Need to update Answers. (Help would be appreciated)
Where break even sales are Rs. 20000,fixed cost is Rs.10000and profit is Rs. 5000 then the margin of safety will be Rs.
10000
1500
15000
2000
Valuation of material uses the following methods
FIFO and LIFO
Average price method
Market price
Special price
Goods distributed as free samples transfer to debit side of trading A/C .
True / False
In Citizen Ltd., Division X is a profit centre which produces three products, A, B and C. The details are as follows : External market price per unit:-Product A- Rs.48/-, Product B- Rs.46/-, Product C-Rs.40/-. Maximum external sales(units):-Product A- 800, Product B-500, Product C-300. Variable cost per unit:-Product A- Rs.33/-, Product B- Rs.24/-, Product C-Rs.28/-.
A-800 units; B-500 units; C-300 units
A-800 units; B-250 units; C-200 units
A-400 units; B-500 units; C-300 units
A-400 units; B-800 units; C-300 units
XYZ Ltd. has set up the following standards for variable production overheads : standard hours per unit -3 hours; standard variable overhead per hour -Rs.10/-. The actual data for the month is as follows : actual variable overheads incurred Rs.620,000/-; actual output -20,000 units and actual hours worked- 54,000 hours. Find variable overheads cost variance.
Rs.20,000/- (Adverse)
Rs.20,000/- (Favourable)
Rs.60,000/- (Adverse)
Rs.60,000/- (Favourable
A firm is able to break even at 60% capacity with budgeted fixed cost of Rs.300,000/-, budgeted selling price Rs.20/- per unit and budgeted contribution Rs.6/- per unit. The firm can produce and sell at 90% capacity but it is estimated that in that case
Rs.88,500/-
Rs.75,000/-
Rs.82,500/-
Rs.72,500/-
The annual variable production overheads of a factory are Rs.70,000/-. The production manager anticipates that in the next year, the production efficiency will decrease by 4%. Find out budgeted production overheads for the next year.
Rs.72,800/-
Rs.78,200/-
Rs.72,916.67
Rs.79,216.67
XYZ & Co. is a partnership with X and Z as partners. The capital of X is Rs.58,000/- and that of Z is Rs.75,000/-. Interest on capital is charged @ 12% p.a. and interest on drawings is charged @ 5% p.a. The drawings of X totaled to Rs.15,000/- and that of Z totaled to Rs.12,000/-. The profit for the year after considering interest on capital and drawings is Rs.125,000/- and the profits are shared in the ratio of their capitals, i.e. 58 : 75. Find the balance of capital accounts after giving
X - Rs.118,721.28 and Z -Rs.153,888.72
X - Rs.120,221.28 And Z - Rs.155,088.72
X - Rs.119,471.28 And Z - Rs.154,488.72
X - Rs.135,448.28 And Z - Rs.138,511.72
Factory rent is a direct cost to the factory as a whole but indirect to the production departments.
True / False
The wages paid to a trainee who constructs wooden mould for concrete laying on a building contract should be defined as :
Direct labour cost
Indirect labour cost
Fixed labour cost
Non-controllable labour cost
The following information relating to material X and its standard use for production has been extracted from the standard cost card: Price of material X = Rs.5/- per litre; consumptiion of X = 10 litres per unti of product.Data relating to actual material purchases and production during the period: Purchases of X = 4,000 litres; price paid for X =Rs.6/- per unit; actual production = 500units. Calculate material usage variance.
Rs.1,000/- (Favourable)
Rs.4,000/- (Adverse)
Rs.5,000/- (Favourable)
Rs.3,000/- (Adverse)
The following particulars are extracted from the books of a company relating to commodity "A" for the half year ending 30th June, 2004. (a) Purchase of raw materials - Rs.1,32,000/- (b) Direct wages - Rs.1,10,000/- (c) Rent, rates and insurance - Rs.44,000/- (d) Carriage inwards - Rs.1,584/- (e) Raw material as on 1st Jan, 2004 - Rs.22,000/- (f) Finished goods as on 1st Jan, 2004 - Rs.17,000/- (1600 tonnes) (g) Raw Material as on 30th June, 2004 - Rs.24,464/- (h) Finished goods as on 30th June,
Rs.64,800/-
Rs.46,800/-
Rs.86,400/-
Rs.68,400/-
Annual maintenance of Rs.28,000/- was paid on 15th June, 2003 for a period of one year therefrom. Find the amount of prepaid maitenance expenditure for the year ended 31st March.
Rs.28,000/-
Rs.22,167/-
Rs.7,000/-
Rs.5,833/
The Balance Sheet method of cash budget ignores any excess or shortage of cash during the budget period.
True / False
Compound journal entry avoids duplication of effort.
True / False
Metal India Ltd. is holding two accounts, savings and current, with the Central Bank of India. On 31st January, 2004 his ledger shows the following balances : Savings account Rs.5,000/-; Current accountRs.2,250/- (overdraft). It is found that a deposit of Rs.1,500/- made into the savings account on 20th January, 2004 has been entered in the ledger in the of Current account. Find the correct ledger balances of savings and current accounts.
Savings account-Rs.5,000/-, current account-Rs.3,750/- (overdraft
Savings account-Rs.5,000/-, current account-Rs.2,250/- (overdraft)
Savings account-Rs.6,500/-, current account-Rs.2,250/- (overdraft)
Savings account-Rs.6,500/-, current account-Rs.3,750/- (overdraft)
Which of the following source documetns in a cost accounting system is designed to exercise control voer the delivery of and accurate recording of the receipts of goods?
Goods received note
Order to the supplier
Material requisition note
Purchase requisition slip
Select the cases where convention of conservation is applied :
Closing stock is valued at cost or market price whichever is lower
Providing for discount on debtors
Amorisation of goodwill (goodwill being written off to Profit and Loss Account)
Providing for discount on creditors
M Ltd. manufactures three products P, Q and R. The unit selling price of these products are Rs.100/-, Rs.80/- and Rs.50/-, respectively. The corresponding unit variable costs are Rs.50/-, Rs.40/- and Rs.20/-, respectively. The quantitywise proportion in which these products are manufactured and sold are 20%, 30% and 50%, respectively. The total fixed costs are Rs.14,80,000/-. You are required to work out the overall break even point qunatity for
30,000 units
90,000 units
40,000 units
80,000 units
A firm is earning a profit of Rs.60,000/- at the present sales level of Rs.500,000/-. It has a profit volume ration of 60%, which remains unchanged. Fixed cost increases by 25% as soon as sales become twice the break even point. Find the profit for sal
Rs.240,000/-
Rs.180,000/-
Rs.120,000/-
Rs.200,000/-
At a break even point of 400 units, the variable costs are Rs.400/- and the fixed costs are Rs.200/-. What will the 401st unit sold contribute to profit?
Re.0
Re.0.50
Re.1.00
Rs.1.50
1. Advantage of budgetary control system 1. Motivates the managers to exceed the budgeted targets
2. Fixed budget 2. Managerial tool which decreases effectiveness of managerial control
3. Disadvantage of budgetary control system 3. More elastic and practical
4. Flexible budget 4. Difficult to implement in fast changing industrial scenario
5. Restricts the efforts of the managers to the budgeted targets
6. Managerial tool which increases effectiveness of managerial control
With the help of the given information, find actual fixed overheads for actual output. Fixed overheads volume variance -Rs.75,000/- (Favourable); fixed overheads efficiency variance -Rs.95,000/- (Favourable); fixed overheads calendar variance Rs.20,000/- (Adverse); fixed voerheads expenditure variance Rs.100,000/- (Adverse) and standard fixed overheads for actual output -Rs.575,000/-.
