Overview of Cost – Corporate and Management Accounting MCQBy CACSMockTest / November 25, 2022 3 Overview of Cost – Corporate and Management Accounting MCQ 1 / 47 Dec 2016: Which of the following is not a part of the job order cost sheet___ (A) Direct material (B) Direct labour (C) Actual factory overheads (D) Applied factory overheads 2 / 47 : Following information is given:Direct material purchased: ₹ 6,00,000Direct material consumed : ₹ 7,00,000Direct labour: ₹ 3,00,000Direct expenses: ₹2,50,000Manufacturing overheads: ₹ 3,00,000Prime cost will be____ (A) ₹ 14,50,000 (B) ₹ 11,50,000 (C) ₹ 12,50,000 (D) ₹ 15,50,000 3 / 47 June 2016: Cost of production for 10,000 units: ₹ 1,60,000Opening stock of finished goods (1,000 units): ₹ 18,000Closing stock of finished goods (FIFO): ₹ 2,000 unitsSelling & distribution overheads: ₹ 2 per unit soldPro ht mark-up on selling price: 20%The amount of profit will be____ (A) ₹ 39,800 (B) ₹ 40,500 (C) ₹ 41,000 (D) ₹ 40,800 4 / 47 June 2016: From the following particulars relating to Job No. 555, ascertain the total cost:Direct materials 16,000Direct labour 8,000Direct expenses 1,600Works overheads are recovered on the basis of 50% on prime cost and administrative overheads at 10% of works cost. Choose the correct option (A) 45,000 (B) 45,240 (C) 42,240 (D) 43,000 5 / 47 Dec 2015: Item(s) excluded from the cost sheet are (A) Direct material. (B) Administrative overheads (C) Provision for taxation (D) All of the above 6 / 47 June 2015: Following information is available regarding an organization:Direct material purchased: ₹ 1,50,000Direct material consumed: ₹ 80,000Direct labour: ₹ 50,000Direct expenses: ₹ 30,000Manufacturing overheads: ₹ 20,000The prime cost for the organization is – (A) 1,60,000 (B) 2,90,000 (C) 2,30,000 (D) 1,80,000 7 / 47 Dec 2014: Which of the following is not a type of job costing (A) Terminal costing (B) Contract to cost (C) Batch costing (D) Operation costing 8 / 47 Dec 2014: Which of the following is to be included while preparing a cost sheet (A) Interest paid (B) Goodwill written-off (C) Income-tax paid (D) Salesman commission 9 / 47 Following information relates to the production department of a factory:Materials used : ₹ 80,000Direct labour : ₹ 60,000Overheads : ₹ 40,000On an order carried out in the department, materials consumed amounted to ₹ 16,000. The overheads chargeable to this order on the basis of direct materials will be___ (A) ₹ 8,000 (B) ₹ 9,000 (C) ₹ 8,500 (D) ₹ 9,800 10 / 47 Dec 2016: Following information has been collected from cost records of Bright Ltd.:Direct material: ₹ 5,00,000Direct labour: ₹ 3,00,000Factory overheads: 20% of factory cost.The number of factory overheads will be: (A) ₹ 1,60,000 (B) ₹ 2,00,000 (C) ₹ 1,80,000 (D) ₹ 1,96,000 11 / 47 Dec 2016: When the amount of overheads absorbed is less than the number of overheads incurred, it is called___ (A) Under-absorption of overheads (B) Over-absorption of overheads (C) Proper absorption of overheads (D) None of the above 12 / 47 June 2016: Which of the following statements are true____(i) Conversion costs and overheads are interchangeable terms(ii) Notional cost and imputed cost means the same thing(iii) Cost accounting is not needed by a non-profit organization(iv) Rent on the owned building is included in cost accounts.Select the correct answer from the options given below (A) (i) and (ii) (B) (iii) and (iv) (C) (ii) and (iv) (D) All of the above 13 / 47 Dec 2015: Allotment of the entire costs to a cost centre or unit is known as___ (A) Cost apportionment (B) Cost allocation (C) Cost absorption (D) Machine hour rate 14 / 47 June 2015: A product “whose direct material costs and direct labour costs are ₹ 200 and ₹ 100 would consume 3 hours, 4 hours and 5 hours in department A, B & C respectively. The overheads absorption rate is – A: ₹ 4.5 per hour, B: ₹ 5 per hour and C: ₹ 10.5 per hour. The total cost of the product is (A) ₹ 486 (B) ₹ 386 (C) ₹ 214 (D) ₹ 500 15 / 47 June 2015: The budgeted fixed overheads amounted to ₹ 75,000. The budgeted & actual production amounted to 15,000 units & 20,000 units