ASSIGNMENT QUESTIONS
1. Choose the correct answer.
Mr.X has Rs.200,000/- invested in his business firm. He wants a 15% return on his
money. From an analysis of recent cost figures, he finds that his variable cost of
operating is 60% of sales, his fixed costs are Rs.80,000/- per year. Mr.X estimates that
even if he closed the doors of his business, he would incur Rs.25,000/- as expenses per
year. At what sales would he be better off by locking his business up.
a) Rs.42,500/-
b) Rs.52,500/-
c) Rs.62,500/-
d) Rs.72,500/-
Ans.
2. Choose the correct answer.
Calculate inventory holding period. Safety stock - 250 units; maximum stock - 6,500
units; re-order quantity - 3,800 units and material issued during 2003 is 24,000 units.
a) 66 days
b) 66.9 days
c) 67 days
d) 67.9 days
Ans.
3. Choose all that apply
The quarterly production of a company's product which has a steady market is 20,000
units. Each unit of product requires 0.5 kg of raw material. The cost of placing one
order for raw material is Rs.100/- and the inventory carrying cost is Rs.2/- per kg per
annum. The lead time for procurement of raw material is 36 days and a safety stock of
1,000 kg of raw materials is maintained by the company. The company has been able
to negotiate the following discount structure with the raw material supplier : For order
quantity below 7,000 kg -discount per order is NIL. For order quantity between 7,000
kg and 8,000 kg., discount per order is Rs.400/-. For order quantity between 8,000 kg
and 16,000 kg., discount per order is Rs.2,000/-. For order quantity between 16,000 kg
and 30,000 kg., discount per order is Rs.3,200/-. Find the statements which indicate the
correct costs for the different order sizes.
a)____ If order size is 6,667 units, total cost is Rs.6,867/-
b)____ If order size is 10,000 units, total cost is Rs.8,400/-
c)____ If order size is 20,000 units, total cost is Rs.17,000/-
d)____ If order size is 5,000 units, total cost is Rs.5,400/-
Ans.
4. 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
Ans.
5. Choose all that apply.
S Ltd. operates a system of standard costing in respect of one of its products which is
manufactured within a single cost centre. For one unit of product the standard
material input is 20 litres at a standard price of Rs.2/- per litre. The standard wage
rate is Rs.6/- per hour and 5 hours are allowed to produce one unit. Fixed production
overhead is absorbed at the rate of 100% of direct wages cost. During the month just
ended the following occurred : acutal price paid for materials purchased Rs.1.95 per
litre; total direct wages cost was Rs.156,000/- and fixed production overheads was
Rs.158,000/-. Direct material price variance-Rs.8,000/- (Fabourable); direct material
usage variance -Rs.5,000/- (Adverse); direct labour rate variance -Rs.5,760/-
(Adverse); direct labour efficiency variance -Rs.2,760/- (Favourable) and fixed
produciton overheads expenditure variance -Rs.8,000/-(Adverse). Calculate budgeted
output in units for the month, actual hours worked and number of litres purchased
during the month.
a)____ Budgeted output - 5,000 units
b)____ Actual hours worked - 24,040 hours
c)____ Litres purchased - 160,000 litres
d)____ Litres purchased - 157,500 litres
Ans.
6. Choose the correct answer.
The following data is available for a company for the month of April, 2004 : Territory
I : selling expenses Rs.7,600/-; distribution cost Rs.4,000/-; number of units sold –
16,000; sales Rs.76,000/-. Territory II : selling expenses Rs.4,200/-; distribution cost
Rs.1,800/-; number of units sold -6,000; sales Rs.28,000/-. Territory III : selling
expenses Rs.6,240/-; distribution cost Rs.2,000/-; number of units sold -10,000; sales
Rs.52,000/-. The company adopts sales basis and quantity basis for application of
selling and distribution costs respectively. Compute the amount of selling and
distribution costs chargeable to a consignment of 4,000 units of a product sold in each
territory at Rs.2.50 per unit.
a) Territory I -Rs.2,000/-; Territory II -Rs.2,000/- and Territory III -Rs.2,000/-
b) Territory I -Rs.2,700/-; Territory II -Rs.2,700/- and Territory III -Rs.2,700/-
c) Territory I -Rs.2,700/-; Territory II -Rs.2,700/- and Territory III -Rs.2,000/-
d) Territory I -Rs.2,000/-; Territory II -Rs.2,700/- and Territory III -Rs.2,000/-
6Ans.
7. Choose the correct answer.
Currently Beta Ltd. is earning a contribution of Rs.80/- per unit and the variable cost is
Rs.180/- per unit. Its fixed costs are Rs.200,000/-. Its existing sales are 5,000 units.
The company has a proposal that the sales staff may be paid a commission of 10% of
sales instead of fixed salaries totaling Rs.80,000/-. This action is expected to increase
the sales by 10%. Compute the amount of profit assuming the proposal is accepted?
a) Rs.177,000/-
b) Rs.200,000/-
c) Rs.178,000/-
d) Rs.277,000/-
Ans.
8. Choose the correct answer.
The quantity of raw material in the purchases budget may be higher than the quantity
of raw material in the production budget because :-
a) The stock levels are being reduced
b) The raw material prices are falling
c) The company obtains discount for bulk purchases
d) The units sold will be higher than units made
Ans.
9. Choose all that apply.
The data for XYZ Ltd. is as follows : Fixed assets Rs.60,000/-; total cost Rs.105,000/-
; working capital is equal to 25% of the sales value. The company expects 25% return
on capital employed. Capital employed is equal to fixed assets plus working capital.
Select the correct answers:-
a)____ Sales Rs.128,000/-
b)____ Return on capital employed
c)____ Rs.15,000/-
d)____ Working capital Rs.32,000/-Ans.
MANAGEMENT ACCOUNTING ASSIGNMENT QUESTIONS
1. Match the following
1. Debit side of bank book (4) 1. Henceforth, there shall be maximum
is overcast differences in overdraft balances
2. Interest on debentures (5) 2. Henceforth, there shall be no difference
directly credited by bank in overdraft balances
3. Received sanction for a (3) 3. Overdraft as per bank book =
loan of Rs.10 lakhs Balances per pass book
4. Closed the account with (2) 4. Overdraft as per bank book <
State Bank of India Overdraft as per pass book
5. Overdraft as per bank book >
Overdraft as per pass book
6. Overdraft as per bank book =
Overdraft as per pass book
2. _______________ Accounting assists the management in establishing the plans to
attain the economic objectives and take proper decisions for the attainment of its
objectives.
Inflation; Cost; Management; Financial
Ans. Management
3. The __________________________ variance is the difference between the actual
variable overhead incurred and the standard variable overhead charged to production.
Variable overhead efficiency; Variable overhead volume;
Total variable overhead; Total fixed overhead
Ans. Total variable overhead
4. Choose the correct answer.
Select the cost that indicates increased or decreased total cost due to the increased or
decreased volume of operations :-
a) Differential cost
b) Opportunity cost
c) Sunk cost
d) Variable cost
Ans. A
5. Choose all that apply
Which of the following transactions should be excluded while preparing a cost sheet?
a)____ Sale of scrap material
b)____ Interest on loan
c)____ Bad debts
d)____ Expenses on criminal law suit
Ans. B,c,d
6. The closing stocks should ____________________ the cost of the goods which sent on
approval basis.
Be decreased by; Exclude; Not get affected by; Be increased by
Ans. Be increased by
7. Choose all that apply
Marginal costing is found to be unsuccessful in the following situations :-
a)____ Impossible to distinguish costs into fixed and variable component.
b)____ Existence of key factor which will limit the volume of output.
c)____ With respect to capital intensive industries where fixed costs are very large
and hence cannot be ignored
d)____ With respect to service industries where employee costs are very large and
almost fixed in nature
Ans. A,c,d
8. Choose all that apply
You are using petrol as one of the raw materials. Daily you purchase 1,000 liters of
petrol at Rs.28.50 per liter. 5% of it generally gets lost due to spillage and evaporation.
On a particular hot and dry day, the issue of petrol from 1,000 liters drum was as
follows : To job X 200 liters; job Y 400 liters and job Z 320 liters. After these issues
the drum was empty. Calculate per liter charge for use of petrol, quantum of loss and
total quantum of petrol used for jobs X,Y and Z.
a)____ Loss due to spillage and evaporation - 30 liters.
b)____ Rate of charge per liter of petrol - Rs.30/-
c)____ Rate of charge per liter of petrol - Rs.30.98
d)____ Total petrol used for jobs X, Y and Z - 920 liters
Ans. A,b
9. Penalty paid for delay in payment to creditors represents uncontrollable cost.
a) true
b) false
Ans. B
10. A complete list of all material required, with quantities, for a particular job is given in
the ______________________________.