Rs.600,000/-
Rs.550,000/-
Rs.525,000/-
Rs.625,000/-
Existing sales are Rs.100,000/- (500 units), variable costs are Rs.60,000/-, fixed costs are Rs.24,000/-. If selling price is reduced by 10% which of the following is the breakeven sales quantity?
450 units
500 units
400 units
334 units
An operator engaged in machining certain components receives andordinary day rate of Rs.160/- per day of 8 hours. The standard output for machining the components has been fixed at 80 pieces per hour (time fixed for premium bonus). On a certain day, the output of the worker on this machine is 800 pieces. Find the labour cost per 100 pieces if a bonus of Rs.25/- is paid per 100 pieces of the extra output.
Rs.25/-
Rs.20/-
Rs.15/-
Rs.10/-
Under the accelerating premium system incentive increases at a fast rate with the decrease in output.
True /False
A manufacturer is producing alloy for which standard mix is 25% copper and 75% iron. Standard price for copper is Rs.80/- per kg. and for iron Rs.20/- per kg. 20% of input is standard loss. Actual output is 8,000 kg. of alloy using 2,000 kg of copper at Rs.90/- per kg. and 9,000 kg of iron at Rs.15/- per kg. Calculate the standard cost of copper.
Rs.200,000/-
Rs.150,000/-
Rs.350,000/-
Rs.180,000/-
Sold goods to Amitabh worth Rs. 15,000/- against 15% trade discount. In this case with what amount should the sales account be credited?
Rs. 15,000
Rs. 12,750
Rs. 13,500
Rs. 13,750
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.
Material cost variance -Rs.400/- (Adverse)
Material usage variance -Rs.750/-
Material usage variance is favourable
Material usage variance is adverse
Insurance premium of Rs.18,000/- was paid on 15th January, 2004. The policy period is one year from the date of payment of insurance. On 31st March, 2004 what amount should be debited to the Profit and Loss account as expenditure on account of insurance premium?
Rs.18,000/-
Rs.14,250/-
Rs.10,500/-
Rs.3,750/-
The standard cost of actual hours when any employee remains idle due to abnormal circumstances is known as Standard labour cost / Idle time variance / Labour cost variance / Standard cost.
Keeping company's liquid position sufficiently sound to meet its daily obligation is the main object of preparing Cash Sales / Income / Expenditure / budget.
One of the major drawback of the contribution approach to costing is that it ignores fixed cost.
True / False
Salary given in trial balance Rs. 5000/-, and Rs. 2,000/- is yet to be paid . The outstanding salary account will be disclosed in the …
Profit and Loss Account - credit side
Balance Sheet - liability side
Balance Sheet - asset side
Trading Account - debit side
A withdrawal of Rs.500/- from Mr.Jone's account on 2nd October, 2004 has been entered by the bank in the pass book of Mr.Johny's account.' If you are preparing the bank reconciliation statement considering the balance as per pass book as on 31st October,2004 is Rs.2,250/- for Mr.Johny, find out the balance as per his bank book.
Rs.1,750/- (overdraft)
Rs.1,750/- (debit)
Rs.2,250/- (overdraft)
Rs.2,250/- (debit)
What will be the impact of following transactions on the cost of a lathe machine : (a) Transport charges on the lathe machine were debited to Carriage inward account, Rs.1,100/- (b) Cost of installing the machine stands debited to miscellaneous expenses account, Rs.200/-
Cost will increase by Rs.900/-
Cost will increase by Rs.1,300/-
Cost will decrease by Rs.1,300/-
Cost will decrease by Rs.900/-
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.
X - Rs.5.316, Y - Rs.5.952 and Z - Rs.3.936
X - Rs.5.952, Y - Rs.3.936 and Z - Rs.5.316
X - Rs.5.952, Y - Rs.5.316 and Z - Rs.3.936
X - Rs.5.316, Y - Rs.3.936 and Z - Rs.5.952
From the given information compute the total cost variance. Material cost variance -Rs.4,400/- (Favourable); labour cost variance -Rs.450/- (Adverse); fixed overhead cost variance -Rs.22,000/- (Adverse); variable overhead cost variance -Rs.6,000/- (adverse).
Rs.32,850/- (Adverse)
Rs.32,850/- (Favourable)
Rs.24,050/- (Adverse)
Rs.24,050/- (Favourable)
Judge the given statement according to the given criteria :- 'Provision for doubtful debts account' and 'provision for discount on debtors account' mean same account can be maintained under two account-heads, since both are related to debtors and indicate a loss to the organization.
The statement and the reason both are correct
The statement and the reason both are incorrect
The statement is correct but the reason is incorrect
The statement is incorrect but the reason is correct
1. Ordering cost 1. Cost of holding the inventory
2. Carrying cost 2. Cost of issuing the inventory
3. Material cost 3. Cost of administrative efforts
4. Cost of material consumed 4. Can be obtained subtracting opening stock from the sum of material cost and closing stock
5. Can be obtained subtracting closing stock from the sum of material cost and opening stock
6. Sum of possession cost, ordering cost and purchase cost
The pass book showed a credit balance of Rs.1,000/-. This balance was after considering the dividend of Rs.25/- collected by bank and Rs.5/- charged as collection expenses: these entries are not made in the bank book. Find the balance as per bank book.
Rs.1,000/-
Rs.1,030/-
Rs.1,020/-
Rs.980/-
Compute fixed overheads calendar variance when fixed overhead volume variance is Rs.250/- (Favourable); fixed overheads efficiency variance is Rs.2,150/- (Adverse) and fixed overheads capacity variance is Rs.800/-(Favourable).
Rs.1,100/- (Adverse)
Rs.1,100/- (Favourable)
Rs.1,600/- (Adverse)
Rs.1,600/- (Favourable)
Routing the purchase requisition through the purchase department entails unnecessary delay in receiving the required materials.
True /False
Large angle of incidence indicates Lower /Adjusted /Higher /Same amount of profits.
The method of overhead apportionment which considers both the material cost as well as the labour cost, is known as Supplementary rate /Prime cost percentage rate /Direct labour hour rate /Machine hour rate method.
Standard labour cost of producing 500 metre of cloth has been specified as 20 hours work by skilled workers @ Rs.15/- per hour and 30 hours work by unskilled workers @ Rs.10/- per hour. For producing 500 metre cloth they worked for 30 hours each they were paid at the rate of Rs.17/- per hour and Rs.10/- per hour, respectively. Calculate labour mix variance.
Rs.210/- (Adverse)
Rs.60/- (Adverse)
Rs.150/- (Adverse)
Rs.30/- (Adverse)
In a factory Ram and Shyam produce the same product using the same input of same material and at the same normal wage rate. Bonus is paid to both of them in the form of normal time wage rate adjusted by the proportion which time save bears to the standard time for the completion of the product. The time allotted to the product is fifty hours. Ram takes thirty hours and Shyam takes forty hours to produce the product. The factory cost of the product for Ram is Rs.3,100/- and for Shyam is Rs.3,280/-. The factory overhead rate is Rs.12/- per hour. Calculate the cost of material used for the product, for each worker, Ram and Shyam.
