss account.
a) true
b) false
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10. 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.
a) Rs.29.98
b) Rs.30/-
c) Rs.30.98
d) Rs.29/-
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11. Choose the correct answer.
The process of recording the costs in a formal and systematic manner with the intention of preparing statistical data there from to ascertain the cost, is known as :-
a) Cost accounting
b) Management accounting
c) Costing
d) Financial accounting
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12. Choose the correct answer.
Material price variance for a job is Rs.800/- (Favourable). Actual quantity of material used is 100 kg where as the standard quantity of material is 120% of actual quantity. Actual price paid for the material is 80% of the standard price. Calculate material cost variance
a) Rs.800/- (Favourable)
b) Rs.800/- (Adverse)
c) Rs.1,600/- (Favourable)
d) Rs.1,600/- (Adverse)
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13. Choose all that apply.
Locate the error and its features in the following :-
a)____ Compensating errors
b)____ Trial balance will not be affected
c)____ Trial balance will be affected
d)____ Error of principle
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14. The process of finding the reasons for the difference in the balance as per bank book and pass book is known as ___________________.
Reconsideration;Rectification;Reevaluation;Reconciliation
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15. Choose all that apply.
Select the advantages of standard cost system :-
a)____ Provides reliable basis for budgeting
b)____ Facilitates delegation of authority
c)____ Promotes economy and efficiency
d)____ Assists plant shut down decisions
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16. In a Balance-Sheet, right hand side is referred as assets side and left hand side is referred as liabilities.
a) true
b) false
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17. Financial Statements which are generated as a result of the management accounting report & financial performance of the organization as a whole.
a) true
b) false
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18. Depreciation charged on office furniture on straight line basis is an example of _________________________.
Distribution overheads;Selling overheads;Factory overheads;Administration overheads
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19. Time-keeping facilitates the preparation of payroll.
a) true
b) false
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20. Choose all that apply.
From the following transactions find the value of closing stock on 4/10/04, 7/10/04 and 12/10/04 using the simple average method of issue pricing. 1/10/04 - Purchased 400 units @ Rs.5/-. 4/10/04 - Issued to production 120 units. 5/10/04 - Purchased 200 units @ Rs.6/-. 7/10/04 - Issued to production 180 units. 11/10/04 - Purchased 100 units @ Rs.7/-. 12/10/04 - Issued to production 160 units.
a)____ 4/10/04 - 280 units @ Rs.1,400/-
b)____ 7/10/04 - 300 units @ Rs.1,610/-
c)____ 7/10/04 - 300 units @ Rs.1,700/-
d)____ 12/10/04 - 240 units @ Rs.1,350/
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21. Choose all that apply.
For the following transactions find out the value of material issued using FIFO (First in first out) method. 1/7/04 - Opening balance 200 units @ Rs.10/- 3/7/04 - Issued to production department 80 units. 4/7/04 - Purchased 300 units @ Rs.11/-. 6/7/04 - Issued to production department 150 units. 8/7/04 - Purchased 250 units @ Rs.13/-. 11/7/04 - Issued to production department 170 units.
a)____ 3/7/04 - 80 units @ Rs.10/-
b)____ 6/7/04 - 120 units @ Rs.10/- and 30 units @ Rs.11/-
c)____ 11/7/04 - 170 units @ Rs.11/-
d)____ 11/7/04 - 170 units @ Rs.13/-
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22. The difference between sales and prime cost is known as . Net Profit;Operating Margin;Contribution Margin;Gross Profit
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23. Choose the correct answer.
The direct material usage budget and direct material purchase budget differ because of which of the following?
a) The level of material scrap forecast to occur
b) The level of efficiency of men or machines
c) A planned change in the level of finished goods stock
d) A planned change in the level of material stock
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24. Choose the correct answer.
Which system involves adoption of same costing principles, practices and procedures by the individual firms of an industry?
a) Uniform costing
b) Standard costing
c) Absorption costing
d) Multiple costing
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25. Payment by method lowers the cost of production through their impact on fixed costs.
Results,cheques,time,cash
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26. Match the following:
1. Non operating income ( 4 ) 1. Bad debts
2. Selling and distribution overheads ( 3 ) 2. Repair for factory building
3. Factory overheads ( 2) 3. Advertisement expenses.
4. Total cost ( 6 ) 4. Profit on sale of investment
5. Loss on sale of investment
6. Cost of finished goods
27. The various contents of a uniform cost manual are organization, cost accounting system and .
Size of organization, Presentation of information,organization structure,number of departments,
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28. The method of overhead apportionment which considers both the material cost as well as the labour cost, is known as method.