Bill of material; Bill of exchange; Purchase order; Material requisition
Ans. Bill of material
11. Choose all that apply
The production budget may be prepared in terms of :-
a)____ Units produced
b)____ Production cost
c)____ Material cost, selling cost and overheads
d)____ Material cost, labour cost and overheads
Ans. A,b,d
12. Creche expenses may be appropriately apportioned on the basis of ______________.
Total number of employees; Direct labour cost;
Number of female workers; Direct labour hours
Ans. Number of female workers
13. Bank charges debited in the pass book represent clerical mistake on the part of the
bank employees.
a) true
b) false
Ans. B
14. ______________________ variance arises when the mix of materials used in the
production is different from the predetermined standard mix of operation.
Sales margin mix; Materials mix; Labour mix; Product mix
Ans. Materials mix
15. Choose the correct answer.
A cost incurred in the past and irrelevant for decision making is known as :-
a) Discretionary cost
b) Controllable cost
c) Sunk cost
d) Standard cost
Ans. C
16. Choose all that apply
Labour turnover means :-
a)____ Influx and exit of employees
b)____ Quantitative measurement of instability of working force
c)____ Rate of change in the average working force
d)____ Influx and exit of customers
Ans. A,b,c
17. 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
Ans. A,b,c
18. Malik started business by contributing cash Rs.50,000/- and his personal car worth
Rs.25,000/-; thus his capital account should be credited with Rs.75,000/-.
a) true
b) false
Ans. A
19. Choose the correct answer.
A company budgets for a production of 150,000 units. The variable cost per unit is
Rs.14/- and fixed cost is Rs.2/- per unit. The company fixes its selling price to fetch a
profit of 15% on total cost. What is the break even point for the company?
a) 68,182 units
b) 68,100 units
c) 61,182 units
d) 61,100 units
Ans. A
20. Choose all that apply
From the following select the examples of errors of commission :-
a)____ Purchases of fixed assets recorded in the purchase register
b)____ Sales recorded in the sales register as Rs.2,020/- instead of Rs.2,200/-
c)____ Received cash from Sham, credited to Ram's account
d)____ Paid transport charges, credited to transport charges account
Ans. B,c,d
21. Accounts representing expenses will have ____________ balance.
Debit; Nil; Negative; Credit
Ans. Debit
22. Receipts and payments method of cash budget is useful for preparing long term
estimates.
a) true
b) false
Ans.
23. Match the following
1. Basic Standards (6) 1. Once established can never be altered
2. Current Standards (5) 2. Anticipated to be unachievable in future
3. Expected Standards (3) 3. Anticipated to be achieved in the budget period
4. Normal Standards (4) 4. Anticipated to be achieved in future
5. Established for a shorter period of time
6. Established for a longer period of time
24. If the customer is not likely to pay the amount receivable from him, this amount
should to be treated as __________________.
Bad debts; Long term debts; Accrued income; Current liability
Ans. Bad debts
25. Direct labour hour rate method of absorption of overheads is suitable where most of
the production is done by using machines.
a) true
b) false
Ans. B
26. Purchased goods by paying Rs.35,000/-: In this case, the cash account should be
debited.
a) true
b) false
Ans. A
27. Profit = Contribution per unit X ___________________________.
Sales (units); Production (units); Break even point (units); Margin of safety (units)
Ans. Margin of safety (units)
28. Choose all that apply
From the following, select current assets:-
a)____ Sundry debtors
b)____ Stock
c)____ Pre paid expenses
d)____ Goodwill
Ans. A,b,c
29. Choose all that apply
Select the transactions which can be entered in the Journal proper :-
a)____ Opening entries
b)____ Closing entries
c)____ Average entries
d)____ Rectification entries
Ans. A,b,d
30. Choose all that apply
Which of the following budgets may be termed as a long term budget?
a)____ Capital expenditure budget
b)____ Research and Development expenditure budget
c)____ Budget of a transportation company
d)____ Budget of a two-wheeler manufacturing company
Ans. A,b,c
31. Choose all that apply
Features of double entry accounting system are :-
a)____ Every business transaction has two elements
b)____ When business receives something, it has to pay something
c)____ Every entry is to be recorded twice
d)____ Every debit has a corresponding credit
Ans. A,b,d
32. Choose the correct answer.
M/s Vivek Enterprises has paid rent relating to the residence of Mr. Vivek, proprietor
of Vivek Enterprises. This payment should be treated as :-
a) Business expenditure
b) Capital expenditure
c) Drawings
d) Capital
Ans. C
33. One of the main objection to the contribution approach of costing is that it ignores
fixed cost.
a) true
b) false
Ans.
34. Financial Accounting discloses the financial performance & financial statements of
the business as a whole.
a) true
b) false
Ans. A
35. Financial statements can be presented in two forms i.e. profitability statement and
balance sheet.
a) true
b) false
Ans. A
36. Choose the correct answer.
A company has a normal capacity of 120 machines, working 8 hours per day of 25
days in a month. The fixed overheads are budgeted at Rs.144,000/- per month. The
standard time required to manufacture one unit of product is 4 hours. In April, 2004,
the company worked 24 days of 840 machine hours per day and produced 5,305 units
of output. The actual fixed overheads were Rs.142,000/-. Compute calendar variance.
a) Rs.6,360/- (Favourable)
b) Rs.17,280/- (Adverse)
c) Rs.5,760/- (Adverse)
d) Rs.16,680/- (Adverse)
Ans.
37. 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
Ans. C
38. Choose the correct answer.
Judge the given statement according to the given criteria :- Goods being real account,
when goods are lost by fire, the goods account should be debited because the goods
are not going out of the factory.
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
Ans. C
39. Financial, cost and management accounting are the three steams of accounting.
a) true
b) false
Ans. A
40. Choose the correct answer.
XYZ & Co. has taken a loan of Rs.100,000/- @ 15% p.a. on 1st October, 2003.
Interest is to be paid on half yearly basis. What treatment should be given in the
books of accounts of XYZ & Co. as on 31st March, 2004?
a) Since interest is not due on 31st March, 2004, no entry should be passed
b) Interest account should be debited with Rs.7,520.55 and outstanding interest
account should be credited with Rs.7,520.55
c) Interest account should be debited with Rs.15,000/- and outstanding interest
account should be credited with Rs.15,000/-
d) Since interest is due on 31st March, 2004, entry should be passed for its
payment
Ans. B
41. Choose all that apply
The factors to be considered while preparing the direct materials budget are :-
a)____ Adequacy of material storing space
b)____ Packing material lying in stores but reserved for specific purposes
c)____ Availability of funds
d)____ Material in stores but reserved for specific purposes
Ans. A,c,d
42. Choose the correct answer.
The integrated form of all functional budgets is known as :-
a) Budget manual
b) Operating budget
c) Master budget
d) Budgeted Balance Sheet
Ans. C
43. The phrase 'By Balance c/d.' written on the credit side of the rent account, indicates
credit balance for this account.
a) true
b) false
Ans. B
44. Graphically, fixed cost line will be __________________ the 'x-axis'.
Intersecting; Tangential to; Perpendicular to; Parallel to
Ans. Parallel to
45. Choose the correct answer.
It is difficult to apply Uniform costing system for an industry which has labour
intensive companies as well as capital intensive companies, because :-
a) The cost structure is the same
b) The cost structure is different
c) The quality is the same
d) The quality is different
Ans. B
46. Management Accounting is the process of analysis and interpretation of financial data
collected with help of financial accounting and cost accounting
a) true
b) false
Ans. A
47. Revenue expenditure indicates the amount of funds spent during a certain period with
the intention to receive the returns in future.
a) true
b) false
Ans. B
48. Purchase day book for the month of April was under cast by Rs.1000/- ____________
account should be credited.
Cash; Purchase; Suspense; Sales
Ans. Suspense
49. Choose all that apply
Features of material usage variance are :-
a)____ Measures the difference between the quantity of materials actually used
and that should have been used.
b)____ Measures the difference between the quantity of materials actually
purchased and that should have been purchased.
c)____ Considers standard price X actual quantity
d)____ Considers standard price X standard quantity
Ans. A,c,d
50. Choose the correct answer.
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?
a) 0.5
b) 0.666
c) 0.333
d) 0.25
Ans.
51. P&L statement which is a period statement & relates to a certain period tells about
results of operations.
a) true
b) false
Ans. A
52. Choose the correct answer.
A company wishes to earn a 15% profit margin on selling price when quoting for a
job. Which of the following is the profit margin of cost which will achieve the
required profit margin?
a) 0.15
b) 0.1765
c) 0.155
d) 0.1304
Ans.