Rs.3,000/-
Rs.2,000/-
Rs.3,320/-
Rs.2,320/-
Provision for discount on debtors account should be credited to the Profit and Loss Account.
True /False
Consideration to the fact that the repairs and maintenance cost is less in the initial years of life of the asset and hence needs to be counterbalanced by higher amount of depreciation in the :-
Straight line method
Written down value method
Endowment policy method
Sinking fund method
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.
Territory I -Rs.2,000/-; Territory II -Rs.2,000/- and Territory III -Rs.2,000/-
Territory I -Rs.2,700/-; Territory II -Rs.2,700/- and Territory III -Rs.2,700/-
Territory I -Rs.2,700/-; Territory II -Rs.2,700/- and Territory III -Rs.2,000/-
Territory I -Rs.2,000/-; Territory II -Rs.2,700/- and Territory III -Rs.2,000/-
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
Rs.880,000/-
Rs.800,000/-
Rs.600,000/-
Rs.660,000/-
Re-order level should be higher than Monthly requirement /Average stock level /Annual requirement /Minimum level but lesser than maximum stock level.
What is the balance of the cash account after considering the relevant transactions from the following set : 4th July, 2004-Sold goods to Deshmukh & Co. for Rs.2,500/-; 5th July, 2004-Received Rs.5,000/- for rent of June, 04; 7th July, 2004-Paid salaries by cheque for Rs.8,000/-; 15th July, 2004-Received commission, in cash, from XYZ Ltd., Rs.3,000/-; 21st July, 2004-Paid salaries by cash Rs.2,500/-; 22nd July, 2004-Deposited cash into Bank of India Rs.3,000/-; 25th July, 2004-Purchased furniture from Shantilal for Rs.10,000/-. Shantilal has given a credit period of 45 days; 26th July, 2004-Paid cash for purchase of machine from Elpro Ltd. For Rs.30,000/-; 28th July, 2004-Paid ready cash for advertisement inserted in newspaper, Rs.200/-; 28th July, 2004-Withdrawn cash from Bank of India Rs.50,000/-.
Rs.22,300 (debit)
Rs.22,300 (credit)
Rs.33,200 (debit)
Rs.33,200 (credit)
Factory cost is Rs.13,10,800/-. The administrative overheads are salaries Rs.40,000/-, rent and rates Rs.6,400/-, traveling expenses Rs.12,400/-, Depreciation Rs,2,400/-, Directors fees Rs.24,000/-, General Charges Rs.24,800/-, Manager's salary Rs.38,400/-. What will be the office cost?
Rs.14,59,200/-
Rs.11,72,200/-
Rs.13,10,800/-
Rs.15,10,800/-
XYZ Ltd. has set up the following standards for variable production overheads : standard hours per unit -3 hours; standard variable overhead per hour -Rs.10/-. The actual data for the month is as follows : actual variable overheads incurred Rs.620,000/-; actual output -20,000 units and actual hours worked- 54,000 hours. Find variable overheads cost variance.
Rs.20,000/- (Adverse)
Rs.20,000/- (Favourable)
Rs.60,000/- (Adverse)
Rs.60,000/- (Favourable)
The concept of marginal costing is based on the important distinction between product costs and Indirect /Direct /Variable /Period costs.
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?
Rs.177,000/-
Rs.200,000/-
Rs.178,000/-
Rs.277,000/-
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.
Rs.6,360/- (Favourable)
Rs.17,280/- (Adverse)
Rs.5,760/- (Adverse)
Rs.16,680/- (Adverse)
Industries which have high fixed cost burden but low variable cost have Narrow /Smaller /Larger /Flat angle of incidence.
Special aspects of co-partnership include:-
Workers are granted ownership rights
Indirect monetary remuneration
The morale of the workers is increased
The workers are rewarded for individual efficiency
The credit purchases are as follows : July Rs.80,000/- and August Rs.140,000/-. Creditors are paid either on a 'prompt basis' (on the spot) or 30 days basis. It is estimated that 10% of the creditors are in the prompt category. Find the amount paid :-
Rs.161,000/-
Rs.121,000/-
Rs.177,000/-
Rs.118,000/-
The use of contribution per unit of limiting factor as the basis for ranking products to be produced and sold is aimed at which of the following?
Maximization of turnover
Minimization of turnover
Maximization of short-term profit
Maximization of long-term profit
Obsolescence arises when a machine has to be discarded in favour of one better adopted to its purpose and giving better result.
True /False
A manufacturing unit produces electronic circuits at the rate of 6 pieces an hour. The unit works in single shift of 8 hours during a six-day week and remains close for 18 days a year on account of holidays. Average idle hours per month is 20 for cleaning and maintenance of equipments. Against an average annual output of 12,000 pieces during last ten years, the actual output achieved during the year was 10,800 pieces. The fixed overheads for the year amounted to Rs.540,000/-. You are required to calculate the idle capacity costs on the assumption that overhead recovery rate is based on maximum capacity.
Rs.207,121.60
Rs.200,000/-
Rs.193,121.60
Rs.187,000/-
Management Accounting - A30
Management Accounting - A29
Question Depreciation, interest and property tax continue even when the operations are discontinued.
Correct Answer True
Question The reasons and objectives of budgets may be stated as :
Correct Answer To aid the planning of annual operations , To communicate the organisational plans to the different departments , To motivate the managers to strive for attainment of the organisational goals
Question The key factor determines the :
Correct Answer Level of activity , Capacity utilization , Level of sales
Question Essentials for effective implementation of budgetary control system are
Correct Answer Commitment of top management , Clearly defined objectives , Continous budget education
Question Which of the following is a correct definition of the key factor?
Correct Answer The factor which limits the activites of the undertaking
Question The integrated form of all functional budgets is known as :
Correct Answer Master budget
Question 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 untis 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.
Correct Answer Sales volume variance -Rs.120,000/- (Favourable) , Sales mix variance -Rs.44,000/- (Favourable) , Sales Quantity variance-Rs.76,000/- (Favourable)
Question ________ variance represents the over or under utilisation of pland and machinery.
Correct Answer Capacity
Question The following data relates to the month of October : Actual variable overheads Rs.60,000/-; budgeted variable overheads Rs.80,000/-; actual output 900 units; budgeted output 1,000 units; standard time for one unit - 2 hours. Calculate variable overhead efficiency variance.
Correct Answer Rs.4,000/- (Favourable)
Question Which of the following operations would normally be carried out first when preparing a master budget?
Correct Answer Determining the budget period
Question Interest on capital is an allowable expenditure for parntership firms, as per the provisions of the ________ .
Correct Answer Income Tax Act, 1961
Question Mixers Ltd. is engaged in producing a standard mix using 60kg of chemical X and 40 kg of chemical Y. The standard loss of production is 30%. The standard price of X is Rs.5/- per kg.and of Y Rs.10/- per kg. The actual mix and yield were as follows : X - 80 kg @ Rs.4.50 per kg; Y - 70 kg @ Rs.8/- per kg. Actual yield - 115 kg.Compute material yield variance.
Correct Answer Rs.100/- (Favourable)
Question Select the examples of functional budgets:
Correct Answer Sales budget , Production budget , Research and development budget
Question Sita and Gita are partners of SGL & Co. As on 1st August, 2003 Sita's capital stood as Rs.10,000/- and Gita's capital as Rs.18,000/-. If interest on capital is to be provided @ 10% p.a., what should be the treatment of this interest in the profitability statement, assuming there were no additions to capital during this period?
