Set : 1 Q.

1)

(a) State whether the following statements are True (T) or False (F): (i) ABC analysis is made on the basis of unit prices of materials.

(ii) Cost of tube used for packing tooth paste is indirect material cost. (iii) Value analysis helps in cost control. (iv) No distinction is made between direct and indirect materials in Process Costing. (v) Cost industry makes use of output costing. (vi) Standard hour is the standard time required per unit of production.

(b) Match the following correctly: Merit rating Flexible budget Differential cost analysis Debenture interest Angle of incidence Pure nance not included in cost Pro tability rate Evaluation of a job Liquidity Considers costs by behavior Decision taking Budgetary control Basis for remunerating employees

(c) Choose the correct answer from the brackets: (i) The annual demand of a certain component bought from the market is 1,000 units. The cost of placing an order is Rs. 60 and the carrying cost per unit is Rs. 3 p.a. The Economic Order Quantity for the item is_______ (200, 400, 600)

(ii) The monthly cost of maintenance of machinery for 12,000 machine hours run is Rs. 1,70,000 and for 18,500 hours it is Rs. 2,02,500. The cost of maintenance for 14,000 hours is Rs. ______. (1,90,000,1,80,000,1,85,000) (iii) A companys xed cost amounts to Rs. 120 lakhs p.a. and its overall P/V ratio is 0.4. The annual sales of the company should be Rs.______ lakhs to have a Margin of Safety of 25%. (400, 500, 600)

Ans.1) (a) (i) False; (ii) False; (iii) False; (iv) True; (v) True; (vi) False. (b) Merit rating Flexible budget Differential cost analysis Debenture interest Angle of incidence Basis for remunerating employees Considers cost by behavior Decision making Pure nance not included in cost Pro tability rate

(c) (i) 200 units; (ii) 1,80,000; (iii) Rs. 400 lacs;