53. Cost Accounting is concerned with calculation of the profitability and state of affairs
of the organization as a whole.
a) true
b) false
Ans. B
54. Financial accounting may deal with the ascertainment of cost & calculation of
profitability of the individual product.
a) true
b) false
Ans. B
55. Management Accounting aims at enabling the management to take the decisions
about the future. It may consider future data as well as non-financial factors.
a) true
b) false
Ans. A
Showing posts with label Management Accounting (Set 5). Show all posts
Showing posts with label Management Accounting (Set 5). Show all posts
Management Accounting - A15
MANAGEMENT ACCOUNTING ASSIGNMENT QUESTIONS
1. Choose all that apply.
Subsidiary books include:-
a)____ Cash Book
b)____ Purchase Register
c)____ Sales Register
d)____ Pass Book
Ans. A,b,c
2. 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
Ans. B
3. An item of cost that is direct for one business organization may be indirect for another
business organization.
a) true
b) false
Ans. A
4. Choose the correct answer.
Annual maintenance of Rs.28,000/- was paid on 15th June, 2003 for a period of one
year therefrom. Find the amount of prepaid maintenance expenditure for the year
ended 31st March.
a) Rs.28,000/-
b) Rs.22,167/-
c) Rs.7,000/-
d) Rs.5,833/-
Ans. D
5. If the total manufacturing overhead of a tiles producing factory amounted to Rs.15
lakhs and the overhead rate was Rs.5/- per sq.ft, then the production for the period can
be stated as _____________ sq.ft. tiles.
100000;200000;300000;400000
Ans. 300000
6. A fixed budget is useful only when the actual level of activity corresponds to the
budgeted level of activity.
a) true
b) false
Ans. A
7. Match the following:
1. Spirit of mutual trust (2) 1. Scope of uniform costing
2. Avoids cut throat competition (3) 2. Requisite for uniform costing
3. Treatment given to research (5) 3. Advantage of uniform costing
and development costs
4. Advantageously applicable in (1) 4. Process of uniform costing
similar industries
5. Fields covered by uniform costing
6. Disadvantage of uniform costing
8. Bank reconciliation statement is a systematic presentation of errors made by the
accountant.
a) true
b) false
Ans. B
9. If the ordering cost _____________s, then the economic order quantity will Increase.
Become NIL;Decrease;Remain constant;Increase
Ans. Increase
10. Choose the correct answer.
Alpha Bros. manufactures and sells four products-A, B, C and D. The sales mix in
value comprises 33-1/3%, 41-2/3%, 16-2/3% and 8-1/3%, respectively, out of the
total sales of Rs.60,000/-. Operating costs are 60%, 68%, 80% and 40%, respectively
of the selling price. Fixed costs are Rs.14,700/- per month. You are required to find
out the break even point for the products on an overall basis for Alpha Bros.
a) Rs.42,000/-
b) Rs.24,000/-
c) Rs.60,000/-
d) Rs.56,000/-
Ans.
11. 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
Ans. A,b,d
12. Choose the correct answer.
The capacity utilized to installed capacity ratio is 80% for the company. The capacity
utilization ratio in respect of a machine for a particular month is 90%. The available
working hours in a month are 200 hours. The break of idle time is as follows :
Waiting for job - 5 hours, breakdown - 4 hours and waiting for tools - 3 hours.
Calculate the idle time cost when the hourly fixed cost of running the machine is
Rs.8/-.
a) Rs.72/-
b) Rs.56/-
c) Rs.88/-
d) Rs.96/-
12Ans. D
13. The _______________ adjustment is necessary to reflect the cost for the use of fixed
asset during the year.
Price;Depreciation;Cost;Closing
Ans. Depreciation
14. 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
Ans. B,c,d
15. 1) Financial statements are basically in two forms i.e. profitability statement and
balance sheet.
a) true
b) false
Ans. A
16. Education facility to workers and their children, pension, superannuation fund are
examples of __________________ incentives.
Monetary;Non-monetary;Motivational;Compulsory
Ans. Non-monetary
17. In calculation of total sales margin variance, the _____________ cost of sales is
deducted from the actual sales revenue.
Actual;Planned;Scheduled;Standard
Ans. Standard
18. Choose the correct answer.
Which of the following aspects is ignored by financial accounting?
a) Sales tax
b) Income tax
c) Incentives and salary of employees
d) Efficiency and loyalty of employees
Ans. D
19. GAIL having monopoly in the CNG (Compressed Natural Gas) market can
implement the Uniform costing system.
a) true
b) false
Ans. B
20. Choose all that apply.
Identify the budgets for which the production manager should be held responsible :-
a)____ Materials budget
b)____ Production budget
c)____ Production overheads budget
d)____ Plant utilization budget
Ans. B,c,d
21. Choose the correct answer.
The following data is available for a company for the month of April, 2004 : Territory
I : selling expenses Rs.7,600/-; distribution cost Rs.4,000/-; number of units sold –
16,000; sales Rs.76,000/-. Territory II : selling expenses Rs.4,200/-; distribution cost
Rs.1,800/-; number of units sold -6,000; sales Rs.28,000/-. Territory III : selling
expenses Rs.6,240/-; distribution cost Rs.2,000/-; number of units sold -10,000; sales
Rs.52,000/-. The company adopts sales basis and quantity basis for application of
selling and distribution costs respectively. Compute the amount of selling and
distribution costs chargeable to a consignment of 4,000 units of a product sold in each
territory at Rs.2.50 per unit.
a) Territory I -Rs.2,000/-; Territory II -Rs.2,000/- and Territory III -Rs.2,000/-
b) Territory I -Rs.2,700/-; Territory II -Rs.2,700/- and Territory III -Rs.2,700/-
c) Territory I -Rs.2,700/-; Territory II -Rs.2,700/- and Territory III -Rs.2,000/-
d) Territory I -Rs.2,000/-; Territory II -Rs.2,700/- and Territory III -Rs.2,000/-
Ans. D
22. Direct labour hour rate method of absorption of overheads is suitable where most of
the production is done by using machines.
a) true
b) false
Ans. B
23. Choose the correct answer.
Which document facilitates estimating material cost of a particular job, before
completion of that job?
a) Bill of exchange
b) Bill of material
c) Material requisition note
d) Purchase order
Ans. B
24. Choose all that apply.
The management of Horngreen Ltd. is deciding whether to continue working at loss
or to temporarily shut down the factory. State the qualitative aspects that must be
considered before arriving at a decision :-
a)____ Loss of trained personnel
b)____ Loss of regular customers
c)____ Expenditure required to restart the factory
d)____ Expenditure relating to expanding the business
Ans. A,b,c
25. In differential cost analysis, decisions are taken by comparing the incremental
revenue with differential costs.
a) true
b) false
Ans. A
26. Choose the correct answer.
If the annual labour turnover rate as per the flux method is 19.25%, what is equivalent
monthly rate?
a) 0.1925
b) 0.0963
c) 0.0321
d) 0.0161
Ans. D
27. Choose the correct answer.
A firm of boiler-house engineers provides engineering services to large number of
factories having boiler houses. The firm charges on the basis of number of hours its
engineers have worked for the client. Each engineer works for eight hours on each
working day. Each engineer enjoys Saturday and Sunday as holiday. In addition he is
granted a total of 21 more paid holidays in a year. An engineer's annual remuneration
comprises (for the year 2003) : basic pay Rs.2,00,000/-, house rent allowance 30%,
dearness allowance 20% and other allowances 15%. Employer also contributes 10%
of basic pay towards provident fund, which is taken as part of the salary. Calculate the
rate of charge(on total cost basis) for an hour's work done by the engineer for the
client.
a) Rs.182.29
b) Rs.182.00
c) Rs.183.29
d) Rs.183.00
Ans.
28. Financial Accounting discloses the financial performance & financial statements of
the business as a whole.
a) true
b) false
28Ans. A
29. According to Reducing Balance Method, the depreciation is provided at a
predetermined percentage on the balance of cost of asset after deduction of the
depreciation previously charged.
a) true
b) false
Ans. A
30. Absorption costing is more suitable for decision making than marginal costing.
a) true
b) false
Ans. B
31. Choose all that apply.
International Motors manufactures crankshafts for jeeps and trucks. They have
furnished the following particulars for the quarter ended 31st March : Materials
Rs.298,000/-; direct wages Rs.42,000/-; store expenses Rs.20,000/-; machinery
maintenance Rs.4,600/-; depreciation Rs.22,300/-; staff welfare Rs.12,000/-; general
expenses Rs.30,000/-; administration and selling expenses Rs.27,000/-. Additional
information provided by them : Production 300 numbers of jeep and 400 trucks;
material cost ratio per vehicle between jeep and truck is 1 : 2. Direct labour ratio per
vehicle for jeep and truck is 2 : 3. Machine hour ratio per vehicle for jeep and truck is
1 : 2. Select the statements which are true and correct.
a)____ Cost per crankshaft for jeep is Rs.445.45
b)____ Cost per crankshaft for truck is Rs.805.66
c)____ Cost per crankshaft for truck is Rs.1,139.75
d)____ General expenses should be apportioned on direct labour ratio
Ans. A,b,d
32. Choose all that apply.
The data for two materials P and Q is given below : Material P : opening stock
Rs.80,000/-; closing stock Rs.40,000/- and purchases Rs.500,000/-. Material Q :
opening stock Rs.170,000/-; closing stock Rs.60,000/- and purchases Rs.750,000/-.
