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3. Under which of the following, all cost of production s considered as product cost.
Regardless of whether they are variable or fixed in nature?
a. Absorption costing b. Direct costing c. Marginal costing
d. Variable costing
4. Mohan is running his own personal financial services business, he has been offered a
job for a salary of Rs. 45,000 per month which he does not availed. Rs 45,000 will be
considered as:
a. Sunk cost b. Opportunity cost C. Avoidable cost d. Historical cost.
6. Indirect material, indirect labour and indirect expenses collective form ________ cost.
a. Overhead b. Contribution c. Job, Process d. None of the above.
9. Single or output costing is used when the product is________ identical and a
______Article is produced.
a. Uniform, Single b. Fixed, Variable c. Operating, Fixed d. None.
11. In job costing P.F. and ESI paid by the company for factory employees are accounted
for as
a. Admn. Costs b. Factory Overhead c. Indirect labour d. none
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13. When the cost and works Accountants Act was passed in India?
a. 1947 b.1951 c.1959 d.1969
16. The ascertainment of cost after they have been incurred is known as___________
a. Historical costing b. Conservation costing c. Absorption costing
d. Uniform costing
19. Allotment of whole item of cost to a cost centre of cost unit is known as:
a. Cost Apportionment b. Cost Allocation c. Cost Absorption d. Machine hour rate.
A company manufactures 5000 units of a product per month. The cost of placing an
order is Rs.100. The purchase price of the raw material is Rs. 10 per kg. The re-order
period is 4 to 8 weeks. The consumption of raw material varies from 100 kg to 450 kg
per week, the verge consumption being 275 kg. The carrying cost of inventory is 20%
per annum. You are required to calculate question no. 26 to 28.
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26. Re-order Quantity:
a. 2500 kgs. b. 3600 kgs c.1750 kgs d. 4200 kgs.
29. The annul demand for a stock item is 2,500 units. The cost of placing an order is
required what is the EOQ?
a. 163 units b. 1,250 units c. 5,000 units d. 160 units
30. Which of the following is not a method of pricing raw material issues from stock?
a. Periodic weighted verge b. Relevant costing c. First-in First-out costing
d. Continuous weighted verge.
31. The Star Corporation uses Raw materials Z in a manufacturing process. Information s to
balance on hand, purchases and requisition of raw materials Z is given below:
Jan 01 Balance: 200 lbs. @ Rs. 1.50
Jan 08 Received 500 lbs @ Rs.1.55
Jan 18 Issued 100 lbs.
Jan 25 Issued 260 lbs
Jan 30 Received 150 lbs. @ Rs. 1.60
If a perpetual Inventory record of Raw Material Z is maintained on a FIFO basis, it
will show a month end inventory of:
a. Rs. 240 b. Rs. 784 c. Rs. 759 d. Rs. 767
32. If EOQ = 360 units, order costs are Rs. 5 per order, and carrying costs are Rs. 0.20 per
Unit, what is the usage in units?
a. 2,592 units b.25, 920 units c. 18,720 units d. 1, 29,600 units
33. The amount of purchase if cost of goods sold is Rs. 80,700; Opening stock Rs. 5,800
and Closing stock is Rs. 6,000
a. Rs. 80,500 b. 86,500 c. 86,700 d. Rs. 80,900
35. A company follows weighted verge cost method for the valuation of its inventory. The
details of purchase and issue of raw-materials pertaining to the company during the
week April 01, 2013 to April 07,2013 are as follows:
April 01 Opening stock 50 units @ Rs. 44 per unit
April 03 purchase 100 units @ Rs. 47 per unit
April 05 Issue 50 units
The average of inventory at the end of the week under weighted average method is
a. Rs. 4,600 b. Rs 4,700 c. Rs. 4,550 d. Rs. 4,300
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36. Consider the following data pertaining to a company for the month of March 2013:
Opening stock Rs. 22,000; Closing stock Rs. 25,000 ; purchases less returns Rs.
