Cost ing - Mcqs 5m274p

1. Cost ing mainly helps the management in a. Earning extra profits b. Providing information to management c. Fixing prices of the products d. All of the above 2. Cost ing provide all of the information except a. Products costs b. COGS c. Inventory values d. Cash forecast 3. Which of the following statement is true a. Management ant prepare financial statements for s external to the business. b. Management ant develop strategic plans for enterprises and translate these plans into budgets. c. Management ants focus what has happened in the enterprise in the past. d. Management ants focus on compliance with GAAP and reporting requirement of regulatory agencies. 4. The term cost refer to a. An asset that has given benefit and is now expired b. The price of product or services rendered c. The value of sacrifice made to acquire goods d. The present value of future benefits 5. Variable cost per unit a. Remains fixed b. Fluctuate with the volume of production c. Varies with sympathy with volume of sales 6. Fixed cost per unit increases when a. Production volume decreases b. Production volume increases c. Variable cost per unit decreases 7. Opportunity cost helps in a. Ascertainment of cost b. Controlling cost c. Taking management decision 8. Conversion cost is the sum total of a. Direct material cost and direct wages cost b. Direct wages, direct expenses and factory overheads c. Indirect wages and factory overheads 9. Those costs which are related to acquiring and maintaining the organisation its long term assets are known as a. Variable costs b. Committed Fixed costs c. Managed fixed cost 10. Which of the following cost is not a committed fixed cost

a. Depreciation on fixed assets b. Property taxes c. Insurance on property and plant d. Cost of employee training program 11. The term ‘sunk cost’ refer to a. Past costs that are irrevocable b. Costs that are directly influenced by unit manager c. Costs that should be incurred in a particular production process d. Costs that may be eliminated if some economic activity is changed or deleted 12. The important feature of cost center is that a. It uses only monetary information b. It has clearly defined boundaries c. It must be one specific location only d. It must be an area of business through which product 13. Assume the electricity cost for a company has two components a) minimum charges per month, no matter how much electricity is used that month and b) a charge for every hour used. This type of cost is known as a. Variable cost b. Fixed cost c. Semi variable cost d. Stop cost 14. Direct labour cost would include wages paid to all of the following except a. Machine operators b. Assembly line workers c. Janitors d. Brick layers 15. In-Direct labour cost would include wages paid to all of the following except a. Machine operators b. Store keepers c. Material handlers d. Fork lift operators 16. Overheads consist of all the following except a. Indirect materials b. Factory utilities c. Direct labour d. Indirect labour 17. Which of the following is not a component of the prime cost a. Direct materials b. Direct labour c. Direct expenses d. Overheads 18. Prime cost comprises of the following combination of cost: a. Direct materials and factory overheads b. Direct labour and factory overheads

c. Direct materials, direct labour and factory overheads d. None of the above 19. Elements of manufacturing costs are a. Direct materials, direct labour, variable overhead and fixed overheads b. Direct materials, direct labour, and variable overhead c. Direct materials, direct labour, and fixed overhead d. Direct materials, indirect materials, direct labour, and variable overhead 20. Conversion and prime costs a. Are synonymous and can be used interchangeably b. Both include factory overheads with its variable and fixed components c. Represent costs incurred on t products before the split-off point d. Differ because prime cost include direct material and direct labour and conversion cost include direct labour and factory overheads 21. An understatement of WIP inventory at the end of the period will a. Overstate gross profit from sales in that period b. Overstate current assets c. Overstate net income for that period d. None of the above 22. In a period of rising prices, the following inventory method would result in the lowest cost of material used a. FIFO method b. LIFO method c. Weighted average method d. Base stock method 23. A written request to a supplier for specified goods at an agreed upon price is called a a. Purchase order b. Receiving report c. Purchase requisition d. Material requisition form 24. Which of the following documents in a cost ing system is designed to exercise control over the delivery of and accurate recording of the receipts of goods a. Goods received note b. Material requisition c. Order to the supplier d. Purchase requisition 25. A purchase requisition is raised a. To intimate to the supplier the quantity and quality of material required. b. When goods are received from supplier c. To let the s department know that an invoice should be expected from a supplier. d. When the stock of raw materials has fallen to reorder level 26. In a period of rising prices, FIFO inventory costing has the following disadvantages: a. Income tax are levied and paid on the artificially inflated profits b. It can be cumbersome to use if a large number of purchases are made c. Costs charged against revenue come from the older lower inventory onhand