Correct Answer Profit and loss account should be debited with Rs.1,866.67
Question KDL Ltd. charges depreciation @ 20% on written down value method. The net book value of its machinery on 1st January, 2003 was Rs.125,000/-. What will be the net book value of its machinery on year end, i.e.31st December, 2003, assuming there were no additions or disposals during the year?
Correct Answer Rs.100,000/-
Question Standard costing is always accompanied by a system of budgeting but budgetary control may be operated in business where standard costing is impracticable.
Correct Answer True
Question An amount of Rs.200/- is received from P and is credited to Q. The rectification entry would affect ________
Correct Answer P's A/c and Q's A/c
Question Budgetary control system provides a basis for establishment of the incentive systems.
Correct Answer True
Question A fixed budget is useful only when the actual level of activity corresponds to the budgeted level of activity.
Correct Answer True
Question A low margin of safety indicates ________ fixed overheads.
Correct Answer higher
Question Category A items, as per ABC analysis, represent ________ % of the total number of items in inventory.
Correct Answer less than 10
Question The gross profit transferred from the trading account is Rs.98,999/-. The expenses debited to the profit and loss account are salary Rs.12,000/-; advertisement expenses Rs.18,000/-; printing and stationery Rs.5,500/- and managing director's incentive Rs.28,000/-. It was noted that no entry was made for salary of one month which was due but not yet paid. Find the net profit of the company.
Correct Answer Rs.34,408.09
Question Price based on Uniform Costing may be taken to be reliable and representative of the whole industry.
Correct Answer True
Question The budget manual must contain statement regarding:
Correct Answer Objectives of the orgainsation
Question Annual subscription paid by bank to the Chamber of Commerce on 31/03/04, as per the standing instructions, and advise sent thereafter, may lead to:
Correct Answer Balance as per bank book > Balance as per pass book
Question Entry for dishonour of cheque appears only in the pass book, this entry should be ________ in the bank book.
Correct Answer Passed
Question Since the pass book and the bank book record the ________ transactions, the bank balance as per these books should be equal.
Correct Answer Same
Question Financial Accounting discloses the financial performance & Financial status of the business as a whole
Correct Answer True
Question Cost Accounting is a legal requirement.
Correct Answer False
Question Cash account can have a credit balance.
Correct Answer False
Question Labour turnover means :
Correct Answer Influx and exit of employees , Quantitative measurement of instability of working force , Rate of change in the average working force
Question Financial Statements which are generated as a result of the management accounting report & financial performance of the organization as a whole.
Correct Answer False
Question The half-yearly sales of product X are as follows : 1st half -30,000 units; 2nd half - 37,500 units. The production pattern of the company is based on 80% of the sales of the current six months and 20% of the budgeted sales of the next six months. Calcu
Correct Answer 1st half -31,500 units; 2nd half - 30,000 units
Question The variance which denotes the variation in overhead recovery due to the budgeted quantity of products being greater or less than actual production, is known as ________ variance.
Correct Answer Volume
Question As per the provisions of Section 209 of ________, all the company form of organisation is legally required to follow the mercantile or accrual system of accounting.
Correct Answer The Companies Act, 1956
Question Cost Accounting and Management Accounting are similar to each other in many respects.
Correct Answer True
Question The reports generated by financial accounting are meant for the use by management for effective decisions.
Correct Answer True
Question Token or disc method is a related to the system of ________.
Correct Answer Time-keeping
Question Cost Accounting may be considered to be a part of management Accounting.
Correct Answer True
Question The ________ variance is the difference between the actual variable overhead incurred and the standard variable overhead charged to production.
Correct Answer Total variable overhead
Question It is said that marginal costs are used primarily in guiding decisions that are yet to be made.
Correct Answer True
Question Management Accounting is not at all a legal requirement
Correct Answer True
Question Identify the variable expenses.
Correct Answer Repairs of plant when it is undertaken by an outside agency , Carriage inward by hired carriers , Wages paid to casual workers
Question Which of the following cost is also termed as Prime Cost ?
Correct Answer Direct cost
Question The method of remuneration under which the workers are given in share in profits of the organization, at a specified percentage, along-with their wages, is known as ________ method.
Correct Answer Profit-sharing
Question Select the appropriate rectification entries for the following transactions (i) Rs.200/- received in respect of a bad debt previously written off was credited to Debtors account. (ii) Paid Rs.6,000/- to a Mr. Rao, clerk, as salary in lieu of notice. This amount was debited to his personal account (iii) Interest @ 5% p.a. on a loan of Rs.5,000/- was debited to general expenses account.
Correct Answer Debtors A/c ..........Dr. Rs.200/- to bad debts recovered A/c Rs.200/- , Rs.6,000/- to Rao's A/c Rs.6,000/- , Rs.250/- to General Expenses A/c Rs.250/-
Question 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.
Correct Answer Rs.43,200/-
Question The analysis which is also referred as 'what if' analysis is known as________.
Correct Answer Cost volume profit analysis
Question The balance sheet has three columns, viz. assets, liabilities and ledger folio.
Correct Answer False
Question The various areas in which uniform costing can be adopted are . .
Correct Answer Valuation of inventories , Charging of depreciation , Apportionment of overheads
Question The varinace that attempts to ascertain the effect of change in sales volume on the difference between actual and budgeted contribution is known as ________ variance.
Correct Answer Sales margin volume
Question Depreciation is caused by use factor, obsolescence and ________.
Correct Answer Time factor
Question Depreciation under Reducing Balance Method is calculated as (Number of units * Rate of depreciation per unit)
Correct Answer False
Question All cash sales are recorded in the sales register.
Correct Answer False
Match The Following
Question Correct Answer
Transport facilities to employees Preventive cost of labour turnover
Relationship between supervisor and worker Avoidable cause of labour turnover
Dismissal of employee Unavoidable cause of labour turnover
Increased spoilage and defectives Replacement cost of labour turnover
Question Indirect material cost is an integral part of finished goods.
Correct Answer False
Question Select the various methods adopted for treatment of under or over absorbed overheads
Correct Answer Use of supplementary rates , Carrying over the amount to remaining period , Writing off to the Costing Profit and Loss Account
Question It is difficult to apply Uniform costing system for an industry which has labour intensive companies as well as capital intensive companies, because :
Correct Answer The cost structure is different
Match The Following
Question Correct Answer
Normal Standards Anticipated to be achieved in future
Basic Standards Established for a longer period of time
Current Standards Established for a shorter period of time
Expected Standards Anticipated to be achieved in the budget period
True/False
Question Trading account is an important account which will be used to analyze how successful and how efficiently the firm runs its business.
Correct Answer True
Question Loans which are borrowed from financial institutions are to be paid off in 8 years, should be disclosed as ________ in the balance sheet.
Correct Answer Long term liabilities
Question The gross profit for the year 2004 is Rs.184,326/-. The depreciation on furniture for the year is Rs.24,561/-; dividend received amounted to Rs.12,000/- and the director's remuneration worked out to be Rs.95,784/-. Find the net profit for the year 2004.
Correct Answer Rs.75,981/-
Question The components of the selling and distribution cost budget are :
Correct Answer Distribution expenses , Publicity expenditure , Salary of sales-office workers
Question Select the correct statements. Ram's account…….Dr. Rs.10,000 To Bank account Rs.10,000
Correct Answer Ram is a creditor , Rs.10,000/- has been paid to Ram , The payment is made by cheque
Question A written order sent to inform the purchasing department of a need for materials is called a ________.