Identify which of the given statements relevant to the data given are correct?
a)____ Inventory turnover period for material P is 40.5 days
b)____ Material P is faster moving material
c)____ Material Q is faster moving material
d)____ Consumption of material Q is Rs.860,000/-
Ans.
33. Management Accounting is the process of analysis and interpretation of financial data
collected with help of financial accounting and cost accounting
a) true
b) false
Ans. A
34. Match the following:
1. Cost Centre (3) 1. Indirect cost
2. Cost Control (4) 2. Historical Cost
3. Differential Cost (6) 3. Facilitate the fixation of responsibility
4. Sunk Cost (2) 4. Process of controlling costs of operations
5. Penalty paid
6. Increase or Decrease in cost
35. _________________ is any documentary evidence to justify that a particular
transaction has taken place.
Counter file;Payment Advice;Voucher;Invoice
Ans. Voucher
36. Factory light, telephone expenses are examples of ______________ expenses.
Selling;Direct;Indirect;Distribution
Ans. Indirect
37. Choose all that apply.
Inventory holding cost comprises of :-
a)____ Cost of insurance
b)____ Rent of store house
c)____ Cost of material
d)____ Salary of store keeper
Ans. A,b,d
38. In the scheme of cost- _____________-profit analysis, an attempt is made to measure
the variations of cost with Volume.
Selling price;Selling costs;Volume;Contribution
Ans. Volume
39. In case of seasonal industry, the budget period may be taken as _______________.
10 years;5 years;One season;One month
Ans. One season
40. The balance sheet has three columns, viz. assets, liabilities and ledger folio.
a) true
b) false
Ans. B
41. Choose the correct answer.
If debtors in the trial balance are of Rs.23,000/-. Provision for doubtful debts is to be
made @ 5% and discount on sundry debtors is to be provided @ 2%. Calculate the
total amount which should be debited to profit and loss account.
a) Rs.1,193/-
b) Rs.1,193.70
c) Rs.1,196/-
d) Rs.1,196.70
41Ans. B
42. If overhead absorbed i.e. overheads charged to units during the period is more than
the overhead incurred, it is said that the overheads are ___________________.
Over-absorbed;Equal to the actual;True and fair;Under-absorbed
Ans. Over-absorbed
43. Choose all that apply.
These are the replacement costs of labour turnover :-
a)____ Cost of personnel administration
b)____ Inefficiency of new workers
c)____ Cost of selection and placement
d)____ Increased spoilage and defectives
Ans. B,c,d
44. Choose the correct answer.
Which of the following is a valid classification of the salary paid to the foreman in
charge of the packing department?
a) Indirect departmental cost
b) Direct departmental cost
c) Direct product cost
d) Service department cost
Ans. C
45. 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
Ans. A,b,c
46. 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
Ans. A,b,d
47. Choose the correct answer.
Following data has been extracted from the records of a manufacturing company
whose level of operations varies during different months. Minimum activity : 30,000
machine hours and manufacturing overheads Rs.400,000/-. Maximum activity :
80,000 machine hours and manufacturing overheads Rs.600,000/-. Determine the
fixed and variable components of manufacturing overheads.
a) Fixed overheads Rs.480,000/- and variable overheads Rs.4/- per machine hour
b) Fixed overheads Rs.480,000/- and variable overheads Rs.8/- per machine hour
c) Fixed overheads Rs.280,000/- and variable overheads Rs.8/- per machine hour
d) Fixed overheads Rs.280,000/- and variable overheads Rs.4/- per machine hour
Ans. D
48. Fundamentally, changes in price and changes in sales volume give rise to sales
variances.
a) true
b) false
Ans. A
49. Contribution represents pool of resources available for meeting all costs other than
_________________.
Historical costs;Variable costs;Sunk costs;Fixed costs
Ans. Variable costs
50. Choose all that apply.
Techniques of management accounting include:-
a)____ Marginal costing
b)____ Cost control
c)____ Budgetary control
d)____ Standard costing
Ans. A,c,d
1. Choose all that apply.
Subsidiary books include:-
a)____ Cash Book
b)____ Purchase Register
c)____ Sales Register
d)____ Pass Book
Ans. A,b,c
2. 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
Ans. B
3. An item of cost that is direct for one business organization may be indirect for another
business organization.
a) true
b) false
Ans. A
4. Choose the correct answer.
Annual maintenance of Rs.28,000/- was paid on 15th June, 2003 for a period of one
year therefrom. Find the amount of prepaid maintenance expenditure for the year
ended 31st March.
a) Rs.28,000/-
b) Rs.22,167/-
c) Rs.7,000/-
d) Rs.5,833/-
Ans. D
5. If the total manufacturing overhead of a tiles producing factory amounted to Rs.15
lakhs and the overhead rate was Rs.5/- per sq.ft, then the production for the period can
be stated as _____________ sq.ft. tiles.
100000;200000;300000;400000
Ans. 300000
6. A fixed budget is useful only when the actual level of activity corresponds to the
budgeted level of activity.
a) true
b) false
Ans. A
7. Match the following:
1. Spirit of mutual trust (2) 1. Scope of uniform costing
2. Avoids cut throat competition (3) 2. Requisite for uniform costing
3. Treatment given to research (5) 3. Advantage of uniform costing
and development costs
4. Advantageously applicable in (1) 4. Process of uniform costing
similar industries
5. Fields covered by uniform costing
6. Disadvantage of uniform costing
8. Bank reconciliation statement is a systematic presentation of errors made by the
accountant.
a) true
b) false
Ans. B
9. If the ordering cost _____________s, then the economic order quantity will Increase.
Become NIL;Decrease;Remain constant;Increase
Ans. Increase
10. Choose the correct answer.
Alpha Bros. manufactures and sells four products-A, B, C and D. The sales mix in
value comprises 33-1/3%, 41-2/3%, 16-2/3% and 8-1/3%, respectively, out of the
total sales of Rs.60,000/-. Operating costs are 60%, 68%, 80% and 40%, respectively
of the selling price. Fixed costs are Rs.14,700/- per month. You are required to find
out the break even point for the products on an overall basis for Alpha Bros.
a) Rs.42,000/-
b) Rs.24,000/-
c) Rs.60,000/-
d) Rs.56,000/-
Ans.
11. 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
Ans. A,b,d
12. Choose the correct answer.
The capacity utilized to installed capacity ratio is 80% for the company. The capacity
utilization ratio in respect of a machine for a particular month is 90%. The available
working hours in a month are 200 hours. The break of idle time is as follows :
Waiting for job - 5 hours, breakdown - 4 hours and waiting for tools - 3 hours.
Calculate the idle time cost when the hourly fixed cost of running the machine is
Rs.8/-.
a) Rs.72/-
b) Rs.56/-
c) Rs.88/-
d) Rs.96/-
12Ans. D
13. The _______________ adjustment is necessary to reflect the cost for the use of fixed
asset during the year.
Price;Depreciation;Cost;Closing
Ans. Depreciation
14. 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
Ans. B,c,d
15. 1) Financial statements are basically in two forms i.e. profitability statement and
balance sheet.
a) true
b) false
Ans. A
16. Education facility to workers and their children, pension, superannuation fund are
examples of __________________ incentives.
Monetary;Non-monetary;Motivational;Compulsory
Ans. Non-monetary
17. In calculation of total sales margin variance, the _____________ cost of sales is
deducted from the actual sales revenue.
Actual;Planned;Scheduled;Standard
Ans. Standard
18. Choose the correct answer.
Which of the following aspects is ignored by financial accounting?
a) Sales tax
b) Income tax
c) Incentives and salary of employees
d) Efficiency and loyalty of employees
Ans. D
19. GAIL having monopoly in the CNG (Compressed Natural Gas) market can
implement the Uniform costing system.
a) true
b) false
Ans. B
20. Choose all that apply.
Identify the budgets for which the production manager should be held responsible :-
a)____ Materials budget
b)____ Production budget
c)____ Production overheads budget
d)____ Plant utilization budget
Ans. B,c,d
21. Choose the correct answer.
The following data is available for a company for the month of April, 2004 : Territory
I : selling expenses Rs.7,600/-; distribution cost Rs.4,000/-; number of units sold –
16,000; sales Rs.76,000/-. Territory II : selling expenses Rs.4,200/-; distribution cost
Rs.1,800/-; number of units sold -6,000; sales Rs.28,000/-. Territory III : selling
expenses Rs.6,240/-; distribution cost Rs.2,000/-; number of units sold -10,000; sales
Rs.52,000/-. The company adopts sales basis and quantity basis for application of
selling and distribution costs respectively. Compute the amount of selling and
distribution costs chargeable to a consignment of 4,000 units of a product sold in each
territory at Rs.2.50 per unit.