d. All of the above 27. The reorder level is a. No. of units that should be ordered b. Level of inventory when next inventory should be placed c. The safety stock plus the average stock d. Both b and c 28. When a safety stock is carried a. Carrying costs increases b. Stock out costs are reduces c. Outage occurs only if the demand between the order point and stock arrival is greater than expected d. All of the above 29. All of the following are assumption of the basic EOQ model except: a. The replenishment rate is small b. Lead time is known and constant c. Unit purchase cost is constant d. Carrying cost is assumed to be constant over the same period as that of the demand 30. Id the annual demand is equal to 500 units, ordering cost is equal to 40 and carrying cost is equal to Rs. 4 per unit, the EOQ is a. 10 b. 31.62 c. 100 d. 37.5 31. If the annual demand is 2400 and the EOQ is 300, then the order number is (round to the nearest whole number) a. 8 b. 53 c. 152 d. 77 32. If the EOQ is 400 units, the ordering cost is Rs. 0.20, the carrying cost Rs. 20, how many orders are placed per year. a. 1 b. 5 c. 2 d. 4 33. If the annual demand is 1800, the order quantity is 200 units, the maximum inventory is 180, and the lead time is 30 days, the order level is (assume 360 days in the year) a. 100 b. 130 c. 185 d. 30 34. Costs associated with holding inventories and resulting opportunity cost of the investment tied up in the inventory fall into which of the categories a. Carrying cost

b. Ordering cost c. Quality cost d. Stock out cost 35. Stock out cost include all of the following except a. Loss of sale b. Loss of goodwill c. Ordering costs d. Additional istrative costs to process orders 36. Lead time is a. Difference between the time and order is placed and delivered b. Difference between the products ordered and production received c. The discrepancies in purchase orders d. Time required to correct errors in the products received 37. What are the major relevant cost in maintaining safety stock a. Carrying cost and purchasing costs b. Ordering costs and purchasing costs c. Ordering costs and stock-out costs d. Stock-out costs and carrying costs 38. In computing relevant benefits and cost related to the Implementation of JIT system, the cost anlyst must consider a. All related costs and benefits b. All external inventory costs c. Only supplier related costs d. Only supplier material costs 39. According to which method of pricing, issues are closed to current economic values a. LIFO b. FIFO c. Highest in first out d. Weighted average price 40. In which of the following method of pricing, costs lag behind the current economic values a. LIFO b. FIFO c. Replacement price d. Weighted average price 41. Which of the following methods of remuneration is most likely to give stability of labour cost of the employees a. Straight price work b. bonus scheme c. Increased day work d. Group bonus work 42. Which of the following is the most relevant use of clock card a. To measure employee efficiency b. To allow calculation of bonus payment c. To allow labour time to be charged to individual job

d. To facilitate payment for the time spent on the work premises 43. Which of the following is usually prepared daily by employees for each job on a. Labour job ticket b. Punch card c. Time card d. Cost control card 44. The wages paid to a er who construct wooden mould for concrete laying on a building contract should be treated as a. Direct labour cost of the contract b. Indirect labour cost of the contract c. Fixed labour cost of the contract d. Non-controllable cost of the contract 45. Overtime pay may be correctly defined as a. Bonus paid to skilled workers b. A paid to the worker to compensate the fatigue c. The increased payment during overtime hours because of increased rate of pay d. The payment for all hours in excess of the basic working week