respectively. This means that there will be an___ (A) Under-absorption of ₹ 25,000 (B) Under-absorption of ₹ 18,750 (C) Over-absorption of ₹ 25,000 (D) Over-absorption of ₹ 18,750 16 / 47 Dec 2014: The budgeted fixed overheads amounted to ₹ 84,000. The budgeted and actual production amounted to 20,000 units and 24,000 units respectively. This means that there will be an___ (A) Under-absorption of ₹ 16,800 (B) Under-absorption of ₹ 14,000 (C) Over-absorption of ₹ 16,800 (D) Over-absorption of ₹ 14,000 17 / 47 Dec 2014: Rent, rates and taxes paid for the building are apportioned on the basis of____ (A) Floor area (B) Capital value (C) No. of employees (D) Direct labour hours 18 / 47 June 2016: Direct labour cost will include___ (A) All labour cost attributable to a production department (B) Labour cost of production and production support services (C) Cost of direct labour engaged in converting raw materials into manufactured articles (D) Cost of labour recruited directly by the management and through contractors 19 / 47 June 2015: Which of the following is not an objective of time-booking__ (A) Apportionment of overheads against jobs (B) Preparation of payrolls (C) Ascertaining idle time for the purpose of control (D) Calculation of labour cost of jobs done 20 / 47 Dec 2016: Amaze Ltd. had an opening inventory of 5,000 units costing ₹ 5 per unit on 1st April 2016. Following receipts and issues took place in April 2016:5th April 2016: Purchased 800 units @ ₹ 8 per unit12th April 2016: Purchased 200 units @ ₹ 8 per unit15th April 2016: Issued 3,000 units 25th April 2016: Purchased 1,000 units @ ₹ 9 per unitCost of inventory as of 30th April 2016 under weighted average basis will be____ (A) ₹ 25,500 (B) ₹ 27,000(C) (C) ₹ 20,000 (D) ₹ 23,500 21 / 47 June 2016: The technique of economic order quantity is losing significance since the development of (A) Perpetual inventory (B) Just-in-time (C) First-in-first-out (D) ABC analysis 22 / 47 June 2016: XYZ Ltd. had 4,000 units of inventory in hand on 1st March 2016, costing ? 4 per unit. Purchases and issues of material during the month were as follows:The cost of inventory as of 31st March 2016 under FIFO and weighted average cost method will be (A) ₹ 27,000 and ₹ 24,500 (B) ₹ 27,000 and ₹ 23,625 (C) ₹ 22,000 and ₹ 23,625 (D) ₹ 22,000 and ₹ 24,498 23 / 47 June 2015: In case of rising prices, the FIFO method will provide___ (A) Lowest value of closing stock and profit (B) Highest value of closing stock and profit (C) Highest value of the closing stock but the lowest value of profit (D) Lowest value of the closing stock but highest value of profit 24 / 47 Dec 2014: In an inflationary situation, which system of inventory valuation shows higher profits (A) LIFO (B) FIFO (C) HIFO (D) Weighted average 25 / 47 Dec 2016: In the management information system (MIS), top-level management uses (A) Operational information (B) Tactical information (C) Transactional information (D) Strategic information 26 / 47 Dec 2016: A technique where standardized principles and methods of cost accounting are employed by a number of different companies is termed as (A) Uniform costing (B) Absorption costing (C) Standard costing (D) ABC costing 27 / 47 Dec 2016: Multiple costing is followed in___ (A) Biscuit factory (B) Steel industry (C) Brick making (D) Cycle manufacturing 28 / 47 Dec 2016: Statement – ISunk cost is one that has already been incurred and cannot be avoided by decisions in the future. Statement – IIFor decision making, it is required that such cost should be incurred.Select the correct answer from the options given below: (A) Both statements are correct (B) Both statements are incorrect (C) Statement-I is incorrect, but Statement-H is correct (D) Statement-I is correct, but Statement-II is incorrect 29 / 47 June 2016: Management accounting does not include the function of (A) Planning and control (B) Product costing (C) Preparation of financial statements (D) Decision-making 30 / 47 June 2016: Those fixed costs which continue to be incurred even when there is no production are called (A) Period costs (B) Discretionary