a) Territory I -Rs.2,000/-; Territory II -Rs.2,000/- and Territory III -Rs.2,000/-
b) Territory I -Rs.2,700/-; Territory II -Rs.2,700/- and Territory III -Rs.2,700/-
c) Territory I -Rs.2,700/-; Territory II -Rs.2,700/- and Territory III -Rs.2,000/-
d) Territory I -Rs.2,000/-; Territory II -Rs.2,700/- and Territory III -Rs.2,000/-
Ans. D
22. Direct labour hour rate method of absorption of overheads is suitable where most of
the production is done by using machines.
a) true
b) false
Ans. B
23. Choose the correct answer.
Which document facilitates estimating material cost of a particular job, before
completion of that job?
a) Bill of exchange
b) Bill of material
c) Material requisition note
d) Purchase order
Ans. B
24. Choose all that apply.
The management of Horngreen Ltd. is deciding whether to continue working at loss
or to temporarily shut down the factory. State the qualitative aspects that must be
considered before arriving at a decision :-
a)____ Loss of trained personnel
b)____ Loss of regular customers
c)____ Expenditure required to restart the factory
d)____ Expenditure relating to expanding the business
Ans. A,b,c
25. In differential cost analysis, decisions are taken by comparing the incremental
revenue with differential costs.
a) true
b) false
Ans. A
26. Choose the correct answer.
If the annual labour turnover rate as per the flux method is 19.25%, what is equivalent
monthly rate?
a) 0.1925
b) 0.0963
c) 0.0321
d) 0.0161
Ans. D
27. Choose the correct answer.
A firm of boiler-house engineers provides engineering services to large number of
factories having boiler houses. The firm charges on the basis of number of hours its
engineers have worked for the client. Each engineer works for eight hours on each
working day. Each engineer enjoys Saturday and Sunday as holiday. In addition he is
granted a total of 21 more paid holidays in a year. An engineer's annual remuneration
comprises (for the year 2003) : basic pay Rs.2,00,000/-, house rent allowance 30%,
dearness allowance 20% and other allowances 15%. Employer also contributes 10%
of basic pay towards provident fund, which is taken as part of the salary. Calculate the
rate of charge(on total cost basis) for an hour's work done by the engineer for the
client.
a) Rs.182.29
b) Rs.182.00
c) Rs.183.29
d) Rs.183.00
Ans.
28. Financial Accounting discloses the financial performance & financial statements of
the business as a whole.
a) true
b) false
28Ans. A
29. According to Reducing Balance Method, the depreciation is provided at a
predetermined percentage on the balance of cost of asset after deduction of the
depreciation previously charged.
a) true
b) false
Ans. A
30. Absorption costing is more suitable for decision making than marginal costing.
a) true
b) false
Ans. B
31. Choose all that apply.
International Motors manufactures crankshafts for jeeps and trucks. They have
furnished the following particulars for the quarter ended 31st March : Materials
Rs.298,000/-; direct wages Rs.42,000/-; store expenses Rs.20,000/-; machinery
maintenance Rs.4,600/-; depreciation Rs.22,300/-; staff welfare Rs.12,000/-; general
expenses Rs.30,000/-; administration and selling expenses Rs.27,000/-. Additional
information provided by them : Production 300 numbers of jeep and 400 trucks;
material cost ratio per vehicle between jeep and truck is 1 : 2. Direct labour ratio per
vehicle for jeep and truck is 2 : 3. Machine hour ratio per vehicle for jeep and truck is
1 : 2. Select the statements which are true and correct.
a)____ Cost per crankshaft for jeep is Rs.445.45
b)____ Cost per crankshaft for truck is Rs.805.66
c)____ Cost per crankshaft for truck is Rs.1,139.75
d)____ General expenses should be apportioned on direct labour ratio
Ans. A,b,d
32. Choose all that apply.
The data for two materials P and Q is given below : Material P : opening stock
Rs.80,000/-; closing stock Rs.40,000/- and purchases Rs.500,000/-. Material Q :
opening stock Rs.170,000/-; closing stock Rs.60,000/- and purchases Rs.750,000/-.
Identify which of the given statements relevant to the data given are correct?
a)____ Inventory turnover period for material P is 40.5 days
b)____ Material P is faster moving material
c)____ Material Q is faster moving material
d)____ Consumption of material Q is Rs.860,000/-
Ans.
33. Management Accounting is the process of analysis and interpretation of financial data
collected with help of financial accounting and cost accounting
a) true
b) false
Ans. A
34. Match the following:
1. Cost Centre (3) 1. Indirect cost
2. Cost Control (4) 2. Historical Cost
3. Differential Cost (6) 3. Facilitate the fixation of responsibility
4. Sunk Cost (2) 4. Process of controlling costs of operations
5. Penalty paid
6. Increase or Decrease in cost
35. _________________ is any documentary evidence to justify that a particular
transaction has taken place.
Counter file;Payment Advice;Voucher;Invoice
Ans. Voucher
36. Factory light, telephone expenses are examples of ______________ expenses.
Selling;Direct;Indirect;Distribution
Ans. Indirect
37. Choose all that apply.
Inventory holding cost comprises of :-
a)____ Cost of insurance
b)____ Rent of store house
c)____ Cost of material
d)____ Salary of store keeper
Ans. A,b,d
38. In the scheme of cost- _____________-profit analysis, an attempt is made to measure
the variations of cost with Volume.
Selling price;Selling costs;Volume;Contribution
Ans. Volume
39. In case of seasonal industry, the budget period may be taken as _______________.
10 years;5 years;One season;One month
Ans. One season
40. The balance sheet has three columns, viz. assets, liabilities and ledger folio.
a) true
b) false
Ans. B
41. Choose the correct answer.
If debtors in the trial balance are of Rs.23,000/-. Provision for doubtful debts is to be
made @ 5% and discount on sundry debtors is to be provided @ 2%. Calculate the
total amount which should be debited to profit and loss account.
a) Rs.1,193/-
b) Rs.1,193.70
c) Rs.1,196/-
d) Rs.1,196.70
41Ans. B
42. If overhead absorbed i.e. overheads charged to units during the period is more than
the overhead incurred, it is said that the overheads are ___________________.
Over-absorbed;Equal to the actual;True and fair;Under-absorbed
Ans. Over-absorbed
43. Choose all that apply.
These are the replacement costs of labour turnover :-
a)____ Cost of personnel administration
b)____ Inefficiency of new workers
c)____ Cost of selection and placement
d)____ Increased spoilage and defectives
Ans. B,c,d
44. Choose the correct answer.
Which of the following is a valid classification of the salary paid to the foreman in
charge of the packing department?
a) Indirect departmental cost
b) Direct departmental cost
c) Direct product cost
d) Service department cost
Ans. C
45. 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
Ans. A,b,c
46. 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
Ans. A,b,d
47. Choose the correct answer.
Following data has been extracted from the records of a manufacturing company
whose level of operations varies during different months. Minimum activity : 30,000
machine hours and manufacturing overheads Rs.400,000/-. Maximum activity :
80,000 machine hours and manufacturing overheads Rs.600,000/-. Determine the
fixed and variable components of manufacturing overheads.
a) Fixed overheads Rs.480,000/- and variable overheads Rs.4/- per machine hour
b) Fixed overheads Rs.480,000/- and variable overheads Rs.8/- per machine hour
c) Fixed overheads Rs.280,000/- and variable overheads Rs.8/- per machine hour
d) Fixed overheads Rs.280,000/- and variable overheads Rs.4/- per machine hour
Ans. D
48. Fundamentally, changes in price and changes in sales volume give rise to sales
variances.
a) true
b) false
Ans. A
49. Contribution represents pool of resources available for meeting all costs other than
_________________.
Historical costs;Variable costs;Sunk costs;Fixed costs
Ans. Variable costs
50. Choose all that apply.
Techniques of management accounting include:-
a)____ Marginal costing
b)____ Cost control
c)____ Budgetary control
d)____ Standard costing
Ans. A,c,d
Management Accounting - A14
MANAGEMENT ACCOUNTING ASSIGNMENT QUESTIONS
1. Narration must be mentioned in the ledger.
a) true
b) false
Ans. B
2. According to the standard costing principles, only adverse variance must be further
investigated.
a) true
b) false
Ans. B
3. Trading account is used to analyze how successfully and how efficiently the firm runs,
particularly with regards to the maintenance of the gross profit margin.
a) true
b) false
Ans. A
4. Choose all that apply.
Special aspects of co-partnership include:-
a)____ Workers are granted ownership rights
b)____ Indirect monetary remuneration
c)____ The morale of the workers is increased
d)____ The workers are rewarded for individual efficiency
Ans. A,b,c
5. Choose all that apply.
The key factor determines the :-
a)____ Level of activity
b)____ Capacity utilization
c)____ Level of sales
d)____ Capacity installation
Ans. A,b,c
6. The purchase account should be debited when an order is placed with the supplier of
material
a) true
b) false
Ans. B
7. Cost volume profit analysis focuses attention on the ______________effect of a
particular course of action.