Correct Answer Purchase requisition note
Question The overheads apportioned to three production departments A, B and C and two service departments P and Q are Rs.75,000/-; Rs.100,000/-; Rs.80,000/-; Rs.60,000/- and Rs.40,000/- respectively. Overheads of department P are shared by A, B, C and Q in the ratio of 4 : 3 : 2 : 1 and that of department Q are shared by A, B, C and P in the ratio of 3 : 3 : 2 : 2. Ascertain the total overheads of each production department.
Correct Answer A -Rs.116,836/-; B -Rs.134,889/- and C -Rs.103,265/-
Question Re-order quantity may be measured as :
Correct Answer Maximum stock level - re-order level + (minimum usage X minimum re-order period)
Question 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.
Correct Answer Debit
Question An error of partial omission can be rectified by either debiting or crediting the ________ account, as the case maybe.
Correct Answer suspense
Question The final result disclosed by trading account is the ________profit earned by the organization.
Correct Answer Gross
Question Number of days inventory is held can be calculated by dividing number of days in a year by ________.
Correct Answer Inventory turnover ratio
Match The Following
Question Correct Answer
Total cost Cost of finished goods
Non operating income Profit on sale of investment
Selling and distribution overheads Advertisement expenses
Factory overheads Repair for factory building
Question The amount of profit which is retained by the organisation is transferred to 'Reserves and Surplus' in the balance sheet.
Correct Answer True
Question Purchase of national saving certificates by the company from its profits, should be debited to ________ account.
Correct Answer Investments
Question 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.
Correct Answer 66.9 days
Question Material mix and material yield variance can be calculated even when only one raw material is used for production.
Correct Answer False
Question A factory has 8 hours a day and the standard daily wage is Rs.80/-. Standard output per hour is 5 units. During a day worker P produced 30 units, Q produced 36 units and S produced 42 units. Calculate wages payable to P,Q and S under Merrick Multiple Piece Rate System.
Correct Answer P - Rs.60/-; Q - Rs.79.20; S - Rs.100.80
Question 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?
Correct Answer 68,182 units
Question The organization chart shows the following aspects :
Correct Answer Functional responsibility of different functional managers , Delegation of authority to various managers , Inter-functional relationships of these managers
Question Select the correct formulae for calculating break even point.
Correct Answer Fixed cost / (Selling price per unit - Variable cost per unit) , [Fixed cost / Marginal contribution] X Sales , [Fixed cost / (Fixed cost + Net Profit)] X Sales
Question Select the transactions which can be entered in the Journal proper.
Correct Answer Opening entries , Closing entries , Rectification entries
Question The lowest profit volume ratio can be ________%.
Correct Answer 0
Question Trading account is used to analyse how successfully and how efficiently the firm runs, particularly with regards to the maintenance of the gross profit margin.
Correct Answer True
Question Calculate the earnings of workers Monica and Sonica under Taylor's differential piece rate system. Hours in a day =8; normal rate per unit = Rs.12/-; standard time per unit = 30 seconds; rate differential : 80% of piece rate below standard, 120% of piece rate at or above standard. Monica produces 900 units per day and Sonica produces 1,100 units per day.
Correct Answer Monica -Rs.72/-; Sonica - Rs.132/-
Question The factors that influence determination of budget period are :
Correct Answer Type of budget, viz. Sales or capital expenditure budget , General economic conditions , Trade cycle of business
Question Uniform costing system can be successfully implemented in any industry only when :
Correct Answer Information is freely supplied by all the units , Well organised sector is ready to share the technological improvements , Information furnished by the units is complete and correct
Question In marginal costing, under and over absorption of fixed overheads is bound to arise.
Correct Answer False
Question Trade Discount refers to the discount . . .
Correct Answer received on purchases
Question 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.
Correct Answer 80,000 units
Question Cool-wind Ltd., manufactures fans, which at sold at Rs.400 pre piece. The cost of sales is composed of 40% of direct material, 30% wages and 30% overheads. An increase in material price by 25% and in wage rate by 10% is expected in the forthcoming year; as a result of which the profit at current selling price may dwindle by 39% of present gross profit. With the above information, you are required to determine the future selling price, if the present rate of gross profit is to be maintained.
Correct Answer Rs.452/-
Question Credit balance in interest account indicates income for the organisation.
Correct Answer True
Question Money Measurement Concept__________________
Correct Answer Only those transactions and facts expressed in terms of money , This Concept imposes severe restrictions on the kind of information available from financial statements , Due to several restrictions it becomes drawback of financial accounting
Question A started business with cash 5000, building 5000, furniture 2000, having depreciation of 10% on building. The total amount of capital comes to Rs. __________
Correct Answer 11500
Question The periodical total of sales book was cash short by Rs. 5000 for rectifying the same, which A/C to be debited
Correct Answer Suspense A/C
Question Following errors do not affect the trial balance
Correct Answer Error of Principle , Error of Omission , Error of Commission
Question A contractor’s bill for the extension of premises amounting to Rs. 2750 has been debited to building repair account
Correct Answer False
Match The Following
Question Correct Answer
Opportunity Cost Cost can be controlled
Differential Cost Historical Cost
Sunk Cost Cannot be controlled
Controllable Cost Increase or Decrease in cost
Uncontrollable Cost Return or yield
Question Indirect material cost assist the manufacturing process is an integral part of finish goods.
Correct Answer False
Question Dividend received is a Non-operating Income.
Correct Answer True
Question A Co. having factory cost of Rs. 13,10,800. The administrative overheads are salaries 40,000, rent & rates 6400, Traveling expenses 12,400, Depreciation 2400, Directors fees 24,000, General Charges 2
Correct Answer 14,59,200
Question Factory overheads are termed as
Correct Answer Production overheads , Works overheads , Manufacturing overheads
Question The aims of perpetual inventory system are as follows
Correct Answer Maintaining Bin cards , Maintaining store ledger , Continuous verification of physical stock
Question These are the features of variable overheads
Correct Answer vary directly in proportion to volume of output. , per unit cost remains the same , total overheads may increase or decrease as per volume of output.
Question The ultimate incorporation of all functional budgets takes the form of budgeted Profit & Loss Account and Balance Sheet.
Correct Answer True
Question If during a month anticipated sales are 5,000 kg, opening stock is 1,000 kg and closing stock is 500 kg then what will be the quantity of production
Correct Answer 4,500 kg
Question The treatment of ________ time in cost accounting depends upon the distinction between normal and abnormal time.
Correct Answer Idle
Question Budgeted profit and loss account and budgeted balance sheet are also known as ________.
Correct Answer Master budget
Question Differential cost analysis is incorporated in the cost books.
Correct Answer False
Question The process of recording attendance time of the workers is known as time booking.
Correct Answer False
Question Factory light, telephone expenses are examples of ________ expenses.
Correct Answer Indirect
Question For successful implementation of uniform costing system, it is very essential to devise ________, containing recommended cost accounting plan and procedures.
Correct Answer cost manual
Question The combination in which different products are sold by a company is known as ________.
Correct Answer Sales mix
Question Which of the following is usually prepared daily by employees for each job worked on?
Correct Answer Job card
Question Profit = Profit volume ratio X Margin of safety
Correct Answer True
Question 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.
