Composed by sadia ali sadi MGT402 Quiz Lecture 01-17 In a repeated distribution method: Select correct option: Each service department in turn does not re-allocate its costs to all departments Each service department in turn and re-allocates its costs to all departments Each service department in turn and allocates its costs to all departments Only one service department in turn and re-allocates its costs to all departments. Repeated distribution method: This method takes each service department in turn and re-allocates its costs to all departments which benefit. The difference over the period of time between actual and applied FOH will usually be minimal when the predetermined overhead rate is based on: Select correct option: Normal capacity Designed capacity Direct Labor hours Machine hours The cost of goods sold was Rs. 240,000. Beginning and ending inventory balances were Rs. 20,000 and Rs. 30,000, respectively. What was the inventory turnover? Select correct option: 8.0 times 12.0 times 7.0 times 9.6 times By using table method where---------------- is equal, that point is called Economic order quantity. Select correct option: Ordering cost Carrying cost Ordering and carrying cost Per unit order cost A cost unit is Select correct option: The cost per hour of operating a machine
Transcript
Composed by sadia ali sadi
MGT402 Quiz Lecture 01-17 In a repeated distribution method:Select correct option: Each service department in turn does not re-allocate its costs to all departmentsEach service department in turn and re-allocates its costs to all departmentsEach service department in turn and allocates its costs to all departmentsOnly one service department in turn and re-allocates its costs to all departments. Repeated distribution method:This method takes each service department in turn and re-allocates its costs to all departments which benefit. The difference over the period of time between actual and applied FOH will usually be minimal when the predetermined overhead rate is based on: Select correct option: Normal capacityDesigned capacityDirect Labor hoursMachine hours The cost of goods sold was Rs. 240,000. Beginning and ending inventory balances were Rs. 20,000 and Rs. 30,000, respectively. What was the inventory turnover? Select correct option: 8.0 times 12.0 times7.0 times 9.6 times By using table method where---------------- is equal, that point is called Economic order quantity. Select correct option: Ordering costCarrying costOrdering and carrying cost Per unit order cost
A cost unit is Select correct option: The cost per hour of operating a machine
The cost per unit of electricity consumedA unit of product or services in relation to which costs are ascertainedA measure of work output in a standard hour Loss by fire is an example of: Select correct option: Normal LossAbnormal LossIncremental LossCan not be determined The main purpose of cost accounting is to Select correct option: Maximize profitsHelp in inventory valuationProvide information to management for decision makingAid in the fixation of selling price If, Sales = Rs. 600,000 Markup = 20% of cost What would be the value of Gross profit? Select correct option: Rs. 200,000Rs. 100,000Rs. 580,000Rs. 740,000 Gross profit = Sales (absolute amount) x 20%/120% Where the applied FOH cost is less than the actual FOH cost it is: Select correct option: Unfavorable varianceFavorable varianceNormal varianceBudgeted varianceVarianceWhen the applied cost is lesser than the actual cost it is unfavorable variance. Which of the following is correct? Select correct option: Units sold=Opening finished goods units + Units produced – Closing finished goods units Units Sold = Units produced + Closing finished goods units - Opening finished goods unitsUnits sold = Sales + Average units of finished goods inventoryUnits sold = Sales - Average units of finished goods inventory Which of the following items of expense are to be add in FOH cost Select correct option:
Rent of factory + Head office rent + salaries to factory watchmanRent of factory + factory lighting bill + Directors salariesRent of factory + factory lighting bill + Factory employees salariesHead office rent + Factory property tax + Factory small tools If, Gross profit = Rs. 40,000 GP Margin = 20% of sales What will be the value of cost of goods sold? Select correct option: Rs. 160,000Rs. 120,000Rs. 40,000Rs. 90,000 Cost of goods sold = Gross profit (absolute amount) x 80%/20% Taking steps for the fresh purchase of those stocks which have been exhausted and for which requisitions are to be honored in future” is an easy explanation of: Select correct option:
OverstockingUnder stockingReplenishment of stockAcquisition of stock Net Income before Interest and tax is also called: Select correct option: Operating Income/ProfitGross ProfitMarginal IncomeOther Income Which of the following is indirect cost? Select correct option: The depreciation of machineryThe overtime premium incurred at the specific request of a customerThe hire of tools for a specific jobAll of the given options In which of the following center FOH cost NOT incurred Select correct option: Production CenterService CenterGeneral Cost CenterHead Office
Which of the following is considered as basic systems of remunerating labor? Select correct option: Time rate system Piece rate system Halsey Premium plan Both time rate and piece rate system Net sales = Sales less: Select correct option: Sales returnsSales discountsSales returns & allowancesSales returns & allowances and sales discounts An organistation sold units 4000 and have closing finished goods 3500 units and opening finished goods units were 1000.The quantity of unit produced would be: Select correct option: 7500 units6500 units4500 units8500 unitsUnits produced = Units sold + Closing finished goods units - Opening finished goods units A store ledger card is similar to the ________ . Select correct option: Stock ledgerBin cardMaterial cardPurchase requsition card Which of the following element must be taken into account while calculating total earnings of a worker under different incentive wage schemes? Select correct option:
Rate per unitUnits of productionExtra time taken by employee to complete the productionNumber of workers employed The journal entry of purchase of stock under periodic inventory system would be? Select correct option: Inventory to Cash
Cash to Purchases Purchases to InventoryNone of the given options Closing work in process Inventory of last year: Select correct option: Is treated as Opening inventory for current yearIs not carried forward to next yearBecome expense in the next yearCharge to Profit & Loss account The FIFO inventory costing method (when using a perpetual inventory system) assumes that the cost of the earliest units purchased is allocated in which of the following ways? Select correct option: First to be allocated to the ending inventory Last to be allocated to the cost of goods sold Last to be allocated to the ending inventory First to be allocated to the cost of good sold Sales are Rs. 450,000. Beginning finished goods were Rs. 23,000. Ending finished goods are Rs. 30,000. The cost of goods sold is Rs. 300,000. What is the cost of goods manufactured? Select correct option: Rs. 323,000 Rs. 330,000Rs. 293,000 None of the given options While transporting petrol, a little quantity will be evaporated; such kind of loss is termed as: Select correct option: Normal LossAbnormal Loss It is incremental lossIt can not be abnormal loss The cost of electricity bill of the factory is treated as: Select correct option: Fixed costVariable costStep costSemi variable cost Semi Variable CostIt is also known as mixed cost. It is the cost which is part fixed and par variable. It is in fact the mixture of both behaviors.Examples include: Utility bills – there is a fixed line rent plus charges for units consumed.Salesman’s salary – there is a fixed monthly salary plus commission per units sold.