Short and long run; Medium run; Short run; Long run
Ans. Short run
8. Choose the correct answer.
Quantify the increase in profit on account of following errors : (a) Repairs of furniture
amounting to Rs.2,000/- were debited to furniture account. Furniture is depreciated
@10% p.a. (b) Interest received on bank deposits was credited to dividend received
account, Rs.1,550/- (c) A television purchased for the managing director's office for
Rs.45,000/- was debited to Interior decoration expenses.
a) Rs.41,650/-
b) Rs.45,000/-
c) Rs.43,200/-
d) Rs.44,750/-
Ans. C
9. Choose the correct answer.
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?
a) Rs.150/-
b) Rs.170/-
c) Rs.190/-
d) Rs.200/-
Ans. C
10. Choose all that apply.
The main advantages of profit sharing are :-
a)____ Employees try to increase productivity
b)____ Incentives are shared by all the employees
c)____ Augments employees' efficiency
d)____ Incentives are shared by the management
Ans. A,b,c
11. Choose the correct answer.
SRR Ltd. producing a single product, sells it at Rs.50/- per unit. Unit variable cost is
Rs.35/- and fixed costs amounts to Rs.12,00,000/- per annum. Calculate the increase
in sales required if profits are to be increased by Rs.2.4 lakhs
a) Rs.880,000/-
b) Rs.800,000/-
c) Rs.600,000/-
d) Rs.660,000/-
Ans.
12. Choose the correct answer.
If the raw material prices are suffering from inflation, which of the following methods
of valuing stocks will give the lowest gross profit?
a) First-in-first-out
b) Last-in-first-out
c) Simple average
d) Standard cost
Ans.
13. Choose the correct answer.
Double entry system of accounting follows the principle of :-
a) Every debit has corresponding credit
b) Every asset has corresponding liability
c) Every expenditure has corresponding income
d) Every profit has corresponding loss
Ans. A
14. An error of partial omission can be rectified by either debiting or crediting the
________________ account, as the case maybe.
Adjusted profit and loss;Credit;Suspense;Profit and loss
Ans. Suspense
15. 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
Ans. A
16. Piece rate system is suitable when quality of goods produced is of extreme
importance.
a) true
b) false
Ans b
17. Match the following:
1. Spirit of mutual trust (2) 1. Scope of uniform costing
2. Avoids cut throat competition (6) 2. Requisite for uniform costing
3. Treatment given to research
and development costs (3) 3. Fields covered by uniform costing
4. Advantageously applicable
in similar industries (1) 4. Process of uniform costing
5. Disadvantage of uniform costing
6. Advantage of uniform
18. If the customer is not likely to pay the amount receivable from him, this amount
should to be treated as __________________.
Long term debts;Accrued income;Current liability;Bad debts
Ans. Bad debts
19. If the physical stock is less than the stock as per the stores ledger, such shortage
should be treated as an issue of material
a) true
b) false
Ans. A
20. Choose the correct answer.
Judge the given statement according to the given criteria :- Goods being real account,
when goods are lost by fire, the goods account should be debited because the goods
are not going out of the factory.
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
Ans. A
21. Choose the correct answer.
The store-keeper should initiate action for the purchase of a material, when it reaches
its :-
a) Maximum level
b) Minimum level
c) Average level
d) Re-order level
Ans. D
22. Choose all that apply.
From the following, select current assets:-
a)____ Sundry debtors
b)____ Stock
c)____ Pre paid expenses
d)____ Goodwill
Ans. A,b,c
23. If the total amount on the ______________-side of commission account is more than
the total of its credit side, the commission account is said to have a Debit balance
Credit;Deflated;Nil;Debit
Ans. Debit
24. A written order sent to inform the purchasing department of a need for materials is
called a ___________________.
Goods received note; Purchase order;
Material requisition note; Purchase requisition note
Ans. Purchase requisition note
25. The process of recording the business transactions in a defined set of records is
referred to as __________________.
Trading account;Profit and Loss Account;Balance sheet;Trial Balance
Ans. Balance sheet
26. Choose the correct answer.
In a factory Beduax Point Premium system is in operation. The following are the
particulars with regard to a job in a factory : allowed time for the job =600 B's; time
taken = 480 minutes (or B's); rate = Rs.12/- per hour. Calculate the amount of bonus.
a) Rs.114/-
b) Rs.96/-
c) Rs.104/-
d) Rs.106/-
Ans. A
27. Choose the correct answer.
As a part of the data presented in support of a proposal to increase the production of
clock radios, the sales manager of Wittman Electronics reported the total additional
cost required for the proposed increased production level. The increase in total cost is
known as :-
a) Controllable cost
b) Opportunity cost
c) Out-of-pocket cost
d) Incremental cost
Ans. D
28. Financial statements are basically in two forms i.e. profitability statement and
balance sheet.
a) true
b) false
Ans. A
29. Choose all that apply
Select the steps to be followed while preparing bank reconciliation statement :-
a)____ Compare the transactions in the bank book and the pass book
b)____ Check the totals and the balancing of both the books
c)____ Confirm that the opening balances of both the books are tallying
d)____ Confirm that the closing balances of both the books are tallying
Ans. A,b,c
30. Choose all that apply
The factors which influence the selection of the method for absorption of overheads
are:-
a)____ Type of industry
b)____ Nature of products
c)____ Manufacturing process
d)____ Demand for products
Ans.
31. Choose all that apply.
From the available information calculate sales value variance and budgeted sales
quantity of X. Actual sales of X -500 units; budgeted price per unit -Rs.12/-; actual
price per unit-Rs.15/- and sales volume variance -Rs.1,200/- (Favourable).
a)____ Budgeted sales - 400 units
b)____ Sales value variance -Rs.2,700/-
c)____ The sales value variance is adverse
d)____ The sales value variance is favourable
Ans. A,b,d
32. Goods returned by Pawan worth Rs.1,000/- is debited to Pawan's Account. In order to
rectify the mistake, ________________-account should be debited.
Miscellaneous;Pawan's;Suspense;Personal
Ans. Suspense
33. Bank reconciliation statement can be prepared on weekly basis.
a) true
b) false
Ans. A
34. Choose all that apply
Merits of break even point analysis are as follows:-
a)____ Useful diagnostic tool.
b)____ Used for analyzing the risk implication of alternative actions
c)____ Used to graphically represent complicated data.
d)____ Useful in the long run.
Ans. A,b,c
35. Choose all that apply
If you are required to enforce uniform costing system in your industry, how would
you proceed?
a)____ Collecting data from all units of your industry
b)____ Ensuring that the data collected is complete and correct
c)____ Maintaining secrecy of the data collected
d)____ Allowing free access to all the units to the collected data
Ans. A,b,c
36. A standard that is never altered, after being established, is known as ______________
standard.
Projected;Ideal;Attainable;Basic
Ans. Ideal
37. Choose the correct answer.
The main object of establishing the maximum stock level for material is :-
a) To ensure that inventory exceeds this limit
b) To ensure that inventory never exceeds this limit
c) To maintain safety stock to take care of emergencies
d) To avoid production stoppage due to lack of material
Ans. B
38. Choose all that apply.
For the given transaction find the wrong entry that has been passed in the books of
accounts, the correct entry that should have been passed and the rectification entry
required to rectify the mistake. "On 1st September, 2004 the total of the previous
month's wages was debited to 'Manufacturing Wages Account". During the previous
month, a new machine was installed, and the firm's own employees had spent time
thereon; the previous month's wages for all such employees amounted to :-
a)____ Manufacturing Wages A/c. . . Dr. Rs.14,100/- To Machinery A/c
Rs.14,100/-
b)____ Machinery A/c. . . Dr. Rs.14,100/- To Manufacturing Wages A/c
Rs.14,100/-
c)____ Machinery A/c . . . Dr. Rs.14,100/- To Cash A/c Rs.14,100/-
d)____ Rs.14,100/- To Cash A/c Rs.14,100/-
Ans.
39. Choose the correct answer.
Which of the following costs is most likely to have a cost behaviour pattern described
as a fixed cost upto an activity level of 1,000 units, with a variable cost there after
which decreases from 10 paisa to 8 paise per unit at 2,000 units?
a) Photocopying equipment with a fixed hire charge plus a reducing charge per
unit
b) Wages payment which is fixed for a minimum output quantity after which a
bonus per unit is paid which reduces when activity level exceeds 1,000 units
c) Royalty payment per unit which reduces after 2,000 units
d) Material cost 12 paise per unit for the first 1,000 units followed by 10 paise per
unit upto 2,000 units and 8 paise per unit thereafter.
Ans.
40. Absorption costing is more suitable for decision making than marginal costing
a) true
b) false
Ans. B
41. Primary distribution is effected on the basis of service rendered to the service
departments by the production departments.
a) true
b) false
Ans.
42. _____________-system of wage payment is a combination of Halsey system and
Gantt system.