1,10,000; Gross profit margin (on sales) 20%. The sales of the company during the
month are.
a. Rs. 1,35,600 b. Rs. 1,44,250 c. Rs. 1,33,750 d. Rs. 1,29,900
37. Consider the following data pertaining to Welcome Ltd., for the month of October,
2013. Opening stock Rs. 30,000; Closing stock Rs. 40,000; Punches Rs. 5,60,000;
Returns outward Rs. 15,000; Returns inward Rs. 20,000; carriage inward Rs,. 5,000; if
the profit is 20% on net sales. The gross sales for the month of October, 2013 is.
a. Rs. 6,95,000 b. Rs. 6,62,500 c. Rs. 5,50,000 d. Rs. 6,75,000
38. Which of the following documents is used for issuing materials to production?
a. Purchase requisition note b. Store requisition note c. Goods received note
d. Stores Credit note.
47. Which one out of the following is not an inventory valuation method?
a. FIFO b. LIFO c. weighted average D. EOQ
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48. Calculate Re-order level form the following:
Consumption per week: 100-200 units, Delivery period: 14-28 days
a. 5600 units b.800 units c.1400 units d.200 units
50. The two levels of material controls are quantity control and
a. Financial control b. Value control c) Quality control
d. Both (b) and (c) e) All of these.
51. Worker is paid Rs 0.50 per unit and he produces 189 units in 7 hours. Keeping in view
the piece rate system, the total wages of the worker would be:
a. Rs. 9 b. Rs. 126 c. Rs. 3.5 d. Rs. 63
54. Taylors’s differential piece rate plan based on ________ piece rates is fixed.
a. Two b. Three c. Four d. Five
56. If, basic salary Rs. 10,000, per piece commission Rs.5 unit sold 700 pieces what will be
total salary:
a. Rs. 3,500 b. Rs. 13,500 c. Rs. 10,000 d. Rs. 6,500
59. Under Gantt’s Bonus plan, no bonus is payable to a worker if his efficiency is less than
a. 50% b. 66 2/3 % c. 83 1/3 % d. 100%
60. Wages under Rowan and Halsey plans are exactly equal when time saved is:
a. Nill b. 50% of the standard time c. Both a & b c. None
61. Halsey premium plan was invented by F.A. Halsey, an American Engineer in:
a. 1861 b. 1881 c. 1891 d. 1901
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63. The cost of abnormal idle time is changed to__________:
a. Costing P&L A/c. b. FA c. MA d. None
64. Idle Time arises only when workers are paid on ___________________basis:
a. Time b. Prime c. Total d. None
65. In Halsey Bonus Plan, a worker gets a bonus equal to__________ of the time saved.
a. 50% b. 60% c. 40% d. 30%
66. The number of employees at the beginning and end of 2017 were 2500& 3500
respectively. During the year 2017, 250 employees left and 350 persons joined the
company. Calculate the labour turnover ratio under flux method.
a. 26% b. 34% c. 16% d. 10%
67. Following are the labour turnover rates computed under different methods for the quarter
ended on 31st March, 2015: Flux method 20%; Replacement method 10%; Separation
method 6%; The total number of workers replaced during the quarter is 80. You are
require to find the number of workers recruited and joined including replacements.
a. 105 b. 110 c.112 d.115
69. Merrick differential piece rate plan based on__________ piece rates is fixed.
a. Two b. Three c. Four d. Five
70. Work study comprises of _______ and ______ study in relation to the performance of job
or operation.
a. Time & Motion b. Motion & Time c. Direct & Indirect d. None
71. The output of worker A is 64 units in a 40 hrs. Week. Guarantee time rate is 5 per hour.
Ordinary piece rate is Rs.2 per unit. Find the earnings of worker A under Time rate.
a. Rs. 200 b. Rs. 250 c. Rs. 350 d. Rs.225
72. Calculate earnings of workers from the following information under Halsey plan.
Standard time 40 hrs.; Standard production 96 units; Time taken 40 hours; Hourly rate fo
Wages Rs. 50; Piece rate Rs. 30 per unit.