A cost centre is Select correct option: A unit of product or service in relation to which costs are ascertainedAn amount of expenidure attributable to an activityA production or service location,function,activity or item of equipment for which costs are accumulatedA centre for which an indvidual budget is drawn up Cost accounting department prepares ___________ that helps the in preparing final accounts.Select correct option:Cost sheetsCost of goods sold statementCost of production ReportMaterial requisition form
When FOH is under applied and charged to Net profit , the treatment would be:Select correct option:Under applied Add net profitUnder applied Less net profitUnder applied Less operating expenseNone of the given options A worker is paid Rs. 0.50 per unit and he produces 18 units in 7 hours. Keeping in view the piece rate system, the total wages of the worker would be:Select correct option:18 x 7 x 0.50 = Rs. 6318 x 0.50 = Rs. 918 x 7 = Rs. 1267 x 0.5 = Rs. 3.5 Units produced x Rate per unit. Weighted average cost per unit is calculated by which of the following formula?Select correct option:Cost of goods issued/number of units issuedTotal cost/total unitsCost of goods manufactured/closing unitsCost of goods sold/total units Weighted average rate per unit =Total Cost/Total Units Buyer produced 20,000 units and their total factory cost was Rs. 450,000,other cost like property tax on factory building was Rs. 10,000 included in that cost till year ended the cost of per unit would be:Select correct option: Rs.22.5Rs.23.5
Rs.24.5Rs.26.5 Cost per unit = Cost of goods manufactured / Number of units manufactured A standard rate is paid to the employee when he completed his job:Select correct option: In time less than the standardIn standard timeIn time more than standardBoth in standard time and more than the standard time Store incharge after receiving the material as per the goods received note, places the material at its location and makes an entry in_______ .Select correct option: Bin CardStore Ledger CardStock LedgerNone of the given options EOQ is a point where:Select correct option: Ordering cost is equal to carrying costOrdering cost is higher than carrying costOrdering cost is lesser than the carrying costTotal cost is maximum If opening inventory of material is Rs.20,000 and closing inventory is Rs. 40,000.the Average inventory amount will be:Select correct option: Rs. 40,000Rs. 30,000Rs. 20,000Rs. 10,000 Average Inventory= Opening Inventory + Closing Inventory/2 A company has calculated that volume variance for a given month was unfavorable. This could have been caused by which of the following factors?Select correct option: The number of rejected units was higher than normalMachine breakdowns were higher than normalDelays were experienced in the issuing of material to productionAll of the given options
PVC Company has ordering quantity 10,000 units. They have storage capacity 20,000 units, the average inventory would be:Select correct option: 20,0005,00010,00025,000 Average ordering quantity= Ordering Quantity/2 If, Gross profit = Rs. 40,000 GP Margin = 25% of sales What will be the value of cost of goods sold?Select correct option:Rs. 160,000Rs. 120,000Rs. 40,000Can not be determined Cost of goods sold= 40000 * .75 / .25 All Indirect cost is charged/record in the head ofSelect correct option: Prime costFOH costDirect labor costNone of the given options Under/Over applied FOH cost can be adjusted in which of the following:Select correct option: Entire ProductionCost of Good soldNet ProfitAll of given options The FIFO inventory costing method (when using a perpetual inventory system) assumes that the cost of the earliest units purchased is allocated in which of the following ways?Select correct option: First to be allocated to the ending inventoryLast to be allocated to the cost of goods soldLast to be allocated to the ending inventoryFirst to be allocated to the cost of good sold The danger Level can be calculated?Select correct option: Average consumption x Lead time to get urgent suppliesNormal consumption x Lead time to get urgent suppliesMaximum consumption x Lead time to get urgent supplies
Minimum consumption x Lead time to get urgent supplies Danger Level = Average consumption x Emergency time Which of the following is considered as basic systems of remunerating labor?Select correct option: Time rate systemPiece rate systemHalsey Premium planBoth time rate and piece rate system Which of the following is sales force payroll incentive?Select correct option: CommissionShift allowanceOver time paymentBonus Factory Over head cost includesSelect correct option: Factory RentProperty TaxSalaries of Factory ClerkAll of the given Which of the following cannot be used as a base for the determination of overhead absorption rate?Select correct option: Number of units producedPrime costConversion costDiscount Allowed Cost of goods sold Rs. 30, 000, opening Inventory Rs. 9, 000, Closing inventory Rs. 7,800.What was the inventory turnover ratio?Select correct option: 3.57 times3.67 times3.85 times5.36 times Inventory turnover ratio = Cost of goods sold/Average inventory FOH applied rate of Rs. 5.60 per machine hour. During the year the FOH to Rs.275,000 and 48,000 machine hours were used. Which one of following statement is correct?Select correct option: Overhead was under-applied by Rs.6,200
Overhead was over-applied by Rs.6,200Overhead was under-applied by Rs.7,200Overhead was over-applied by Rs.7,200 Cost accounting concepts include all of the following EXCEPT:Select correct option: PlanningControllingSharingCosting
__
__ are future costs that effect the current management decision. Select correct option:
Sunk CostStandard CostRelevant CostIrrelevant Cost Relevant Cost:Relevant cost is which changes with a change in decision. These are future costs that effect the current management decision.
Which of the following costs is part of the prime cost for manufacturing company?Select correct option:
Cost of transporting raw materials from the suppliers premisesWages of factory workers engaged in machine maintenanceDepreciation of truck used for deliveries to customersCost of indirect production materials
Direct material opening inventory add net purchases is calledSelect correct option:
Material consumedMaterial available for use
Total material purchasedMaterial ending inventory Which of the following is to be called product cost Select correct option:
Material cost Labor cost FOH cost All of the given options Which of the following cannot be used as a base for the determination of overhead absorption rate? Select correct option:
Number of units produced Prime cost Conversion cost Discount Allowed Predetermined (FOH cost) rateFactory overhead rate is determined on the basis of normal activity level. Normal activity level means the capacity level at which the business can operate in normal circumstances. Capacitylevel can be in terms of:Direct Labor CostDirect Material CostDirect Labor HoursMachine HoursPrime Cost Selection of capacity level depends upon the nature of the business, if its inclination is towards machine hours then machine hours will be taken as a base as capacity level. It is also known as overhead absorption rate (OAR). A Blanket Rate is: Select correct option:
A single rate which used throughout the organization departments A double rates which used throughout the organization departments A single rates which used in different departments of the organization None of the given options Blanket rates:A blanket absorption rate is a single rate of absorption used throughout an organization’s production facility and based upon its total production costs and activity.
A standard rate is paid to the employee when he completed his job: Select correct option:
In time less than the standard In standard time In time more than standard
Both in standard time and more than the standard time While deducting Income Tax from the gross pay of the employee, the employer acts as a (an) _________________for Income Tax Department. Select correct option:
Agent of his own Company Paid tax collection agent Unpaid tax collection agent None of the given options Gross pay less deductions represents all except: Select correct option:
Net pay Take home pay Total pay Other income Which of the following best describes the manufacturing costs? Select correct option:
Direct materials, direct labor and factory overhead Direct materials and direct labor Direct materials, direct labor, factory overhead, and administrative overhead Direct labor and factory overhead High labor turnover is NOT desirable because:Select correct option:
It denotes the instability of the labor forceIt is an indication of high labor costIt shows frequent changes in the labor forceAll of the given options Manufacturing entities classified the inventory in which of three kinds?Select correct option:
Material inventory,WIP inventory,Finished goods inventoryMaterial inventory,purchased good inventory,WIP inventoryMaterial inventory,purchased good inventory,Finished goods inventoryWIP inventory,Finished goods inventory,purchased good inventory Which of the following is correct for maximum level?Select correct option:
Reorder level – (Minimum consumption x Lead time) + EOQ(Maximum consumption x Lead time) – (Minimum consumption x Lead time) + EOQ[(Maximum consumption - Minimum consumption) Lead time]+ EOQAll of the given options
Inventory turnover ratio can be calculated as follow?Select correct option:
Cost of goods sold/Average inventoryGross profit/Average inventoryCost of goods sold/saleCost of goods sold/Gross profit Which of the following is an example of Statutory deductions:Select correct option:Deduction as Income TaxDeduction as social securitySubscriptions to a trade unionNone of the given Which of the following is indirect cost?Select correct option:
The depreciation of machineryThe overtime premium incurred at the specific request of a customerThe hire of tools for a specific jobAll of the given options The component of Factory overhead are as followSelect correct option:
Direct material + Indirect material + Direct expencesIndirect material + Indirect labor + Others indirect costDirect material + Indirect expences + Indirect laborDirect labor + Indirect labor + Indirect expences Which of the following best describes the manufacturing costs?Select correct option:
Direct materials, direct labor and factory overheadDirect materials and direct laborDirect materials, direct labor, factory overhead, and administrative overheadDirect labor and factory overhead Overtime that is necessary in order to fulfill customer orders is called:Select correct option:
Avoidable overtimeUnavoidable overtime
Premium OvertimeFlex time Overtime that is necessary in order to fulfill customer orders is unavoidable overtime. Where the applied FOH cost is greater than the actual FOH cost it is:Select correct option:
Unfavorable varianceFavorable varianceNormal varianceBudgeted variance The Process of cost apportionment is carried out so that: Select correct option:
Cost may be controlled Cost unit gather overheads as they pass through cost centers Whole items of cost can be charged to cost centers Common costs are shared among cost centers A company has calculated that volume variance for a given month was unfavorable. This could have been caused by which of the following factors? Select correct option:
The number of rejected units was higher than normal Machine breakdowns were higher than normal Delays were experienced in the issuing of material to production All of the given options Taylor's Differential Piece Rate Plan uses-----------piece rates. Select correct option:
Three Two Four Five The components of the prime cost are: Select correct option:
Direct Material + Direct Labor + Other Direct Cost Direct Labor + Other Direct Cost + FOH Direct Labor + FOH None of the given options A cost unit is Select correct option:
The cost per hour of operating a machine
The cost per unit of electricity consumed A unit of product or services in relation to which costs are ascertained A measure of work output in a standard hour Increase in material Inventory means: Select correct option:
The ending inventory is greater than opening inventory The ending inventory is less than opening inventory Both ending and opening inventories are equal Can not be determined
Working hours of labor can be calculated with the help of all except: Select correct option:
Smart card Time sheet Clock card Store card Amount of net purchase can be calculated as follow Select correct option:
Purchase of direct material add trade discount less purchase return add carriage inward less other material handling cost Purchase of direct material less trade discount l add purchase return add carriage inward less other material handling cost Purchase of direct material less trade discount less purchase return less carriage inward add other material handling cost Purchase of direct material less trade discount less purchase return add carriage inward add other material handling cost Which of the following costs is part of the prime cost for manufacturing company? Select correct option:
Cost of transporting raw materials from the suppliers premises Wages of factory workers engaged in machine maintenance Depreciation of truck used for deliveries to customers Cost of indirect production materials
All of the following are terms used to denote Factory Overheads EXCEPT: Select correct option:
Factory burden Factory expenses Manufacturing overhead Conversion costs Reduction of labor turnover, accidents, spoilage, waste and absenteeism are the results of which of the following wage plan? Select correct option:
Piece rate plan Time rate plan Differential plan
Group bonus system Costs which are constant for a relevant range of activity and rise to new constant level once that range exceeded is called: Select correct option:
A fixed cost A variable cost A mixed cost A step cost
Cost of goods sold can be calculated as follow Select correct option:
Cost of goods manufactured Add Opening finished goods inventory Less Closing finished goods inventory Cost of goods manufactured Less Opening finished goods inventory Less Closing finished goods inventory Cost of goods manufactured Less Opening finished goods inventory Add Closing finished goods inventory Cost of goods manufactured Add Opening finished goods inventory Add Closing finished goods inventory
Which of the following statement measures the financial position of the entity on particular time? Select correct option:
Income Statement Balance Sheet Cash Flow Statement Statement of Retained Earning Which of the following statement is correct regarding reasons of variance? Select correct option:
Difference between capacity level over which overhead absorption rate is calculated & capacity level attained. Difference between FOH cost budgeted or estimated over which overhead absorption rate and FOH actually incurred. Difference between the actual level which company achieved and budget level which company determined. All of the given Which of the following best describes piece rate system? Select correct option:
The increased volume of production results in decreased cost of production The increased volume of production in minimum time Establishment of fair standard rates Higher output is a result of efficient management
If, COGS = Rs. 70,000 GP Margin = 30% of sales What will be the value of Sales? Select correct option:
Rs. 200,000 Rs. 66,667
Rs. 100,000 Rs. 62,500
Sales =30000 *100% / 30% = Rs. 100,000 Cost of finished goods inventory is calculated by: Select correct option:
Multiplying units of finished goods inventory with the cost per unit Dividing units of finished goods inventory with the cost per unit Dividing per unit cost with finished goods inventory Deducting total cost from finished goods inventory Closing Finish Goods inventory = Closing finished goods units x cost per unit
Period costs are Select correct option:
Expensed when the product is sold Included in the cost of goods sold Related to specific Period Not expensed
Annual requirement is 7800 units; consumption per week is 150 units. Unit price Rs 5, order cost Rs 10 per order. Carrying cost Rs 1 per unit and lead time is 3 week, The Economic order quantity would be. Select correct option:
395 units300 units250 units150 units EOQ = √ 2xRUxOC/UC x CC% What will be the impact of normal loss on the overall per unit cost. Select correct option:
Per unit cost will increasePer unit cost will decreasePer unit cost remain unchangedNormal loss has no relation to unit cost Which of the following is true when piece rate system is used for wage determination? Select correct option:
worker is paid on the basis of time taken by him to perform the work worker is paid on the basis of production Piece rate system is more beneficial than a guaranteed minimum wage system
None of the given options Alpha company purchased a machine worth Rs 200,000 in the last year.Now that machine can be use in a new project which company has received this year. Now the cost of that machine is to be called: Select correct option:
Project cost Sunk cost Opportunity cost Relevant cost FOH absorption rate is calculated by the way of Select correct option:
Estimated FOH Cost/Direct labor hours Estimated FOH Cost/No of units produced Estimated FOH Cost/Prime Cost All of the given options Which of the following is/are not associated with ordering costs? Select correct option:
Interest Insurance Opportunity costs All of the given options A company has calculated that volume variance for a given month was unfavorable. This could have been caused by which of the following factors? Select correct option:
The number of rejected units was higher than normal Machine breakdowns were higher than normal Delays were experienced in the issuing of material to production All of the given options Merrick Differential Piece Rate System: Select correct option:
worker is not penalized even if his performance does not exceed 80 per cent of the High Task. worker is not penalized even if his performance does not exceed 70 per cent of the High Task. worker is not penalized even if his performance does not exceed 50 per cent of the High Task. worker is not penalized even if his performance does not exceed 30 per cent of the High Task An organistation sold units 4000 and have closing finished goods 3500 units and opening finished goods units were 1000.The quantity of unit produced would be: Select correct option:
7500 units 6500 units 4500 units 8500 units The Hino Corporation has a breakeven point when sales are Rs. 160,000 and variable costs atthat level of sales are Rs. 100,000. How much would contribution margin increase or decrease, ifvariable expenses dropped by Rs. 20,000?37.5%. 60%.12.5%.26%Sales=160,000VC=100,000CM=60,000Contribution to sales ratio (C/S ratio) =Contribution Margin in Rs/Sales in Rs60,000/160,000=0.3750.375*100=37%New VC=80,000, Sales=160,000 CM=80,000Contribution to sales ratio (C/S ratio) =Contribution Margin in Rs/Sales in Rs80,000/160,000=0.5=50%Rise in CM=(37.5-50)=12.5
Buyer produced 20,000 units and their total factory cost was Rs. 450,000,other cost like property tax on factory building was Rs. 10,000 included in that cost till year ended the cost of per unit would be: Rs.22.5Rs.23.5Rs.24.5Rs.26.5 The abbreviation LIFO is: Large integrated financial organizationLeast interesting financial optionThe last in first out methodNone of the given options Amount of net purchase can be calculated as follow Purchase of direct material add trade discount less purchase return add carriage inward less other material handling costPurchase of direct material less trade discount add purchase return add carriage inward less other material handling costPurchase of direct material less trade discount less purchase less carriage inward add other material handling costPurchase of direct material less trade discount less purchase return add carriage inward add other material handling cost Cost accounting department prepares_______that helps the in preparing final accounts. Cost sheetsCost of goods sold statementCost of production ReportMaterial requisition form Opportunity cost is the best example of: Sunk CostStandard CostRelevant CostIrrelevant Cost Which of the following items of expense are to be add in FOH cost: Rent of factory + Head office rent + salaries of factory watchmanRent of factory + factory lighting bill + directors salariesRent of factory + factory lighting bill + factory employees salariesHead office rent + factory property tax + factory small tools The components of factory overhead are as follows: Direct material + Indirect material + Direct expencesIndirect material + Indirect labor + Others indirect costDirect material + Indirect expences + Indirect laborDirect labor + Indirect labor + Indirect expences Factory Overhead include:
1. Indirect materials2. Indirect labor and3. Indirect costs attributable to production and the service activities associated with manufacturing. Net sales=Sales less: Sales returnsSales discountsSales returns & allowancesSales return & allowances and sales discount Closing work in process inventory of last year: Is treated as opening inventory for current yearIs not carried forward to next yearBecome expense in the nest yearChange to profit & Loss account The term Maximum level represents: The maximum stock level indicates the maximum quantity of an item of material which can be held in stock at any time.The maximum stock level indicates the maximum quantity of an item of material which cannot be held in stock at any time.The average stock level indicates the maximum quantity of an item of material which can be held in stock at any time.The available stock level indicates the maximum quantity of an item of material which can be held in stock at any time. Which of the following statement measures the financial position of the entity on particular time? Income statementBalance sheetCash Flow statementStatement of Retained earning The supervisor salary is treated as: Direct labor costIndirect labor coatConversion costNone of the given options Indirect Cost Examples include:Wages of supervisor, cleaning material and workshop insurance. The main purpose of cost accounting is to: Maximize profitsHelp inventory valuationProvide information to management for decision makingAid in the fixation of selling price An organization sold units 4000 and have closing finished goods 3500 units and opening finished goods units were 1000. The quantity of unit produced would be:
7500 units6500 units4500 units8500 units. Units produced = Units sold + Closing finished goods units - Opening finished goods units Q.1) Cost is expenditure incurred. A. TRUE B. FALSEQ.2) Accounting has ____________ branches A. 1 B. 2 C. 3 D. 4Q.3) Cost that can be traced in full to the product or services is called A. Direct Cost B. Indirect CostQ.4) Direct Material + Direct Labor + other direct cost = A. Prime Cost B. Factory OverHead (FOH) C. Conversion Cost D. None
Q.5) A firm Uses its own capital or Uses its owner's time and/or financial resources both are examples of ____________ A. Implicit Cost B. Explicit Cost
ExplanationA cost that is represented by lost opportunity in the use of a company's own resources, excluding cashThese are intangible costs that are not easily accounted for. For example, the time and effort that an owner puts into the maintenance of the company rather than working on expansion
Q.6) accounting is always a language of business A. TRUE B. FALSEQ.7) If Direct Material = 12,000
Direct Labor = 8000 other Direct Cost = 2000 then what will be the Prime Cost?
