Fcma Mock ($i I) .

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FCMA MOCK (feb 2020)
Question No: 1
While recording labour costs, the total amount earned by workers is credited to
_______ Account.
Payroll
Accrued payroll
Revenue
Expense
Question No: 2
Which one of the following would be the most appropriate basis for allocating
the cost of plant insurance that covers equipment theft and damage?
FCMA MOCK SYED SHAHBAZ RAZA ZAIDI

2
Machine hours
Square feet of plant space
Direct labour hours
Value of equipment
Question No: 3
In a manufacturing company, the cost debited to work-in-process inventory

account represents:
direct material used, direct labour and manufacturing overhead.
cost of finished goods manufactured.
period cost and product cost.
none of the above.
Question No: 4
Indicate which one of the following statements is more descriptive of

management accounting than of financial accounting?
Recognized standards are used for presentation.
Information is tailored to the ends of individual decision maker.
Information is more widely distributed.
Emphasis is on past result.
Question No: 5

3
The variable factory overhead rate under practical capacity, expected actual
capacity and normal capacity levels would be same:
except for normal capacity.
except for practical capacity.
except for expected actual capacity.
for all three levels.
Question No: 6
If sale price of a product ‘B’ is Rs. 25 per unit, direct material cost is Rs. 10 per
unit, direct labor cost is Rs. 6 per unit, variable manufacturing cost is Rs. 4 per
unit, and variable marketing and administrative cost is Rs. 2 per unit, then what
would be the contribution per unit of product ‘B’?
Rs. 13
Rs. 9
Rs. 5
Rs. 3
Question No: 7
Costs incurred on job no. 1 during the month of January are as follows: Direct
material consumed 10 pounds @ Rs. 50 per pound, Direct labor used 4 hours
@ Rs. 100 per hour. Factory overhead is charged to this job @ 60% of direct

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labor cost. If job is completed during the month, then what would be the total
cost of job no. 1?
Rs. 1,140
Rs. 900
Rs. 740
Rs. 640
Question No: 8
Which of the following would be classified as indirect labor?
Assembly workers in a company manufacturing television.
A stores assistant in a factory store.
Plasters in a constructions company.
An audit clerk in a firm of auditors.
Question No: 9
Which of the following are characteristics of services costing?
High levels of indirect costs as a proportion of total cost.
Cost units are often intangible.
Use of composite cost units.
All of the above.

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Question No: 10
In a job order cost system, the use of Indirect materials would usually be
reflected in the general ledger as an increase in __________.
factory overhead control
finished goods control
work in process control
cost of goods sold
Question No: 11
The cost unit ______________ is used for electricity cost ascertainment.
ampere
volt
thermal units
kilowatt-hours
Question No: 12

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Rs. 60,000 over-absorbed.
Rs. 60,000 under-absorbed.
Rs. 110,000 over-absorbed.
Rs. 110,000 under-absorbed.
Question No: 13
A business makes shirts. Each machinist is paid Rs.30 a day and each
supervisor Rs.40 a day. Each supervisor work with upto 10 machinists and
each machinist can produce one shirt a day. If 100 shirts a day are produced,
what is the daily labour cost?
Rs. 1,000
Rs. 4,000
Rs. 3,000
Rs. 3,400

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Question No: 14
A business started and completed 10,000 units in a month. It also has 5,000
units at the end of the month which are 20% complete. The equivalent
production units are _________.
10,000 units
11,000 units
15,000 units
14,000 units
Question No: 15
A factory produces a product with a variable cost of Re.0.60 per unit. Fixed
costs per quarter are Rs.15,000 including rent of Rs.6,000. If more than 20,000
units are produced per quarter, additional space is required which increases the
rent by 50%. What is the total cost per unit of producing 30,000 units in a
quarter?
Re. 0.60
Re. 0.90
Rs. 1.10
Rs. 1.20
Question No: 16
The salary of supervisor is treated as _________.
direct labour cos

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indirect labour cost
admin overhead expense
admin expense
Question No: 17
A Company sells its products at the selling price of cost plus 25%. What is its
profit on sale?
25%
15%
18%
20%
Question No: 18
A company absorbs overhead on machine hours which were budgeted at

11,250 hours with overheads of Rs.258,750. Actual results were 10,980 hours
with overheads of Rs.254,692. Overhead costs were__________.
Under absorbed by Rs. 2,152
Over absorbed by Rs. 4,058
Under absorbed by Rs. 4,058
Over absorbed by Rs. 2,152

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Question No: 19
Lathe operators at KF Manufacturing are hourly employees who are paid time
and a half for hours worked in excess of 40 hours per week. Maroof is a lathe
operator who worked 45 hours during the current week and had no idle time. The
correct accounting for the amounts paid to Maroof would be to:
charge only the overtime premium earned to the

direct labour cost for the project Maroof was working
on when the overtime was incurred.
charge the hourly wage earned plus the

overtime premium earned to the overhead account.
charge only the overtime premium earned to the

overhead account.
charge the hourly wage earned plus the

overtime premium earned to the direct labour cost for
the project. Maroof was working on when the
overtime was incurred.
Question No: 20
A process cost system is employed in those situations where:
many different products, jobs, or batches of production are being produced in each period.
manufacturing involves a single, homogeneous product that flows evenly through the production
process on a continuous basis.
a service is performed such as in a law firm or an accounting firm.
full or absorption cost approach is not employed.