Correct Answer Loss of trained personnel , Loss of regular customers , Expenditure required to restart the factory
Question Locate the error and its features in the following -
Correct Answer Compensating errors , Trial balance will not be affected , Trial balance will be affected
Question Rs.2,650/- were paid to ABC Ltd. for maintenance of machine; which account should be debited for this transaction?
Correct Answer Maintenance of machine account
Multiple Choice Multiple Answer
Question Which of the formulae can be used to calculate profit volume ratio :-
Correct Answer Change in contribution / Change in sales , 1 - (Change in variable cost / Change in sales) , (Fixed cost + Profit) / Sales
Multiple Choice Multiple Answer
Question 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.
Correct Answer Cost per crankshaft for jeep is Rs.445.45 , Cost per crankshaft for truck is Rs.805.66 , General expenses should be apportioned on direct labour ratio
Multiple Choice Single Answer
Question The direct material usage budget and direct material purchase budget differ because of which of the following?
Correct Answer A planned change in the level of material stock
Multiple Choice Multiple Answer
Question Plant and equipment can become a key factor in the following circumstances :-
Correct Answer Limited capacity due to lack of capital , Insufficient capacity due to shortage of space , Limited number of hours for which the plant can be used
Multiple Choice Multiple Answer
Question Select the accounts to be disclosed on the liability side of the Balance sheet :-
Correct Answer Loan , Outstanding expenses , Creditors
Select The Blank
Question The ________ books are preferred when the volume of transactions is very large.
Correct Answer Subsidiary
Select The Blank
Question ________ is any documentary evidence to justify that a particular transaction has taken place.
Correct Answer Voucher
Select The Blank
Question The final result disclosed by Profit & Loss Account is the ________ profit after taxes earned by the organization.
Correct Answer Net
True/False
Question Receipts and payments method of cash budget is useful for preparing long term estimates.
Correct Answer False
Multiple Choice Single Answer
Question The Asian Industries specialises in the manufacture of small capacity motors. The cost structure of a motor is as under : Material Rs.50/-; labour Rs.80/-; variable overheads 75% of labour cost. The fixed overheads of the company amount to Rs.240,000/- per annum. THe sale price of the motor is Rs.230/- each. Determine the number of motors that have to be manufactured and sold in a year in order to break-even.
Correct Answer 6,000 motors
True/False
Question The purpose of profit and loss account is to brign together information which relates to gross profit and the expenses for running the business.
Correct Answer True
True/False
Question If the storage cost of inventory increases, then the economic order quantity also increases.
Correct Answer False
Multiple Choice Single Answer
Question The reporting method used in the costing system should be based on the principle of
Correct Answer Management by exception
Multiple Choice Single Answer
Question XYZ Ltd. has a profit volume ratio of 40%. By what percentage should sales be increased to offset 20% reduction in selling price, so that the existing profit remains intact.
Correct Answer 0.6
Multiple Choice Single Answer
Question A company manufactures and sells four products, viz. A, B, C and D. The details are as follows : Profit volume ratio:-Product A- 20%, Product B- 40%, Product C-25%, Product D-18%; Incremental rupee sale for each Rupee spent on advertisement:-Product A- Rs.11/-, Product B-Rs.6/-, Product C-Rs.12/-, Product D-Rs.10/-. Amount of advertisement available is only Rs.5,000/-.
Correct Answer Product B
True/False
Question Match
Correct Answer True
Multiple Choice Single Answer
Question An analysis of the time card of a worker on a machine shows that of the total 48 hours, he worked 45 hours (including 4 hours overtime) on production and that 3 hours was idle due to machine break-down. The rate of the worker is rupees ten per hour : but overtime is paid at 50 per cent extra. You are required to calculate the earnings of the worker.
Correct Answer Rs.500/-
Select The Blank
Question In case of seasonal industry, the budget period may be taken as ________.
Correct Answer One season
Multiple Choice Single Answer
Question The standard derpartmental overhead rate is Rs.15/- per hour. Based on the following details, work out the activity level at which the overhead rate has been pre-determined. Activity level : 600 hours; overhead allowance Rs.12,000/-. Activity level : 800 hours; overhead allowance Rs.14,400/-. Activity
Correct Answer 1,600 hours
True/False
Question The total of the direct costs are termed as overheads.
Correct Answer False
Multiple Choice Single Answer
Question Amit purchase of Rs. 6710 had been posted to the debit of the creditors A/C as 6170 rectifying the transaction the creditor A/C is to be debited amount to Rs
Correct Answer 540
True/False
Question Market price may be treated as latest purchase price, realisable price or replacement price
Correct Answer True
True/False
Question Office and administration overheads consists of all overhead costs incurred from procurement of material till the stage of selling the final product.
Correct Answer False
True/False
Question Sold goods to Ajay on credit Rs 10,000/- Ajay account to be credited
Correct Answer False
True/False
Question Goods lost by fire firstly transfers to Trading Account credit side & corresponding amount is debited to P&L account.
Correct Answer True
Multiple Choice Multiple Answer
Question A manufacturer uses 200 units of component every month and he buys them entirely from outside supplier. The order placing and receiving cost is Rs. 100 and annual carrying cost is Rs. 12. Calculate Ec
Correct Answer 200 units
Select The Blank
Question Due to compensating errors the ________ accuracy of the trial balance ________ affected
Correct Answer arithmetical
Correct Answer doesnot
Select The Blank
Question Preventive costs of labour turnover are ________ and ________ .
Correct Answer welfare activities
Correct Answer medical services
Multiple Choice Multiple Answer
Question Basic three steps in Standard Costing are
Correct Answer Setting standards , Comparing actuals with standards , Measurement of variance
True/False
Question If the excess quantity is already billed in the invoice, it will be approved and paid. If not Debit note may be issued to the supplier for amending the amount.
Correct Answer False
Multiple Choice Single Answer
Question A proprietor purchase goods worth Rs. 5500 & cash account credited to Rs. 5000 rectification of the suspense accounted debited to Rs
Correct Answer 500
Multiple Choice Single Answer
Question Depreciation charged on land & building, first debited to Profit & Loss A/C. and then to be ---------------------
Correct Answer Deducted from land & building
Select The Blank
Question One of the limitations of the budgetory control is that it ________.
Correct Answer is an expensive affair
Multiple Choice Multiple Answer
Question Features of real account are . . .
Correct Answer Mainly deals with items which are having physical , Consists of some intangible assets , examples include - Lane, Building, Vehicles
Select The Blank
Question A trading concern will have only ________ overheads and selling overheads.
Correct Answer administration
Select The Blank
Question ________ is an example of intangible asset.
Correct Answer Goodwill
Multiple Choice Single Answer
Question Uniform costing system is useful in the following areas
Correct Answer Classification of cost accounts
Multiple Choice Single Answer
Question 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.
Correct Answer Rs.62,500/-
Multiple Choice Single Answer
Question The budgeted level of activity of the production department of Style India Ltd. is 5,000 hours per period. From the given information find the cost for 3,500 hours per period. Indirect wages Re.0.40 per hour;
Correct Answer Rs.2,480/-
Select The Blank
Question Normally, the planning for dividend payments and interest payments is based on the ________ budget.