C. 20000 D. 22000Q.8) Financial Accounting is a branch of management accounting.
A. TRUE B. FALSEQ.9) _________________ is a Predetermine cost of the units. A. Standard cost (correct answer) B. Implicit Cost C. Product Cost D. None
ExplanationThe budgeted or planned cost of material, labour, or overheads expected to be paid during a given accounting period.
standard cost- The normal or specified cost used as the basis for measurement against an actual. Standard costs for manufactured items include labor, material and overhead, and vendor acquisition, freight, duty fees and other categories for purchased items.
Q.10) Wage, Rent & Materials are examples of ____________. A. Implicit Cost B. Explicit Cost
ExplanationA business expense that is easily identified and accounted for. Explicit costs represent clear, obvious cash outflows from a business that reduce its bottom-line profitability. This contrasts with less-tangible expenses such as goodwill amortization, which are not as clear cut regarding their effects on a business's bottom-line valueGood examples of explicit costs would be items such as wage expense, rent or lease costs, and the cost of materials that go into the production of goods. With these expenses, it is easy to see the source of the cash outflow and the business activities to which the expense is attributed
Q.11) An investor invests in stock exchange he foregoes the opportunity to invest further in his hotel. The profit which the investor will be getting
from the hotel is _________________. A. opportunity cost B. Period Cost C. Product Cost D. Historical Cost
Explanation1. The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.
2. The difference in return between a chosen investment and one that is necessarily passed up. Say you invest in a stock and it returns a paltry 2% over the year. In placing your money in the stock, you gave up the opportunity of another investment - say, a risk-free government bond yielding 6%. In this situation, your opportunity costs are 4% (6% - 2%)
Q.12) Cost is classified in _____________ categories.
A. 1 B. 2 C. 3 D. 4Q.13) Cost Accounting is an art of Recording , Classifying, summarizing, Reporting, Interpreting of the Financial Information. A. TRUE B. FALSEQ.14) Management Accounting deals with Ascertainment, Measurement, Accumulation, Budgeting & Evaluating cost structure of the entity. A. True B. FALSE
ExplanationIts done by Cost Accounting
Q.15) Accounting is a language of ________________. A. Accountants B. Mathematics C. Mathematics D. NONEQ.16) _________________ is the cost that is subject to actual payment or will be paid for in future. A. Implicit Cost B. Explicit Cost
ExplanationA business expense that is easily identified and accounted for. Explicit costs represent clear, obvious cash outflows from a business that reduce its bottom-line profitability. This contrasts with less-tangible expenses such as goodwill amortization, which are not as clear cut regarding their effects on a business's bottom-line valueGood examples of explicit costs would be items such as wage expense, rent or lease costs, and the cost of materials that go into the production of goods. With these expenses, it is easy to see the source of the cash outflow and the business activities to which the expense is attributed.
Q.17) Indirect cost is also known as overhead cost. A. True B. False
ExplanationIndirect Cost/Overhead CostAn indirect cost or overhead cost is a cost that is incurred in the course of producing product or rendering service, but which cannot be traced in the product or service in full.Expenditure incurred on labor, material or other services which cannot be economically identifiedwith a specific cost product or service (cost unit).Examples include: Wages of supervisor, cleaning material, workshop insurance
Q.18) Direct Labour + Other Direct Cost + FOH = A. Prime Cost B. Factory OverHead (FOH) C. Conversion Cost D. NoneQ.19) ____________ is verifiable through invoices/agreements.
A. Opportunity Cost B. Product Cost C. Period Cost D. Historical CostQ.20) Cost Accounting deals with decisions relating to the generation & effective utilization of the financial resources of an entity. A. TRUE B. FALSE
worker is not penalized even if his performance does not exceed 80 per cent of the High Task.worker is not penalized even if his performance does not exceed 70 per cent of the High Task.worker is not penalized even if his performance does not exceed 50 per cent of the High Task.worker is not penalized even if his performance does not exceed 30 per cent of the High Task.
2 Which of the following statement measures the financial position of the entity on particular time?Select correct option:Income StatementBalance Sheet Cash Flow StatementStatement of Retained Earning
Generally, the danger level of stock is fixed ________ the minimum level.Below
Above EqualDanger level has no relation to minimum level
The Process of cost apportionment is carried out so that:Select correct option:Cost may be controlledCost unit gather overheads as they pass through cost centersWhole items of cost can be charged to cost centersCommon costs are shared among cost centers The appropriate journal entry to transfer the cost of completed units from the Work in Process account would involve a credit to Work in Process and a debit to which of the following accounts?