costs (C) Committed costs (D) Output costs 31 / 47 June 2016: Cost Accounting Standard is related to bringing uniformity and consistency in the principles and methods of determining the selling and distribution overheads with reasonable accuracy. (A) 10 (B) 12 (C) 15 (D) 4 32 / 47 Which one of the following statements is false___ (A) Management accountant uses cost accounting tools and techniques for planning and decision making (B) Management accounting is mostly historical in its approach and it projects the past (C) Cost accounting system can be installed without a management accounting (D) Management accounting focuses on wealth maximization 33 / 47 June 2016: A process in which management is looking outward to examine how others achieve their performance levels and to understand the process they use, is called___ (A) Balanced scorecard (B) Target costing (C) Benchmarking process (D) Performance analysis 34 / 47 Dec 2015: A business unit is known to be a profit centre (A) If its operations or departments are not directly involved in revRenee generating activities, but instead, focus on elements of cost control (B) If its management is evaluated not only on revenues and expenses but also on asset investment (C) If its management is compensated based on the level of profitability (D) If its management is held accountable for both revenues and expenses and has the authority to make a decision regarding its products, markets and source of supply 35 / 47 Dec 2015: Conversion cost is the summation of (A) Direct material and direct wages (B) Direct wages and office over-heads (C) Direct wages, direct charges and works overheads (D) None of the above 36 / 47 Dec 2015: Management accounting is basically concerned with (A) The problem of choice (B) The Causative relationship (C) Recording of transaction (D) Both (A) and (B) above 37 / 47 June 2015: Which of the following is the social purpose of cost audit – (A) Detection and correction of ab-normal losses (B) Detection of errors and frauds (C) Determination of inventory valuation (D) Pinpointing areas of inefficiency and mismanagement for the benefit of shareholders and consumers 38 / 47 June 2015: Sunk costs are____ (A) Opportunity costs (B) Costs to be incurred in future (C) Not relevant for decision making (D) Controllable costs 39 / 47 June 2015: Interest on internally generated funds is an example of (A) Differential cost (B) Joint cost (C) Common cost (D) Imputed cost 40 / 47 June 2015: The establishment of budgets, standard costs and actual costs of operations, processes, activities or products and the analysis of variances, profitability or the social use of funds is known as (A) Costing (B) Cost Accounting (C) Cost Accountancy (D) Financial Accounting 41 / 47 June 2015: Which of the following is generally used as a cost unit in the cement industry (A) Per tonne (B) Per kilolitre (C) Per kilogram (D) Per gallon 42 / 47 Dec 2014: Which of the following is not true? Fixed costs remain fixed (A) Over a short period (B) Over a long period and within a relevant range (C) Over a short period and within a relevant range (D) Over a long period 43 / 47 Dec 2014: For a manufacturing company, which of the following is an example of period cost rather than a product cost (A) Depreciation on factory equipment (B) Commission to the salesman (C) Wages of machine operator (D) Insurance on factory equipment 44 / 47 Dec 2014: The cost of selecting one course of action and forgoing the other is known as (A) Sunk cost (B) Differential cost (C) Opportunity cost (D) Joint cost 45 / 47 Dec 2014: Relevant costs are (A) Future costs (B) Standard costs (C) Controllable costs (D) Historical costs 46 / 47 Dec 2014: The cost that increases as the volume of activity decreases within the relevant range, is known as (A) Average cost per unit (B) Average variable cost per unit (C) Total fixed cost (D) Total variable cost 47 / 47 Dec 2014: The term used for process of ascertaining the cost’ is known as (A) Cost (B) Costing (C) Cost accounting (D) Cost accountancy Your score is LinkedIn Facebook Twitter VKontakte Related