a. Rs.2,400 b. Rs. 2,500 c. Rs.2350 d. Rs. 2,200
73. A worker takes 9 hours to complete a job on daily wages and 6 hours on a scheme of
payment by results. His day rate is 0.75 paisa an hour. The material cost for the product is
Rs. 4 and the overheads are recovered t 150% of total wages. Calculate the factory cost of
the product under Rowan plan.
a. Rs. 19 b. Rs.20 c. Rs. 25 d. Rs. 35
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75. Preventive costs of labour turnover include the following except:
a. Cost of recruitment and training b. Medical services c. Welfare d.
Gratuity and pension
76. The allotment of whole items of cot to cost centres or cost unit is called:
a. Cost allocation b. cost apportionment c. overhead absorption
d. Cost classification.
80. Which of the following is a scientific and accurate method of absorption of factory?
overheads:
a. Percentage on prime cost method b. Percentage on direct wages method
c. machine hour rate method d. All
82. The aggregate of indirect material cost, indirect wages and _______ is overhead.
a. Indirect expenses b. Direct expenses c. Admn. Expenses d. None
83. With the change in quantum of production_ _______ cost remains the same per unit.
a. Variable b. Fixed variable c. Semi9 variable d. None
85. The difference between actual and recovered factory overheats is called
a. Under or over absorbed overhead. Apportionment of overheads
c. Allocation of overhead d. None
88. In element wise classification of overheads which one of the following is not included:
a. Fixed overhead b. Indirect labour c. Indirect material
d. Indirect expenditure
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89. Normal stores losses are:
a. Part of prime cost b. Part of production overheads
c. Part of selling and distribution overheads
d. Written-off to costing and profit and loss account
A factory has three production departments X, Y and Z and two services departments A and
B. the overheads distribution for September 2004 was as follows: X-50,000; Y-20,000; Z-
25,000 Service departments A-5,000 and B-8,000. The expenses of the service departments
are charged on percentage basis as here under
X Y Z A B
A 30% 30% 20% - 20%
B 50% 20% 20% 20% -
91. What are the production departments X total cost after secondary distribution?
a. Rs. 55,400 b. Rs. 46,700 c. Rs. 56,367 d. Rs. 36,800
92. What are the production departments Y total cost after secondary distribution?
a. Rs. 25,400 b. Rs. 23,612 c. Rs. 25,600 d. Rs. 14,635
93. What are the production departments Z total cost after secondary distribution?
a. Rs. 29,200 b. Rs. 27,608 c. Rs. 28,021 d. Rs. 26,300
94. Workout machine hour rate for the following machine for the month of January:
Cost of machine Rs. 90,000; Other charges- Rs. 10,000; Working life- 10 years; working
hours – 2,000 per year; repair charges – 50% depreciation; power – 10 units per hour @
10 paisa per unit; lubricant oil Rs.2 per day of 8 hours; consumable stores @ Rs. 10 per
day of 8 hrs; wages of operator @ Rs. 4 per day.
a. 10.50 b.8.65 c. 11.20 d. 9.35
95. The costing method in which fixed factory overheads are added to inventory is –
a. Activity based costing b. Marginal costing c. direct costing
d. Absorption costing.
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98. What is the production overhead of department X:
a. Rs. 11,000 b. Rs. 14,000 c. Rs. 13,000 d. Rs. 11,500
ANSWERS:
Q.NO ANS Q.NO ANS Q.NO ANS Q.NO ANS Q.NO ANS
1 21 41 61 81
2 22 42 62 82
3 23 43 63 83
4 24 44 64 84
5 25 45 65 85
6 26 46 66 86
7 27 47 67 87
8 28 48 68 88
9 29 49 69 89
10 30 50 70 90
11 31 51 71 91
12 32 52 72 92
13 33 53 73 93
14 34 54 74 94
15 35 55 75 95
16 36 56 76 96
17 37 57 77 97
18 38 58 78 98
19 39 59 79 99
20 40 60 80 100