Which of the following is/are reported in production cost report?Select correct option:The costs charged to the departmentHow the costs were assigned to the output?The equivalent units of production by the departmentAll of the given options (not 100% sure) 8 Direct materials cost is Rs. 80,000. Direct labor cost is Rs. 60,000. Factory overhead is Rs. 90,000. Beginning goods in process were Rs. 15,000. The cost of goods manufactured is Rs. 245,000. What is the cost assigned to the ending goods in process?Select correct option:Rs. 45,000Rs. 15,000Rs. 30,000There will be no ending Inventory
Solution:Direct Material ---- 80,000 (Given)Direct labor ------- 60,000 (Given)FOH -------------- 90,000 (Given)Open WIP------- 15,000Total 245000 (cost of goods manufactured is also 245000 so balance is zero)
Sales are Rs. 450,000. Beginning finished goods were Rs. 23,000. Ending finished goods are Rs. 30,000. The cost of goods sold is Rs. 300,000. What is the cost of goods manufactured?Select correct option:Rs. 323,000Rs. 330,000Rs. 293,000None of the given options
Under Periodic Inventory system Purchase of inventory is treared as:Assets
ExpenseIncomeLiability
When prices are rising over time, which of the following inventory costing methods will result in the lowest gross margin/profits?Select correct option:FIFOLIFOWeighted AverageCannot be determined The main difference between the profit center and investment center is:Select correct option:Decision makingRevenue generationCost in currenceInvestment
Which of the following is a characteristic of process cost accounting system?Select correct option:Material, Labor and Overheads are accumulated by ordersCompanies use this system if they process custom ordersOpening and Closing stock of work in process are related in terms of completed unitsOnly Closing stock of work in process is restated in terms of completed unitsReference
The Inventory Turn over ration is 5 times and numbers of days in a year is 365.Inventory holding period in days would beSelect correct option:100 days73 days50 days10 days
15 Which of the following manufacturers is most likely to use a job order cost accounting system?Select correct option:A soft drink producerA flour mill A textile millA builder of offshore oil rigs
(see page # 131 of handouts (pdf file) under "Examples of industries using process costing include". Bottling, flour, textile industries will use process costing, so the last option "A builder of offshore oil rigs" should be correct as this industry will use job order)
Which of the following is a point of differentiation between blanket rates and department rates? Select correct option:
Blanket rate is a single overhead rate established for the entire factory
Department rates are separate overhead rates for all departments of factory through which the products pass
Department rate is a single overhead rate established for the entire factory
Blanket rates are separate overhead rates for all departments of factory through which the product passes Production volume of 1,200 units cost incurred Rs. 10,000 and production volume of 1,400 units cost incurred Rs.20, 000. The variable cost per unit would be? Select correct option:
Rs. 50.00 per unit
Rs. 8.33 per unit
Rs. 14.20 per unit
Rs. 100 per unit
(I got confused in this question, what I'm getting:variable cost per unit = total variable cost/total number of units produced
one solution could be;in producing 1200 units, total cost incurred was 10000, andin producing 1400 units, total cost incurred was 20000
1400 - 1200 = 200 units20000 - 10000 = 10000 cost
which means when we produced 1200 units the total cost was 10000 but when we increased production to 1400 units, the total cost increased to 20000, so the difference (20000 - 10000 = 10000) should be of variable costnow by dividing "total variable cost by quantity" i.e, 10000/200 = 50 per unit
but the confusion is in order to get variable cost per unit, we divide total variable cost by total number of units produced, and total number of units in the above MCQ seems to be 1400. if we divide 10000/1400 = 7.14 which is not in the optionsif we divide 10000/2600 = 3.84 (not there in the options)
so i guess 50 per unit might be a correct answer. but please if anyone know about this question, kindly explain it
Cost accounting concepts include all of the following EXCEPT: Select correct option:
Planning
Controlling
Sharing (see page # 10, this is the same MCQ on page # 10 of handouts)
Costing
The main purpose of cost accounting is to Select correct option:
Maximize profits
Help in inventory valuation
Provide information to management for decision making (again the same MCQ is on handouts page # 9)
Aid in the fixation of selling price
Over applied FOH will always result when a predetermined FOH rate is applied and:
Production is greater than defined capacity
Actual overhead costs are less than budgeted overhead
Budgeted capacity is less than normal capacity
Actual overhead incurred is less than applied Overhead
A spending variance for factory overhead is the difference between actual factory overhead cost and factory overhead cost that should have been incurred for actual hours worked and results from:
Price difference of FOH costs
Quantity differences of FOH costs
Price and quantity differences for FOH costs
Difference caused by production volume variations
Period costs are Expensed when the product is sold
Included in the cost of goods sold
Related to specific Period
Not expensed The cost of goods sold was Rs. 240,000. Beginning and ending inventory balances were Rs. 20,000 and Rs. 30,000, respectively. What was the inventory turnover?
If opening inventory of material is Rs.20,000 and closing inventory is Rs. 40,000.the Average inventory amount will be:
Rs. 40,000Rs. 30,000 Rs. 20,000Rs. 10,000
Which of the following is/are reported in production cost report?
The costs charged to the departmentHow the costs were assigned to the output?The equivalent units of production by the departmentAll of the given options
An organistation sold units 4000 and have closing finished goods 3500 units and opening finished goods units were 1000.The quantity of unit produced would be:
7500 units6500 units4500 units8500 units
Solution:Number of units manufactured/produced = units sold + closing balance of finished goods units - opening balance of finished goods unitsnumber of units produced/manufactured = 4000 + 3500 - 1000 = 6500 Where the applied FOH cost is less than the actual FOH cost it is: Unfavorable varianceFavorable varianceNormal varianceBudgeted variance
Examples of industries that would use process costing include all of the following EXCEPT:
Beverages Food Hospitality Petroleum The flux method of labor turnover denotes:
Workers appointed against the vacancy caused due to discharge or quitting of the organizationWorkers appointed in replacement of existing employeesWorkers employed under the expansion schemes of the companyThe total change in the composition of labor force
The flux method of labor turnover denotes the total change in the composition of labor force.While replacement method takes into account only
workers appointed against the vacancy caused due to discharge or quitting of the organisation.
A worker is paid Rs. 0.50 per unit and he produces 18 units in 7 hours. Keeping in view the piece rate system, the total wages of the worker would be: Select correct option:
18 x 7 x 0.50 = Rs. 6318 x 0.50 = Rs. 918 x 7 = Rs. 1267 x 0.5 = Rs. 3.5 All of the following are essential requirements of a good wage system EXCEPT:Select correct option:Reduced overhead costsReduced per unit variable costIncreased productionIncreased operating costs The components of the prime cost are:Select correct option:Direct Material + Direct Labor + Other Direct CostDirect Labor + Other Direct Cost + FOHDirect Labor + FOHNone of the given options If, Gross profit = Rs. 40,000 GP Margin = 25% of sales What will be the value of cost of goods sold?Select correct option:Rs. 160,000Rs. 120,000Rs. 40,000Can not be determined Opportunity cost is the best example of:Select correct option:Sunk CostStandard CostRelevant CostIrrelevant Cost Which of the following is an example of Statutory deductions:Select correct option:Deduction as Income TaxDeduction as social securitySubscriptions to a trade unionNone of the given By useing table method where---------------- is equal, that point is called Economic order quanity.Select correct option:Ordering cost
Carrying costOrdering and carrying costPer unit order cost Which of the following statement is TRUE about FOH applied rates?Select correct option:They are used to control overhead costsThey are based on actual data for each periodThey are predetermined in advance for each periodNone of the given Annual requirement is 7800 units; consumption per week is 150 units. Unit price Rs 5, order cost Rs 10 per order. Carrying cost Rs 1 per unit and lead time is 3 week, The Economic order quantity would be:Select correct option:395 units300 units250 units150 units Period costs areSelect correct option: Expensed when the product is soldIncluded in the cost of goods soldRelated to specific PeriodNot expensed
Question # 1 of 15 ( Start time: 12:23:43 PM ) Total M a r k s: 1A store ledger card is similar to the ________ .Select correct option:Stock ledgerBin cardMaterial cardPurchase requisition card
Question # 2 of 15 ( Start time: 12:28:02 PM ) Total M a r k s: 1Cost of goods sold Rs. 30,000, opening Inventory Rs. 9,000,Closing inventory Rs. 7,800.What was the inventory turnover ratio?Select correct option:
3.57 times3.67 times3.85 times5.36 times
Inventory turnover ratio = Cost of goods sold / Average inventory30,000/((9000+7000)/2) = 3.57
Question # 3 of 15 ( Start time: 12:29:34 PM ) Total M a r k s: 1
Opportunity cost is the best example of:Select correct option:
Relevant CostRelevant cost is which changes with a change in decision. These are future costs that effect thecurrent management decision.Examples Variable cost Fixed cost which changes with in an alternatives Opportunity cost Question # 4 of 15 ( Start time: 12:31:06 PM ) Total M a r k s: 1Cost of Goods Manufactured can be calculated as followSelect correct option:
Total factory Cost Add Opening Work in process inventory Less Closing Work in process inventoryTotal factory Cost Less Opening Work in process inventory Add Closing Work in process inventoryTotal factory Cost Less Opening Work in process inventory Less Closing Work in process inventoryTotal factory Cost Add Opening Work in process inventory Add Closing Work in process inventory
Question # 5 of 15 ( Start time: 12:32:03 PM ) Total M a r k s: 1A cost centre isSelect correct option:
A unit of product or service in relation to which costs are ascertainedAn amount of expenditure attributable to an activityA production or service location, function, activity or item of equipment for which costs are accumulatedA centre for which an individual budget is drawn up
Question # 6 of 15 ( Start time: 12:32:44 PM ) Total M a r k s: 1__________ is the time worked over and above the employee's basic working week.Select correct option:
Flex timeOvertimeShift allowanceCommission
Question # 7 of 15 ( Start time: 12:33:13 PM ) Total M a r k s: 1Closing work in process Inventory of last year:Select correct option:
Is treated as Opening inventory for current yearIs not carried forward to next yearBecome expense in the next yearCharge to Profit & Loss account
Question # 8 of 15 ( Start time: 12:33:38 PM ) Total M a r k s: 1In furniture manufacturing use of nail, pins, glue, and polish which use to increase its esteem value that cost is treated as:
Select correct option:Direct material costIndirect material cost
FOH costPrime cost
Question # 9 of 15 ( Start time: 12:34:51 PM ) Total M a r k s: 1Increase in material Inventory means:Select correct option:
The ending inventory is greater than opening inventoryThe ending inventory is less than opening inventoryBoth ending and opening inventories are equalCan not be determined
Question # 10 of 15 ( Start time: 12:35:28 PM ) Total M a r k s: 1Direct materials cost is Rs. 80,000. Direct labor cost is Rs. 60,000. Factory overhead is Rs. 90,000. Beginning goods in process were Rs. 15,000. The cost of goods manufactured is Rs. 245,000. What is the cost assigned to the ending goods in process?Select correct option:
Question # 15 of 15 ( Start time: 12:40:04 PM ) Total M a r k s: 1If, COGS = Rs. 70,000 GP Margin = 30% of sales What will be the value of Sales?Select correct option:
Rs. 200,000Rs. 66,667Rs. 100,000Rs. 62,500
Question # 1 of 15 ( Start time: 11:45:23 PM ) Total M a r k s: 1 Which of the following is / are element / s of production payroll? Select correct option: Direct labor force wages Administrative wages Selling wages All of the given options (Correct) Question # 2 of 15 ( Start time: 11:46:47 PM ) Total M a r k s: 1 The compnent of Factory overhead are as follow Select correct option: Direct material + Indirect material + Direct expences Indirect material + Indirect labor + Others indirect cost (Correct)Direct material + Indirect expences + Indirect labor Direct labor + Indirect labor + Indirect expences11:47 AM Question # 3 of 15 ( Start time: 11:48:10 PM ) Total M a r k s: 1 While deducting Income Tax from the gross pay of the employee, the employer acts as a (an) _________________for Income Tax Department. Select correct option: Agent of his own Company Paid tax collection agent Unpaid tax collection agent (Correct)None of the given options Question # 4 of 15 ( Start time: 11:49:06 PM ) Total M a r k s: 1 Loss by fire is an example of: Select correct option: Normal Loss (Correct)Abnormal Loss Incremental Loss Can not be determined Question # 5 of 15 ( Start time: 11:50:27 PM ) Total M a r k s: 1 What will be the impact of normal loss on the overall per unit cost? Select correct option:
Per unit cost will increase (Correct)Per unit cost will decrease Per unit cost remain unchanged Normal loss has no relation to unit cost Question # 6 of 15 ( Start time: 11:51:51 PM ) Total M a r k s: 1 The flux method of labor turnover denotes: Select correct option: Workers appointed against the vacancy caused due to discharge or quitting of the organization Workers appointed in replacement of existing employees Workers employed under the expansion schemes of the company The total change in the composition of labor force (Correct) Question # 7 of 15 ( Start time: 11:52:29 PM ) Total M a r k s: 1 Which of the following element must be taken into account while calculating total earnings of a worker under different incentive wage schemes? Select correct option: Rate per unit Units of production (Correct)Extra time taken by employee to complete the production Number of workers employed Question # 8 of 15 ( Start time: 11:52:59 PM ) Total M a r k s: 1 A worker is paid Rs. 0.50 per unit and he produces 18 units in 7 hours. Keeping in view the piece rate system, the total wages of the worker would be: Select correct option: 18 x 7 x 0.50 = Rs. 63 18 x 0.50 = Rs. 9 (Correct)18 x 7 = Rs. 126 7 x 0.5 = Rs. 3.5 Question # 9 of 15 ( Start time: 11:53:23 PM ) Total M a r k s: 1 Merrick Differential system uses--------- rates. Select correct option: Two Three (Correct)Four Five Question # 10 of 15 ( Start time: 11:53:49 PM ) Total M a r k s: 1 Which of the following statement is correct regarding reasons of variance? Select correct option:
Difference between capacity level over which overhead absorption rate is calculated & capacity level attained. (Correct)Difference between FOH cost budgeted or estimated over which overhead absorption rate and FOH actually incurred. Diffrence between the actual level which company achived and budget level which company determined. All of the given Question # 11 of 15 ( Start time: 11:54:30 PM ) Total M a r k s: 1 Which of the following best describes piece rate system? Select correct option: The increased volume of production results in decreased cost of production The increased volume of production in minimum time (Correct)Establishment of fair standard rates Higher output is a result of efficient management Question # 12 of 15 ( Start time: 11:55:16 PM ) Total M a r k s: 1 The danger Level can be calculated ? Select correct option: Average consumption x Lead time to get urgent supplies Normal consumption x Lead time to get urgent supplies Maximum consumption x Lead time to get urgent supplies Minimum consumption x Lead time to get urgent supplies (Correct) Question # 13 of 15 ( Start time: 11:55:58 PM ) Total M a r k s: 1 Weighted average cost per unit is calculated by which of the following formula? Select correct option: Cost of goods issued/number of units issued Total cost/total units (Correct)Cost of goods manufactured/closing units Cost of goods sold/total units Question # 14 of 15 ( Start time: 11:56:46 PM ) Total M a r k s: 1 Factory Over head cost includes Select correct option: Factory Rent Property Tax Salaries of Factory Clerk All of the given (Correct) Question # 15 of 15 ( Start time: 11:57:29 PM ) Total M a r k s: 1 Store incharge after receiving the material as per the goods received note, places the material at its location and makes an entry in_______ . Select correct option: Bin Card (Correct)Store Ledger Card
Stock Ledger None of the given options
MGT402 Online Quiz Lec(128)solved by Marina khan
Alpha company purchased a machine worth Rs 200,000 in the last year.Now that machine can be use in a new project which company has received this year. Now the cost of that machine is to be called:Select correct option:Project costSunk costOpportunity costRelevant cost Inventory turnover ratio can be calculated as follow?Select correct option:Cost of goods sold/Average inventoryGross profit/Average inventoryCost of goods sold/saleCost of goods sold/Gross profit Which of the following is a characteristic of process cost accounting system?Select correct option:Material, Labor and Overheads are accumulated by ordersCompanies use this system if they process custom ordersOpening and Closing stock of work in process are related in terms of completed unitsOnly Closing stock of work in process is restated in terms of completed units Byer produced 20,000 units and their total factory cost was Rs. 450,000,other cost like property tax on factory bulding was Rs. 10,000 included in that cost till year ended the cost of per unit would be:Select correct option:Rs.22.5Rs.23.5
Rs.24.5Rs.26.5 If a predetermined FOH rate is not applied and the volume of production is reduced from the planned capacity level, the cost per unit expected to:Select correct option:Remain unchanged for fixed cost and increase for variable costIncrease for fixed cost and remain unchanged for variable costIncrease for fixed cost and decrease for variable costDecrease for both fixed and variable costs Which of the following loss is expected in manufacturing process and represents a necessary cost of processing the marketable units?Select correct option:Operating lossAbnormal lossNormal lossExtraordinary loss In order to ensure efficient functioning of the stores department and steady flow of materials to the production departments, the restocking of stores is duty of:Select correct option:ManagersStorekeeperProduction In chargeSales supervisor In the process costing when labor is charged to production department I. What would be the journal entry Passed?Select correct option:Payroll a/c To W.I.P (DeptI)Payroll a/c To W.I.P (DeptII)W.I.P (DeptI) To Payroll a/cW.I.P (DeptII) To Payroll a/c
MGT402 Solved MCQs from new quizzes 25/6/2010solved by Marina khan
In cost Accounting, abnormal loss is charged to: Select correct option:
Factory overhead control account Work in process account Income Statement Entire production Cost of goods sold can be calculated as follow Select correct option:
Cost of goods manufactured Add Opening finished goods inventory Less Closing finished goods inventory Cost of goods manufactured Less Opening finished goods inventory Less Closing finished goods inventory Cost of goods manufactured Less Opening finished goods inventory Add Closing finished goods inventory Cost of goods manufactured Add Opening finished goods inventory Add Closing finished goods inventory
PVC company has ordering quantity 10,000 units.They have storage capacity 20,000 units,The average inventory would be: Select correct option:
20,000 5,000 10,000 25,000 Question # 13 of 15 ( Start time: 09:44:32 PM ) Total M a r k s: 1 In cost Accounting, abnormal loss is charged to: Select correct option:
Factory overhead control account Work in process account Income Statement Entire production Which of the following best describes piece rate system? Select correct option:
The increased volume of production results in decreased cost of production The increased volume of production in minimum time Establishment of fair standard rates Higher output is a result of efficient management
A high inventory turnover may indicate: Select correct option:
An efficient use of the investment in inventory A high risk of stockouts Stock position of store room All of the given options Question # 10 of 15 ( Start time: 09:40:57 PM ) Total M a r k s: 1 If, Gross profit = Rs. 40,000 GP Margin = 25% of sales What will be the value of cost of goods sold? Select correct option:
Rs. 160,000 Rs. 120,000 Rs. 40,000 Can not be determinedWhich of the following is the best characteristic of a by product:Select correct option: Is produced from material that would otherwise be of no value Has a lower selling price than the main product Is created along with the main product, but its sales value does not cover its production cost Usually produces a smaller amount of revenue than the main product Net Income before Interest and tax is also called:Select correct option: Operating Income/Profit Gross Profit Marginal Income Other Income Cost of goods sold Rs. 30,000,opening Inventory Rs. 9,000,Closing inventory Rs. 7,800.What was the inventory turnover ratio?Select correct option: 3.57 times 3.67 times 3.85 times 5.36 times Factory Over head cost includesSelect correct option:
Factory Rent Property Tax Salaries of Factory Clerk All of the given A Blanket Rate is:Select correct option: A single rate which used throughout the organisation departments A double rates which used throughout the organisation departments A single rates which used in different departments of the organisation None of the given options When FOH is under applied and charged to Net profit , the treatment would be:Select correct option: Under applied Add net profit Under applied Less net profit Under applied Less operating expense None of the given options Which of the following statements is/are correct?Select correct option: A byproduct is a product produced at the same time as other products which has a relatively low volume compared with the other products. Since a byproduct is a saleable item it should be separately costed in the process account,and should absorb some of the process costs. Cost incurred prior to the point of separation are known as common or joint costs. A byproduct is a product produced at the same time as other products which has a relatively high volume compared with the other products. Which of the following cost is used in the calculation of cost per unit?Select correct option: Total production cost Cost of goods available for sales Cost of goods manufactured Cost of goods Sold Merrick Differential system uses rates.Select correct option: Two Three Four Five
Which of the following is considered as basic systems of remunerating labor?Select correct option: Time rate system Piece rate system Halsey Premium plan Both time rate and piece rate system All of the following are essential requirements of a good wage system EXCEPT:Select correct option: Reduced overhead costs Reduced per unit variable cost Increased production Increased operating costs In comparing common cost and joint cost:Select correct option: The terms can be correctly used interchangeably Both have the same objective of assigning production cost to cost center They differ since common cost products or services have been obtained separately Common cost is sometime used as Joint cost Cost of goods sold can be calculated as follow Select correct option:
Cost of goods manufactured Add Opening finished goods inventory Less Closing finished goods inventory Cost of goods manufactured Less Opening finished goods inventory Less Closing finished goods inventory Cost of goods manufactured Less Opening finished goods inventory Add Closing finished goods inventory Cost of goods manufactured Add Opening finished goods inventory Add Closing finished goods inventory If opening inventory of material is Rs.20,000 and closing inventory is Rs. 40,000.the Average inventory amount will be: Select correct option:
Rs. 40,000 Rs. 30,000 Rs. 20,000 Rs. 10,000 www.vuzs.netFOH absorption rate is calculated by the way of Select correct option:
Estimated FOH Cost/Direct labor hours Estimated FOH Cost/No of units produced Estimated FOH Cost/Prime Cost All of the given options If a predetermined FOH rate is not applied and the volume of production is reduced from the planned capacity level, the cost per unit expected to: Select correct option:
Remain unchanged for fixed cost and increase for variable cost Increase for fixed cost and remain unchanged for variable cost Increase for fixed cost and decrease for variable cost Decrease for both fixed and variable costs If, COGS = Rs. 50,000 GP Margin = 25% of sales What will be the value of Sales? Select correct option:
Rs. 200,000 Rs. 66,667 Rs. 62,500 None of the given options
Which of the following is/are reasons of abnormal loss? Select correct option:
Defective material used Machine breakdown Poor workmanships All of the given Which of the following cannot be used as a base for the determination of overhead absorption rate? Select correct option:
Number of units produced Prime cost Conversion cost Discount Allowed In comparing common cost and joint cost: Select correct option:
The terms can be correctly used interchangeably Both have the same objective of assigning production cost to cost center They differ since common cost products or services have been obtained separately Common cost is sometime used as Joint cost All of the following are cases of labor turnover EXCEPT: Select correct option:
Workers appointed against the vacancy caused due to discharge or quitting of the organization Workers employed under the expansion schemes of the company The total change in the composition of labor force Workers retrenched ________ is the time worked over and above the employee's basic working week.
Flex time Overtime Shift allowance Commission Weighted average cost per unit is calculated by which of the following formula? Select correct option:
Cost of goods issued/number of units issued Total cost/total units Cost of goods manufactured/closing units Cost of goods sold/total units Jones, Industries uses process costing system. In October, the finishing department had 30,000 units in beginning workinprocess, 45,000 units in ending inventory and had 95,000 units transferred in from the previous department. Material is added at the end of the process and conversion costs are added uniformly throughout the process. Beginning workinprocess was 20% complete with respect to conversion costs; ending inventory was 40% complete with respect to conversion costs. If Jones uses weighted average, the equivalent units of production for transferredin costs, direct material and conversion costs are: Select correct option:
Material 125,000 units Conversion cost 45,000 units Material 125,000 units Conversion cost 98,000 units
Material 125,000 units Conversion cost 18,000 units Material 125,000 units Conversion cost 80,000 units Units completed as per material are 100% opening + closing 95,000 + 30,000 1, 25,000 The flux method of labor turnover denotes: Select correct option:
Workers appointed against the vacancy caused due to discharge or quitting of the organization Workers appointed in replacement of existing employees Workers employed under the expansion schemes of the company The total change in the composition of labor force The flux method of labor turnover denotes the total change in the composition of labor force.While replacement method takes into account only workers appointed against the vacancy caused due to discharge or quitting of the organization. Taylor's Differential Piece Rate Plan usespiece rates. Select correct option:
Three Two Four Five Closing work in process Inventory of last year: Select correct option:
Is treated as Opening inventory for current year Is not carried forward to next year Become expense in the next year Charge to Profit & Loss account The Term Mimimum Level Represents. Select correct option:
This represents the quantity below which the stock of any item should not be allowed to fall This represents the quantity below which the stock of any item should be allowed to fall
This is the estimated time period in number of days or in weeks or in months. This is the Lead time period in number of days or in weeks or in months. Taking steps for the fresh purchase of those stocks which have been exhausted and for which requisitions are to be honored in future” is an easy explanation of:Select correct option:
OverstockingUnder stockingReplenishment of stockAcquisition of stock Replenishment of stock therefore implies as ‘taking steps for the fresh purchase of those stocks which have been exhausted and for which requisitions are to be honored in future’.(P#50) When 10,000 ending units of workinprocess are 30% completed as to conversion, it means:Select correct option:
30% of the units are completed70% of the units are completedEach unit has been completed to 70% of its final stageEach of the unit is 30% completed What will be the impact of normal loss on the overall per unit cost?Select correct option:
Per unit cost will increasePer unit cost will decreasePer unit cost remain unchangedNormal loss has no relation to unit cost Reference:(Lesson 10) All of the following are essential requirements of a good wage system EXCEPT:Select correct option:
Reduced overhead costsReduced per unit variable cost
Increased productionIncreased operating costs Reference: (Page # 82) Which of the following is called Non Statutory deductions:Select correct option:
Subscriptions to a trade unionContributions by the employee to a pension schemeContributions by the employer to a pension schemeAll of the given Costs which are constant for a relevant range of activity and rise to new constant level once that range exceeded is called:Select correct option:
A fixed costA variable costA mixed costA step cost Wright Company had, at the beginning of 2001, a work in process of 10,000 units. During 2001, 57,500 additional units were started into production. Ending work in process on December 31, 2001, was 7,500 units. The beginning work in process was 100% complete as to direct materials and 75% complete as to conversion costs. The ending work in process was 100% complete as to direct materials and 50% complete as to conversion costs. Total direct material put into process cost Rs. 57,500. Total conversion cost put into process cost Rs. 84,375. Beginning work in process cost Rs.21,250; Rs. 13,250 for materials and Rs. 8,000 for conversion. All materials are added at the start of the production process, and conversion costs are incurred uniformly throughout manufacturing. Wright Company uses a weightedaverage process cost system. The cost per equivalent unit for conversion cost for 2001 was:Select correct option:
Rs. 1.00Rs. 1.23Rs. 1.33Rs. 1.45 Under Periodic Inventory system Purchase of inventory is treared as:Select correct option:
AssetsExpenseIncomeLiability
www.vuzs.netIn the process costing when Cost of units transferred to the next department II. What would be the journal entry Passed?Select correct option:
W.I.P (DeptII) a/c To W.I.P (DeptI)Finish Goods To W.I.P (DeptI)W.I.P (DeptII) To FOH appliedW.I.P (DeptI) To Payroll a/c While deducting Income Tax from the gross pay of the employee, the employer acts as a (an) _________________for Income Tax Department.Select correct option:
Agent of his own CompanyPaid tax collection agentUnpaid tax collection agentNone of the given options If labor is satisfied with high wages it may ultimately lead to:Select correct option:
Increased production and productivityIncreased efficiencyReduced labor and overhead costsAll of the given options Gross pay includes which of the following items? Select correct option:
Basic pay + bonus pay Overtime payment + shift allowances Rent and conveyance allowances All of the given options Cost of finished goods inventory is calculated by:Select correct option:
Multiplying units of finished goods inventory with the cost per unitDividing units of finished goods inventory with the cost per unitDividing per unit cost with finished goods inventoryDeducting total cost from finished goods inventory
Byer produced 20,000 units and their total factory cost was Rs. 450,000,other cost like property tax on factory bulding was Rs. 10,000 included in that cost till year ended the cost of per unit would be: Select correct option:
Rs.22.5 Rs.23.5 Rs.24.5 Rs.26.5 The Inventory Turn over ration is 5 times and numbers of days in a year is 365.Inventory holding period in days would beSelect correct option:
100 days73 days50 days10 days Which of the following best describes the manufacturing costs? Select correct option:
Direct materials, direct labor and factory overhead Direct materials and direct labor Direct materials, direct labor, factory overhead, and administrative overhead Direct labor and factory overhead The cost of goods sold was Rs. 240,000. Beginning and ending inventory balances were Rs. 20,000 and Rs. 30,000, respectively. What was the inventory turnover?Select correct option:
8.0 times12.0 times7.0 times9.6 timesRef by Ayesha ikram
Inventory turnover ratio = Cost of goods sold/Average inventory Which of the following would be considered a major aim of a job order costing system?Select correct option:
To determine the costs of producing each job or lot
To compute the cost per unitTo include separate records for each job to track the costsAll of the given options A company produces two chemicals in a joint process. Chemical A can be sold at split off while chemical B currently cost Rs. 2 per gallon for disposal. If chemical B is further processed, it would cost Rs. 5 per gallon. At what sales price would the company be in different between disposing of chemical B at split off and further processing the chemical? Select correct option:
Rs.3 Rs.5 Rs.4 Rs.7 not sure Which of the following cannot be used as a base for the determination of overhead absorption rate? Select correct option:
Number of units produced Prime cost Conversion cost Discount Allowed A standard rate is paid to the employee when he completed his job: Select correct option:
In time less than the standard In standard time In time more than standard Both in standard time and more than the standard time
All of the following are terms used to denote Factory Overheads EXCEPT: Select correct option:
Which of the following is/are reported in production cost report? Select correct option:
The costs charged to the department How the costs were assigned to the output? The equivalent units of production by the department All of the given options Merrick Differential Piece Rate System: Select correct option:
worker is not penalized even if his performance does not exceed 80 per cent of the High Task. worker is not penalized even if his performance does not exceed 70 per cent of the High Task. worker is not penalized even if his performance does not exceed 50 per cent of the High Task. worker is not penalized even if his performance does not exceed 30 per cent of the High Task. In which of the following center FOH cost NOT incurred Select correct option:
Production Center Service Center General Cost Center Head Office Which of the following cost is used in the calculation of cost per unit?Select correct option: Total production cost Cost of goods available for sales Cost of goods manufactured Cost of goods Sold In furniture manufacturing use of nail, pins, glue, and polish which use to increase its esteem value that cost is treated as:Select correct option: Direct material cost Indirect material cost FOH cost Prime cost Cost of goods sold can be calculated as followSelect correct option:
Cost of goods manufactured Add Opening finished goods inventory Less Closing finished goods inventory Cost of goods manufactured Less Opening finished goods inventory Less Closing finished goods inventory Cost of goods manufactured Less Opening finished goods inventory Add Closing finished goods inventory Cost of goods manufactured Add Opening finished goods inventory Add Closing finished goods inventory Examples of industries that would use process costing include all of the following EXCEPT:Select correct option: Beverages Food Hospitality Petroleum Which of the following would be considered a major aim of a job order costing system?Select correct option: To determine the costs of producing each job or lot To compute the cost per unit To include separate records for each job to track the costs All of the given options The danger Level can be calculated ?Select correct option: Average consumption x Lead time to get urgent supplies Normal consumption x Lead time to get urgent supplies Maximum consumption x Lead time to get urgent supplies Minimum consumption x Lead time to get urgent supplies The Economic order quantity can be calculated by:Select correct option: Formula Method Table Method Graph Method All of the given Which of the following manufacturers is most likely to use a job order cost accounting system?Select correct option: A soft drink producer A flour mill A textile mill A builder of offshore oil rigs
The FIFO inventory costing method (when using a perpetual inventory system) assumes that the cost of the earliest units purchased is allocated in which of the following ways?Select correct option: First to be allocated to the ending inventory Last to be allocated to the cost of goods sold Last to be allocated to the ending inventory First to be allocated to the cost of good sold Which of the following statements concerning job order costing systems is incorrect? Select correct option:
Cost drivers are those items which cause actual overhead to exceed applied overhead Job order costing systems are appropriate to both manufacturing and service businesses Traditionally, direct labor has been a very popular overhead application base In a service business, indirect costs of providing a service are treated as overhead and applied in a manner similar to that for factory overhead A chemical process has normal wastage of 10% of input. In a period, 2,500 Kg of material were input and there was abnormal loss of 75 Kg. What quantity of good production was achieved? Select correct option:
2,175 kg 2,250 kg 2,425 kg 2,500 kg Which of the following cannot be used as a base for the determination of overhead absorption rate? Select correct option:
Number of units produced Prime cost Conversion cost Discount Allowed EOQ is a point where: Ordering cost is equal to carrying cost Ordering cost is higher than carrying cost Ordering cost is lesser than the carrying cost Total cost is maximum
In a repeated distribution method: Select correct option:
Each service department in turn does not reallocate its costs to all departments Each service department in turn and reallocates its costs to all departments Each service department in turn and allocates its costs to all departments Only one service department in turn and reallocates its costs to all departments If opening inventory of material is Rs.20,000 and closing inventory is Rs. 40,000.the Average inventory amount will be: Select correct option:
Rs. 40,000 Rs. 30,000 Rs. 20,000 Rs. 10,000 If joint products are to be processed further beyond the point of separation, costs should be assigned to the products on the basis of: Select correct option:
Adjusted sales value Ultimate sales value A physical unit of measure An engineering analysis Which of the following is sales force payroll incentive? Select correct option:
Commission Shift allowance Over time payment Bonus opening WIP 3500 units that was 70%completed. completed during the month was19,000 units.Closing WIP 6500 units that was 30%completed. How many units were started during January? Select correct option:
19,000 units 22,000 units 16,000 units 25,500 units
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