Supplementary rate,prime cost percentage rate,machine hour rate,direct labour hour rate
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29. Choose all that apply
The reasons and objectives of budgets may be stated as :-
a)____ To aid the planning of annual operations
b)____ To communicate the organizational plans to the different departments
c)____ To motivate the managers to strive for attainment of the organizational goals
d)____ To motivate the managers to strive for their promotions
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30. The reports generated by financial accounting are meant for the use by management for effective decisions.
a) true
b) false
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31. Match the following:
1. Ordering cost (1) 1 Can be obtained subtracting closing stock from the sum of material cost and opening stock
2. Carrying cost (3) 2. Can be obtained subtracting opening stock from the sum of material cost and closing stock
3. Material cost (5) 3. Sum of possession cost, ordering cost and purchase cost
4. Cost of material consumed (2) 4. Cost of holding the inventory
5. Cost of administrative efforts
6. Cost of issuing the inventory
32. Choose all that apply
You have received tenders from two suppliers - X & Co. and Y & Co. The details regarding price and other terms and conditions are as follows : X & Co. : Price Rs.5/- per unit; trade discount 15% and cash discount 4% if bills are paid within a fortnight; freight Rs.2/- per 100 units. Y & Co. : Price Rs.4/- per unit upto 2,000 units; no cash discount but 15% per annum interest is charged if bills are paid within a fortnight from receipt of materials; freight Rs.3/- per 100 units. 10,000 units are required every month. The organization pays 50% of total monthly bills every fortnight. Compare the total cost for the organization for transacting with X & Co. and Y & Co. and advise the supplier with whom the order should be placed.
a)____ Cost to the organization :Y & Co. -Rs.40,425.94
b)____ Cost to the organization : Y & Co.-Rs.41,850/-
c)____ Order should be placed with Y & Co.
d)____ Total cost is lower with Y & Co.
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33. Category A items, as per ABC analysis, represent % of the total number of items in inventory.
Less than 10, 50 to 70,more than 10 ,70 to 100
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34. The final result disclosed by trading account is the profit earned by the organization.
Gross,net , marginal,incremental
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35. Choose all that apply
Items debited to Profit & Loss Account are :
a)____ Salary
b)____ Discount allowed
c)____ Purchases of raw material
d)____ Postage & telegram
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36. Choose all that apply
The selection of the supplier may depend upon the following aspects:-
a)____ Geographical location of the supplier
b)____ Price quoted by the supplier
c)____ Goodwill of the supplier
d)____ Profit making ability of the supplier
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37. Choose the correct answer.
Standard labour cost of a job has been specified as 50 hours work by skilled workers @ Rs.20/- per hour and 150 hours work by unskilled workers @ Rs.10/- per hour. Actual time taken was 70 hours by skilled workers @ Rs.18/- per hour and 170 hours by unskilled workers @ Rs.13/- per hour. Calculate labour yield variance.
a) Rs.500/- (Adverse)
b) Rs.100/- (Adverse)
c) Rs.140/- (Adverse)
d) Rs.370/- (Adverse)
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38. Choose all that apply
Pre-requisites of Uniform Costing are :-
a)____ Spirit of mutual trust
b)____ Free Exchange of ideas
c)____ Tendency of withholding information
d)____ No rivalry
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39. Match the following:
1. Sales revenue maximization (5) 1. Traditional approach
2. Advertising through electronic media (2) 2. Business organizations of the new
millennium
3. Profit maximization (1) 3. Rothschild
4. Equity shares (4) 4. Maximum risk
5. Baumol
6. Bureaucracy and red tapeism
40. Choose all that apply
For the month of November, a firm has budgeted sales of 20,000 units of X at a price of Rs.10/- and sale of 30,000 units of Y at a price of Rs.6/- per unit. Actual sale during the month was 35,000 units of X at Rs.9/- per unit and 25,000 units of Y at Rs.8/- per unit. Calculate sales volume variance, sales mix variance and sales quantity variance.
a)____ Sales volume variance -Rs.120,000/- (Favourable)
b)____ Sales mix variance -Rs.44,000/- (Favourable)
c)____ Sales Quantity variance-Rs.76,000/- (Favourable)
d)____ Sales volume variance -Rs.76,000/- (Favourable)
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41. A note is prepared when excess material is returned to stores
Material returned,material requisition,material transfer,goods recived
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42. Choose the correct answer.
Low inventory ratio indicates :-
a) Efficient utilization of material
b) Inefficient utilization of material
c) Decrease in stock of material
d) Increase in sales
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43. Choose the correct answer.
Judge the statement in italics based on the criteria given :- On 31st March, 2004 Sita Enterprises sent goods worth Rs.30,000/- on approval basis to Mr. Ram. These goods should be included in the closing stock as on 31st March, 2004 because the ownership is still with the seller, viz. Sita Enterprise.
a) The statement and the reason both are correct
b) The statement and the reason both are incorrect
c) The statement is correct but the reason is incorrect
d) The statement is incorrect but the reason is correct
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44. The short run financial plan which acts as a guide to achieve the predefined targets is known as .
Manul,budgeted profit & loss account,budgeted balance sheet,budget
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45. Financial Accounting primarily protects the interests of the outsiders dealing with organization in various capacities.
a) true
b) false
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46. The effect of price reduction is always reduction in the margin of safety and also reduction in the break even point.
a) true
b) false
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47. Choose the correct answer.
The cost of fixed asset is Rs. 1,00,000. Rs. 17,000 is charged as depreciation. Calculate the rate of depreciation.
a) 0.15
b) 0.2
c) 0.17
d) 0.13
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48. Choose all that apply
A materials requisition form normally contains the following aspects:-
a)____ Vendors' name
b)____ Quantity requisitioned
c)____ Per unit material cost
d)____ Job number
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49. Debit all the expenses and credit all the income is the rule of the Real Account.
a)true
b)false
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50. If excess of cash is estimated in the cash budget, it may be possible to utilize it to give bonus to the employees.
a)true
b)false
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51. Budgetary control is one of the techniques of management accounting.
a)true
b)false
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52 A pre-determined factory overhead rate holds up product costing.
a)true
b)false
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