Correct Answer Cash
Multiple Choice Single Answer
Question The statement, mainly applicable to company form of organization, which discloses the manner in which the profit after tax is distributed is known as:
Correct Answer Profit & Loss Account Appropriation Account
Select The Blank
Question Generally, all real accounts will have a ________ balance
Correct Answer Debit
Multiple Choice Single Answer
Question The alternative courses of action for an integrated textile mill are:
Correct Answer Sell cloth
True/False
Question The problem of multiple key factors can be solved with the help of techniques like linear programming, operations research, etc.
Correct Answer True
True/False
Question Fixed expenses will move up by jumps if the output exceeds the capacity.
Correct Answer True
Multiple Choice Single Answer
Question Net book value of loose tools as on 1st April, 2003 was Rs.45,000/-. As on 31st March, 2004 the management felt that the real worth of these loose tools is only Rs.30,000/-. What can be done to achieve the desired reduction in the net book value of loose tools?
Correct Answer By providing depreciation to the extent of Rs.15,000/-
Multiple Choice Multiple Answer
Question Cost control procedure deals with :
Correct Answer Establishment of plans , Comparison of actual and planed performance , Computation of variance
Match The Following
Question Correct Answer
Tool-room expenses Direct labour hours
Power Horse power of machine
Stores department Number of material requisitions
Boiler house Cubic feet of steam supplied
Multiple Choice Single Answer
Question The following data is extracted from the books of a manufacturing concern for the year 2003-04: Direct materials Rs.205,000/-; direct labour Rs.75,000/-; fixed overheads Rs.60,000/-; variable overheads Rs.100,000/- and sales Rs.500,000/-. Calculate the break even point if there is an increase of 10% in the fixed expenses.
Correct Answer Rs.275,000/-
True/False
Question Bank charges debited in the pass book represent clerical mistake on the part of the bank employees.
Correct Answer False
Multiple Choice Single Answer
Question A worker completes a job in a certain number of hours. The standard time allowed for the job is 10 hours, and the hourly rate of wages is Rs.10/-. The worker earns at 50% rate a bonus of Rs.20/- under Halsey plan. Find out his total earnings under the Rowan plan.
Correct Answer Rs.84/-
Match The Following
Question Correct Answer
Dividend paid Profit and loss appropriation account
Freight inwards Manufacturing account
Sales Trading account
Freight outwards Profit and loss account
Multiple Choice Single Answer
Question The credit sales are as follows : February Rs.180,00,000/-, March Rs.192,00,000/- and April Rs.108,00,000/-. 50% of credit sales are realised in the month following the sale, 30% in the second month following the sale and the balance in the third month f
Correct Answer Rs.15,000,000/-
Multiple Choice Multiple Answer
Question The disadvantages of supplementary overhead rates are:
Correct Answer It can be determined only after the end of the accounting period , Defeats the basic concept of normal cost , Involves lot of clerical activity
Select The Blank
Question In the scheme of cost-________-profit analysis, an attempt is made to measure the variations of cost with volume.
Correct Answer volume
Select The Blank
Question The ________ is of immense help in guiding the companies to operate their accounts on uniform basis.
Correct Answer uniform cost manual
Multiple Choice Multiple Answer
Question The productive causes of idle time are :
Correct Answer Instructions are not clearly given , Power failures , Machine breakdown
Multiple Choice Multiple Answer
Question The factors which influence the selection of the method for absorption of overheads are:
Correct Answer Type of industry , Nature of products , Manufacturing process
Match The Following
Question Correct Answer
Emerson's efficiency bonus system
Actual hours X Hourly rate + Bonus percentage (Actual hours X Hourly rate)
Piece rate system Output X Wage rate per unit
Barth Premium system Hourly Rate X (square root of Standard Hours X Actual Hours)
Time rate system Attendance time X Hourly wage rate
Multiple Choice Single Answer
Question If the overhead expenditure to be absorbed is the foreman's salary, the most appropriate basis for absorption would be :
Correct Answer Direct labour hours
True/False
Question In case the standards are too difficult to achieve, they will provide additional incentive for improvement.
Correct Answer False
Multiple Choice Single Answer
Question Standard cost specification per unit of product : 20 labour hours per unit @ Rs.22/- per labour hour.Actual production and labour cost : Actual production 300 units; time used in production -5,500 hours; Idle time -600 hours; time paid for-6,100 hours, total wages paid -Rs.146,400/- . Compute Idle time variance.
Correct Answer Rs.13,200/- (Adverse)
Multiple Choice Single Answer
Question Details of budgeted and actual fixed overheads and output for the year 2004 are as follows : Budgeted fixed overheads -Rs.20,00,000/-; actual fixed overheads -Rs.21,50,000/-; budgeted output - 40,000 units and actual output- 45,000 units. Compute the per unit standard rate for fixed overheads.
Correct Answer Rs.50/-
Multiple Choice Single Answer
Question In considering a special order situation that will enable a company to make use of presently idle capacity, which of the following costs would be irrelevant?
Correct Answer Depreciation
True/False
Question Factory overheads consist of all overhead costs incurred from the stage of procurement of material till the production of finished goods.
Correct Answer True
Multiple Choice Multiple Answer
Question The management of Dick Ltd. is deciding whether to buy component Y from the supplier, since the purchase cost is less than the manufacturing cost. State the non-financial aspects that must be considered before arriving at a decision.
Correct Answer Reliability regarding quality of the material supplied by the supplier , Alternative use of labour of engaged in manufacturing component Y , Regularity of material supplies from the supplier
True/False
Question In marginal costing, decisions are guided by profit rather than contribution margin.
Correct Answer False
Multiple Choice Single Answer
Question Select the factor which can prove to be a very crucial key factor in case of an oil refinary.
Correct Answer Supply of crude oil
Multiple Choice Multiple Answer
Question The factors to be considered while preparing the direct materials budget are :
Correct Answer Adequacy of material storing space , Availability of funds , Material in stores but reserved for specific purposes
Select The Blank
Question Excess direct labour wages will be disclosed by 'Direct labour________ variance'.
Correct Answer Rate
True/False
Question The difference between sales and margin of safety is equal to budgeted sales.
Correct Answer False
Select The Blank
Question A ________ note is prepared when excess material is returned to stores.
Correct Answer Material returned
Select The Blank
Question The systematic process of identifying and reporting variance is known as ________.
Correct Answer Variance analysis
Match The Following
Question Correct Answer
[( Actual sales - Break even sales) ]/ Actual sales Margin of safety as a percentage of actual sales
Fixed cost / Contribution margin ratio Break even point
Fixed cost - (Sales X Profit volume ratio) Profit
(Sales X Profit volume ratio) -Fixed cost Loss
True/False
Question Marginal costing rewards sales whereas absorption costing rewards production.
Correct Answer True
Select The Blank
Question Dividend received on amount invested in shares is an example of ________.
Correct Answer non-operating income
Multiple Choice Single Answer
Question The store-keeper should initiate action for the purchase of a material, when it reaches its :
Correct Answer Re-order level
Select The Blank
Question Under-recovery of overheads implies that the profit will be________ to the extent of total under-recovered overheads.
Correct Answer Increased
Multiple Choice Single Answer
Question 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.
Correct Answer The statement and the reason both are correct
Multiple Choice Single Answer
Question Double entry system of accounting follows the principle of :
Correct Answer Every debit has corresponding credit
Multiple Choice Single Answer
Question Where, in the final statements of accounts, should we disclosed the closing balance of income received in advance?
Correct Answer Balance sheet - on the liability side
True/False
Question Bank reconciliation statement must be prepared before the preparation of profit and loss account and balance sheet.