Diemer;Barth premium;Halsey-Weir;Rowan premium
Ans. Diemer
43. Choose the correct answer.
As cost centers facilitate the control function, in many cases, they are termed as :-
a) Responsibility centers
b) Decision centers
c) Service centers
d) Accounting centers
Ans. A
44. Choose all that apply.
Purchased goods worth Rs.6,450/- on 10th March, 2004. However the goods were
delivered directly to the plant situated at Nagar and hence this transaction was not
recorded in the purchase book, which is maintained at the corporate office. Analyse
the impact of this transaction.
a)____ The purchases will increase by Rs.6,450/-
b)____ The closing stock will increase by Rs.6,450/-
c)____ The gross profit will increase by Rs.6,450/-
d)____ The gross profit will not be affected
Ans. C
45. Under the ______________-of wage payment the worker is paid on the basis of
production achieved irrespective of the time taken for its performancex
Merrick piece-rate system; Taylor's piece rate system;
Straight piece rate system; Differential time rate
Ans. Straight piece rate system
46. Choose the correct answer
A firm of boiler-house engineers provides engineering services to large number of
factories having boiler houses. The firm charges on the basis of number of hours its
engineers have worked for the client. Each engineer works for eight hours on each
working day. Each engineer enjoys Saturday and Sunday as holiday. In addition he is
granted a total of 21 more paid holidays in a year. An engineer's annual remuneration
comprises (for the year 2003) : basic pay Rs.2,00,000/-, house rent allowance 30%,
dearness allowance 20% and other allowances 15%. Employer also contributes 10%
of basic pay towards provident fund, which is taken as part of the salary. Calculate
the rate of charge(on total cost basis) for an hour's work done by the engineer for
the client.
a) Rs.182.29
b) Rs.182.00
c) Rs.183.29
d) Rs.183.00
46Ans.
47. Management Accounting is the process of analysis and interpretation of financial data
collected with help of financial accounting and cost accounting.
a) true
b) false
Ans. A
48. The concept of marginal costing is based on the important distinction between
product costs and _________costs.
Indirect; Direct; Variable; Period
Ans. Period
49. P&L statement which is a period statement & relates to a certain period tells about
results of operations.
a) true
b) false
Ans. A
50. Match the following:
1. Plan of investment in fixed assets (3) 1. Issue of shares
2. Plan for surplus/shortage of cash (6) 2. Cash Sales
3 Operating income (2) 3. Capital Expenditure Budget
4. Non-Operating income (1) 4. Income and expenditure budget
5. Revenue expenditure budget
6. Cash Budget
51. Financial Accounting discloses the financial performance & financial statements of
the business as a whole.
a)true
b)false
Ans. A
52. 1) Financial statements are basically in two forms i.e. profitability statement and balance sheet.
a)true
b)false
Ans. A
53. Choose the correct answer.
Following data has been extracted from the records of a manufacturing company
whose level of operations varies during different months. Minimum activity : 30,000
machine hours and manufacturing overheads Rs.400,000/-. Maximum activity :
80,000 machine hours and manufacturing overheads Rs.600,000/-. Determine the
fixed and variable components of manufacturing overheads.
a) Fixed overheads Rs.480,000/- and variable overheads Rs.4/- per machine hour
b) Fixed overheads Rs.480,000/- and variable overheads Rs.8/- per machine hour
c) Fixed overheads Rs.280,000/- and variable overheads Rs.8/- per machine hour
d) Fixed overheads Rs.280,000/- and variable overheads Rs.4/- per machine hour
Ans.
54. Choose the correct answer.
Amit sold Goods to Atul for Rs. 50,000/- on cash & Rs. 50,000/- on credit basis.
Amit allowed 10% discount for on the spot transaction. What is the amount that
should be debited to the cash account?
a) Rs.50,000/-
b) Rs.45,000/-
c) Rs.40,000/-
d) Rs.55,000/-
Ans. B
55. Choose all that apply.
The objectives of Uniform costing system are as follows :-
a)____ To fix a common selling price for the industry as a whole
b)____ To compare efficiency of each unit against industry's overall performance
c)____ To compile reliable cost data for inter-firm comparison of costs
d)____ To fix a common selling price so as to maximize profits of each unit
Ans. A,b,c
1. Narration must be mentioned in the ledger.
a) true
b) false
Ans. B
2. According to the standard costing principles, only adverse variance must be further
investigated.
a) true
b) false
Ans. B
3. Trading account is used to analyze how successfully and how efficiently the firm runs,
particularly with regards to the maintenance of the gross profit margin.
a) true
b) false
Ans. A
4. Choose all that apply.
Special aspects of co-partnership include:-
a)____ Workers are granted ownership rights
b)____ Indirect monetary remuneration
c)____ The morale of the workers is increased
d)____ The workers are rewarded for individual efficiency
Ans. A,b,c
5. Choose all that apply.
The key factor determines the :-
a)____ Level of activity
b)____ Capacity utilization
c)____ Level of sales
d)____ Capacity installation
Ans. A,b,c
6. The purchase account should be debited when an order is placed with the supplier of
material
a) true
b) false
Ans. B
7. Cost volume profit analysis focuses attention on the ______________effect of a
particular course of action.
Short and long run; Medium run; Short run; Long run
Ans. Short run
8. Choose the correct answer.
Quantify the increase in profit on account of following errors : (a) Repairs of furniture
amounting to Rs.2,000/- were debited to furniture account. Furniture is depreciated
@10% p.a. (b) Interest received on bank deposits was credited to dividend received
account, Rs.1,550/- (c) A television purchased for the managing director's office for
Rs.45,000/- was debited to Interior decoration expenses.
a) Rs.41,650/-
b) Rs.45,000/-
c) Rs.43,200/-
d) Rs.44,750/-
Ans. C
9. Choose the correct answer.
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?
a) Rs.150/-
b) Rs.170/-
c) Rs.190/-
d) Rs.200/-
Ans. C
10. Choose all that apply.
The main advantages of profit sharing are :-
a)____ Employees try to increase productivity
b)____ Incentives are shared by all the employees
c)____ Augments employees' efficiency
d)____ Incentives are shared by the management
Ans. A,b,c
11. Choose the correct answer.
SRR Ltd. producing a single product, sells it at Rs.50/- per unit. Unit variable cost is
Rs.35/- and fixed costs amounts to Rs.12,00,000/- per annum. Calculate the increase
in sales required if profits are to be increased by Rs.2.4 lakhs
a) Rs.880,000/-
b) Rs.800,000/-
c) Rs.600,000/-
d) Rs.660,000/-
Ans.
12. Choose the correct answer.
If the raw material prices are suffering from inflation, which of the following methods
of valuing stocks will give the lowest gross profit?
a) First-in-first-out
b) Last-in-first-out
c) Simple average
d) Standard cost
Ans.
13. Choose the correct answer.
Double entry system of accounting follows the principle of :-
a) Every debit has corresponding credit
b) Every asset has corresponding liability
c) Every expenditure has corresponding income
d) Every profit has corresponding loss
Ans. A
14. An error of partial omission can be rectified by either debiting or crediting the
________________ account, as the case maybe.
Adjusted profit and loss;Credit;Suspense;Profit and loss
Ans. Suspense
15. 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
Ans. A
16. Piece rate system is suitable when quality of goods produced is of extreme
importance.
a) true
b) false
Ans b
17. Match the following:
1. Spirit of mutual trust (2) 1. Scope of uniform costing
2. Avoids cut throat competition (6) 2. Requisite for uniform costing
3. Treatment given to research
and development costs (3) 3. Fields covered by uniform costing
4. Advantageously applicable
in similar industries (1) 4. Process of uniform costing
5. Disadvantage of uniform costing
6. Advantage of uniform
18. If the customer is not likely to pay the amount receivable from him, this amount
should to be treated as __________________.
Long term debts;Accrued income;Current liability;Bad debts
Ans. Bad debts
19. If the physical stock is less than the stock as per the stores ledger, such shortage
should be treated as an issue of material
a) true
b) false
Ans. A
20. Choose the correct answer.
Judge the given statement according to the given criteria :- Goods being real account,
when goods are lost by fire, the goods account should be debited because the goods
are not going out of the factory.
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
Ans. A
21. Choose the correct answer.
The store-keeper should initiate action for the purchase of a material, when it reaches
its :-
a) Maximum level
b) Minimum level
c) Average level
d) Re-order level
Ans. D
22. Choose all that apply.
From the following, select current assets:-
a)____ Sundry debtors
b)____ Stock
c)____ Pre paid expenses
d)____ Goodwill
Ans. A,b,c
23. If the total amount on the ______________-side of commission account is more than
the total of its credit side, the commission account is said to have a Debit balance
Credit;Deflated;Nil;Debit
Ans. Debit
24. A written order sent to inform the purchasing department of a need for materials is
called a ___________________.
Goods received note; Purchase order;
Material requisition note; Purchase requisition note
Ans. Purchase requisition note
25. The process of recording the business transactions in a defined set of records is
referred to as __________________.
Trading account;Profit and Loss Account;Balance sheet;Trial Balance
Ans. Balance sheet
26. Choose the correct answer.
In a factory Beduax Point Premium system is in operation. The following are the
particulars with regard to a job in a factory : allowed time for the job =600 B's; time
taken = 480 minutes (or B's); rate = Rs.12/- per hour. Calculate the amount of bonus.
a) Rs.114/-
b) Rs.96/-
c) Rs.104/-
d) Rs.106/-
Ans. A
27. Choose the correct answer.
As a part of the data presented in support of a proposal to increase the production of
clock radios, the sales manager of Wittman Electronics reported the total additional
cost required for the proposed increased production level. The increase in total cost is
known as :-
a) Controllable cost
b) Opportunity cost
c) Out-of-pocket cost
d) Incremental cost
Ans. D
28. Financial statements are basically in two forms i.e. profitability statement and
balance sheet.
a) true
b) false
Ans. A
29. Choose all that apply
Select the steps to be followed while preparing bank reconciliation statement :-
a)____ Compare the transactions in the bank book and the pass book
b)____ Check the totals and the balancing of both the books
c)____ Confirm that the opening balances of both the books are tallying
d)____ Confirm that the closing balances of both the books are tallying
Ans. A,b,c
30. Choose all that apply
The factors which influence the selection of the method for absorption of overheads
are:-
a)____ Type of industry
b)____ Nature of products
c)____ Manufacturing process
d)____ Demand for products
Ans.
31. Choose all that apply.
From the available information calculate sales value variance and budgeted sales
quantity of X. Actual sales of X -500 units; budgeted price per unit -Rs.12/-; actual
price per unit-Rs.15/- and sales volume variance -Rs.1,200/- (Favourable).
a)____ Budgeted sales - 400 units
b)____ Sales value variance -Rs.2,700/-
c)____ The sales value variance is adverse
d)____ The sales value variance is favourable
Ans. A,b,d
32. Goods returned by Pawan worth Rs.1,000/- is debited to Pawan's Account. In order to
rectify the mistake, ________________-account should be debited.
Miscellaneous;Pawan's;Suspense;Personal
Ans. Suspense
33. Bank reconciliation statement can be prepared on weekly basis.
a) true
b) false
Ans. A
34. Choose all that apply
Merits of break even point analysis are as follows:-
a)____ Useful diagnostic tool.
b)____ Used for analyzing the risk implication of alternative actions
c)____ Used to graphically represent complicated data.
d)____ Useful in the long run.
Ans. A,b,c
35. Choose all that apply
If you are required to enforce uniform costing system in your industry, how would
you proceed?
a)____ Collecting data from all units of your industry
b)____ Ensuring that the data collected is complete and correct
c)____ Maintaining secrecy of the data collected
d)____ Allowing free access to all the units to the collected data
Ans. A,b,c
36. A standard that is never altered, after being established, is known as ______________
standard.
Projected;Ideal;Attainable;Basic
Ans. Ideal
37. Choose the correct answer.
The main object of establishing the maximum stock level for material is :-
a) To ensure that inventory exceeds this limit
b) To ensure that inventory never exceeds this limit
c) To maintain safety stock to take care of emergencies
d) To avoid production stoppage due to lack of material
Ans. B
38. Choose all that apply.
For the given transaction find the wrong entry that has been passed in the books of
accounts, the correct entry that should have been passed and the rectification entry
required to rectify the mistake. "On 1st September, 2004 the total of the previous
month's wages was debited to 'Manufacturing Wages Account". During the previous
month, a new machine was installed, and the firm's own employees had spent time
thereon; the previous month's wages for all such employees amounted to :-
a)____ Manufacturing Wages A/c. . . Dr. Rs.14,100/- To Machinery A/c
Rs.14,100/-
b)____ Machinery A/c. . . Dr. Rs.14,100/- To Manufacturing Wages A/c
Rs.14,100/-
c)____ Machinery A/c . . . Dr. Rs.14,100/- To Cash A/c Rs.14,100/-
d)____ Rs.14,100/- To Cash A/c Rs.14,100/-
Ans.
39. Choose the correct answer.
Which of the following costs is most likely to have a cost behaviour pattern described
as a fixed cost upto an activity level of 1,000 units, with a variable cost there after
which decreases from 10 paisa to 8 paise per unit at 2,000 units?
a) Photocopying equipment with a fixed hire charge plus a reducing charge per
unit
b) Wages payment which is fixed for a minimum output quantity after which a
bonus per unit is paid which reduces when activity level exceeds 1,000 units
c) Royalty payment per unit which reduces after 2,000 units
d) Material cost 12 paise per unit for the first 1,000 units followed by 10 paise per
unit upto 2,000 units and 8 paise per unit thereafter.
Ans.
40. Absorption costing is more suitable for decision making than marginal costing
a) true
b) false
Ans. B
41. Primary distribution is effected on the basis of service rendered to the service
departments by the production departments.
a) true
b) false
Ans.
42. _____________-system of wage payment is a combination of Halsey system and
Gantt system.
Diemer;Barth premium;Halsey-Weir;Rowan premium
Ans. Diemer
43. Choose the correct answer.
As cost centers facilitate the control function, in many cases, they are termed as :-
a) Responsibility centers
b) Decision centers
c) Service centers
d) Accounting centers
Ans. A
44. Choose all that apply.
Purchased goods worth Rs.6,450/- on 10th March, 2004. However the goods were
delivered directly to the plant situated at Nagar and hence this transaction was not
recorded in the purchase book, which is maintained at the corporate office. Analyse
the impact of this transaction.
a)____ The purchases will increase by Rs.6,450/-
b)____ The closing stock will increase by Rs.6,450/-
c)____ The gross profit will increase by Rs.6,450/-
d)____ The gross profit will not be affected
Ans. C
45. Under the ______________-of wage payment the worker is paid on the basis of
production achieved irrespective of the time taken for its performancex
Merrick piece-rate system; Taylor's piece rate system;
Straight piece rate system; Differential time rate
Ans. Straight piece rate system
46. Choose the correct answer
A firm of boiler-house engineers provides engineering services to large number of
factories having boiler houses. The firm charges on the basis of number of hours its
engineers have worked for the client. Each engineer works for eight hours on each
working day. Each engineer enjoys Saturday and Sunday as holiday. In addition he is
granted a total of 21 more paid holidays in a year. An engineer's annual remuneration
comprises (for the year 2003) : basic pay Rs.2,00,000/-, house rent allowance 30%,
dearness allowance 20% and other allowances 15%. Employer also contributes 10%
of basic pay towards provident fund, which is taken as part of the salary. Calculate
the rate of charge(on total cost basis) for an hour's work done by the engineer for
the client.
a) Rs.182.29
b) Rs.182.00
c) Rs.183.29
d) Rs.183.00
46Ans.
47. Management Accounting is the process of analysis and interpretation of financial data
collected with help of financial accounting and cost accounting.
a) true
b) false
Ans. A
48. The concept of marginal costing is based on the important distinction between
product costs and _________costs.
Indirect; Direct; Variable; Period
Ans. Period
49. P&L statement which is a period statement & relates to a certain period tells about
results of operations.
a) true
b) false
Ans. A
50. Match the following:
1. Plan of investment in fixed assets (3) 1. Issue of shares
2. Plan for surplus/shortage of cash (6) 2. Cash Sales
3 Operating income (2) 3. Capital Expenditure Budget
4. Non-Operating income (1) 4. Income and expenditure budget
5. Revenue expenditure budget
6. Cash Budget
51. Financial Accounting discloses the financial performance & financial statements of
the business as a whole.
a)true
b)false
Ans. A
52. 1) Financial statements are basically in two forms i.e. profitability statement and balance sheet.
a)true
b)false
Ans. A
53. Choose the correct answer.
Following data has been extracted from the records of a manufacturing company
whose level of operations varies during different months. Minimum activity : 30,000
machine hours and manufacturing overheads Rs.400,000/-. Maximum activity :
80,000 machine hours and manufacturing overheads Rs.600,000/-. Determine the
fixed and variable components of manufacturing overheads.
a) Fixed overheads Rs.480,000/- and variable overheads Rs.4/- per machine hour
b) Fixed overheads Rs.480,000/- and variable overheads Rs.8/- per machine hour
c) Fixed overheads Rs.280,000/- and variable overheads Rs.8/- per machine hour
d) Fixed overheads Rs.280,000/- and variable overheads Rs.4/- per machine hour
Ans.
54. Choose the correct answer.
Amit sold Goods to Atul for Rs. 50,000/- on cash & Rs. 50,000/- on credit basis.
Amit allowed 10% discount for on the spot transaction. What is the amount that
should be debited to the cash account?
a) Rs.50,000/-
b) Rs.45,000/-
c) Rs.40,000/-
d) Rs.55,000/-
Ans. B
55. Choose all that apply.
The objectives of Uniform costing system are as follows :-
a)____ To fix a common selling price for the industry as a whole
b)____ To compare efficiency of each unit against industry's overall performance
c)____ To compile reliable cost data for inter-firm comparison of costs
d)____ To fix a common selling price so as to maximize profits of each unit
Ans. A,b,c
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