Correct Answer True
True/False
Question In differential cost analysis, decisions are taken by comparing the incremental revenue with differential costs.
Correct Answer True
True/False
Question Due to compensating errors the arithmetical accuracy of the trial balance is affected.
Correct Answer False
Select The Blank
Question A worker is paid a monthly salary of Rs.500/- alongwith a bonus of 50 paise per unit completed, this type of labour cost may be classified as ________ cost.
Correct Answer Semi-variable
Multiple Choice Single Answer
Question Following data has been extracted from the records of a manufacturing company whose level of operations varies during different months. Minimum activtity : 30,000 machine hours and manufacturing overeheads Rs.400,000/-. Maximum activity : 80,000 machine hours and manufacturing overheads Rs.600,000/-. Determine the fixed and variable components of manufacturing overheads.
Correct Answer Fixed overheads Rs.280,000/- and variable overheads Rs.4/- per machine hour
Multiple Choice Single Answer
Question You been informed that the carrying cost and ordering cost with best order size of 1,200 units is Rs.6,000/-. Unit cost of material is Rs.50/-. Annual storage cost per unit is 10% of the unit price of material. Ordering cost is Rs.240/- per order. Ascertain annual material requirement, assuming that at economic order quantity the total storage cost is equal to the total ordering cost.
Correct Answer 15,000 units
Select The Blank
Question Graphically, fixed cost line will be ________ the 'x-axis'.
Correct Answer Parallel to
Select The Blank
Question ________ variance arises when the mix of materials used in the production is different from the predetermined standard mix of operation.
Correct Answer Materials mix
True/False
Question Standard costing is always accompanied by a system of budgeting but budgetary control may be operated in business where standard costing is impracticable.
Correct Answer True
Multiple Choice Single Answer
Question Over which of the following costs is the management likely to have least control?
Correct Answer Buildings insurance cost
Select The Blank
Question Loss of uninsured goods by fire was debited incorrectly to United India Assurance Company's account instead of debiting it to ________ account.
Correct Answer Goods lost by fire
Multiple Choice Single Answer
Question The given data pertains to the month of April : Budgeted : Fixed overheads Rs.10,000/-; output - 5,000 units; standard time for one unit - 4 hours. Actual : Fixed overheads -Rs.10,200/-; output - 5,200 units and actual hours worked - 20,100 hours. Calculate fixed overhead cost variance.
Correct Answer Rs.200/- (Favourable)
Multiple Choice Single Answer
Question Mr. Oak, materials manager, spends 40% time in the factory and the remaining in office. If his annual salary is Rs.500,000/-, what amount should be charged as office overheads?
Correct Answer Rs.300,000/-
Multiple Choice Multiple Answer
Question Select the appropriate rectification entries for the following transactions (i) Rs.200/- received in respect of a bad debt previously written off was credited to Debtors account. (ii) Paid Rs.6,000/- to a Mr. Rao, clerk, as salary in lieu of notice. This amount was debited to his personal account (iii) Interest @ 5% p.a. on a loan of Rs.5,000/- was debited to general expenses account.
Correct Answer Rs.6,000/- to Rao's A/c Rs.6,000/- , Rs.250/- to General Expenses A/c Rs.250/- , Debtors A/c ..........Dr. Rs.200/- to bad debts recovered A/c Rs.200/-
Select The Blank
Question Adjustment entries always have ________ effects.
Correct Answer Two
Multiple Choice Single Answer
Question M/s Vivek Enterprises has paid rent relating to the residence of Mr. Vivek, proprietor of Vivek Enterprises. This payment should be treated as :-
Correct Answer Drawings
Select The Blank
Question The various contents of a uniform cost manual are organization, cost accounting system and ________.
Correct Answer Presentation of information
Multiple Choice Multiple Answer
Question Which of the following information is included in the goods received note?
Correct Answer Date of receipt of material , Quantity received , Description of goods
Multiple Choice Single Answer
Question In the trial balance prepared on 31st March, 2004, the insurance premium account had a debit balance of Rs.12,865/-. This amount is the premium of the policy which expired on 29th February, 2004. The policy has been renewed from 1st March, 2004 but the premium is not yet paid. Find the amount of insurance premium still payable as on 31st March, 2004.
Correct Answer Rs.1,169.55
True/False
Question All the properties owned by the business are collectively referred to as the assets of the business.
Correct Answer True
Multiple Choice Single Answer
Question Which system provides an opportunity to companies to adopt the one best method of cost accounting system known to the industry?
Correct Answer Uniform costing
True/False
Question Primary distribution is effected on the basis of service rendered to the service departments by the production departments.
Correct Answer False
Select The Blank
Question Creche expenses may be appropriately apportioned on the basis of ________.
Correct Answer Number of female workers
True/False
Question Debit Note is an intimation sent to person dealing with the business that his account is being credited for the purpose indicated therein.
Correct Answer False
Select The Blank
Question Factory cost of a product is Rs.335,000/-, if the selling overheads are charged @ 25% of factory cost, then the amount of selling overheads should be Rs.________/-
Correct Answer 83750
Multiple Choice Single Answer
Question The following information relating to material X and its standard use for production has been extracted from the standard cost card: Price of material X = Rs.5/- per litre; consumption of X = 10 litres per unit of product. Data relating to actual material purchases and production during the period: Purchases of X = 4,000 litres; price paid for X =Rs.6/- per unit; actual production = 500units. Calculate material usage variance.
Correct Answer Rs.5,000/- (Favourable)
Multiple Choice Multiple Answer
Question The suspense account has a debit balance of Rs.40,000/-. Select the transactions which are capable of nullifying this balance.
Correct Answer Conveyance expenses of Rs.25,000/- were posted on the wrong side of the account. , Purchased computer worth Rs.28,000/- was recorded in the ledger as , The total of the purchase book was cast short by Rs.44,000/-
Multiple Choice Multiple Answer
Question Items credited to Trading Account are :-
Correct Answer Sales , Goods lost by fire , Closing stock
Multiple Choice Single Answer
Question As on 31st March, 2004, it was decided to write off Rs.800/- of debtors as bad debts. Also, provision for bad and doubtful debts is to be made @ 5% and for discount on debtors @ 4%. Find the net amount of debtors to be disclosed in the balance sheet, if the total debtors before the aforesaid adjustments is Rs.98,623/-.
Correct Answer Rs.89,214.58
Select The Blank
Question If the time booked as per the job cards is less than the attendance time it indicates ________ during which the worker has not done any work though he was present in the factory.
Correct Answer Idle time
Multiple Choice Multiple Answer
Question The process of accounting has three streams of accounting ---------------,--------and ----------------------.
Correct Answer Financial Accounting , Cost Accounting , Management Accounting
Multiple Choice Single Answer
Question Select the information to be considered before installing a costing system :-
Correct Answer Labour intensity of the product
Multiple Choice Single Answer
Question The opening balance of cash account is Rs. 25,000/-, cash received from debtors Rs. 30,000/-, sold goods on cash basis amounting to Rs. 50,000/-, paid to creditors Rs. 20,000/-, purchase furniture Rs. 5000/-. What is the closing balance of the cash account?
Correct Answer Rs. 80,000
Multiple Choice Single Answer
Question The installation and operation of ___________ accounting requires a very elaborate organizational structure and large number of rules & regulations
Correct Answer Management