10
Question No: 21
Eman & Company uses direct labour cost as a basis for computing its
predetermined overhead rate. In computing the predetermined overhead rate
for last year, the company misclassified a portion of direct labour cost as
indirect labour. The effect of this misclassification will:
“understate the predetermined overhead rate”.
“overstate the predetermined overhead rate”.
“have no effect on the predetermined overhead rate”.
cannot be determined from the information given.
Question No: 22
Under a job-order costing system, the dollar amount transferred from work-in-
process to finished goods is the sum of the costs charged to all jobs:
started in process during the period.
in process during the period.
completed and sold during the period.
completed during the period.

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Question No: 23
(i) and (ii)
(i) and (iii)
(i) and (iv)
(iii) and (iv)
Question No: 24

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Rs.25,185
Rs.30,625
Rs.34,685
Rs.36,065
Question No: 25
Variable costs are conventionally deemed to ______________.
be constant per unit of output
vary per unit of output as production volume changes
be constant in total when production volume changes
vary, in total, from period to period when production' is

constant
Question No: 26

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The process of cost apportionment is carried out so that:
Costs may be controlled
Cost units gather overheads as they pass through cost centres
Whole items of cost can be charged to cost centres
Common costs are shared among cost centres
Question No: 27
Rs.1,200
Rs.1,800
Rs.14,000

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Rs.2,400
Question No: 28
Sales for a sports goods company were Rs.960,000, cost of goods available for
sales was Rs.800,000, gross profit was Rs.25% of sales. The amount of ending
inventory was Rs. _______.
40,000
80,000
120,000
16,000
Question No: 29
Rs. 9,000
Rs. 7,000
Rs. 4,000
Rs.12,000

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Question No: 30
A management consultancy recovers overhead on chargeable consulting hours. Budgeted

overhead were Rs.615,000 and actual consulting hours were 32,150. Overheads were
under recovered by Rs.35,000. If actual overheads were Rs.694,075 what was the
budgeted overhead absorption rate per hour?
Rs.19.10
Rs.20.50
Rs.21.59
Rs.22.68
Question No: 31
Total fixed cost at production level of 100,000 units were Rs.300,000. At production level of
150,000 units the fixed cost would be:
Rs.450,000 in total.
Rs.400,000 in total.
Rs.2 per unit.
Rs.3 per unit.
Question No: 32

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Rs. 24,000
Rs. 2,500
Rs. 38,500
Rs. 8,500
Question No: 33
(i)

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(ii)
(iii)
(iv)
Question No: 34
Which of the following would be included in service industry?
Textile
Sugar mills
Garments factory
Private hospital
Question No: 35
A standard cost card reveals that one unit of Product 'A' needs 2 Kg of material 'X' at Rs. 10
per Kg. During February 800 units of Product 'A' produced. Actual price paid for material 'X'
is Rs. 9 per Kg and total cost Rs. 15,300. Determine material cost variance.
Rs. 700 favorable
Rs. 700 unfavorable
Rs. 1,700 favorable
Rs. 1,700 unfavorable

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Question No: 36
Standard time to produce a unit is 80 hours and standard time per hour is Rs 100 per
hour. Actual time spent to produce a unit is 90 hours and actual rate per hour is Rs 110
per hour. Determine labour rate variance.
Rs 2,200 unfavorable
Rs 900 favorable
Rs 900 unfavorable
Rs 2,200 favorable
Question No: 37
Standard time to produce a unit is 80 hours and standard time per hour is Rs 100
per hour. Actual time spent to produce a unit is 90 hours and actual rate per hour is
Rs 110 per hour. Determine labour efficiency variance.
Rs 100 unfavorable
Rs 1,000 favorable
Rs 100 favorable
Question No: 38
Cost object does not include _____________.
a product
a sales region

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any department
raw material
Question No: 39
Prime cost refers to ___________.
conversion cost – overheads
overheads + labour cost
direct cost
conversion cost
Question No: 40
What is the base rate of taxi, if the fare of taxi is Rs. 210 for 10 km and Rs. 450 for 40 km.
Rs.80
Rs.130
Rs. 120
Rs. 210
Question No: 41

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Which statement best describes primary data?
Data which is very important
Data derived from statistical reports
Data pertaining to immaterial matter
Data derived from statistical survey
Question No: 42
The information presented in various report is termed as:
processed information
primary information
quantitative information
qualitative information
Question No: 43
Prime cost means:
sum of direct material and direct labour cost
sum of indirect material and factory overhead cost
sum of indirect material and direct labour

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sum of direct material and marketing cost
Question No: 44
Following is a product cost?
Management salaries
Advertisement cost
Insurance premium
Direct labour cost
Question No: 45
Management accounting is basically for _________.
owners
all external parties
creditors
internal management
Question No: 46
Direct material cost should always be classified as ___________.
variable cost
semi-variable cost

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semi-fixed cost
period cost
Question No: 47
Semi-fixed costs:
increase in steps as the amount of the cost driver volume increases
remain the same within the relevant range of output
have both fixed and variable components in them
remain the same regardless of total output
Question No: 48
Management accountants are usually not responsible for ___________.
treasury
budgeting
costing
product decisions
Question No: 49
If sale price of a product ‘B’ is Rs. 50 per unit, direct material cost is Rs.
20 per unit, direct labor cost is Rs. 5 per unit, variable manufacturing cost
is Rs. 5 per unit, and variable marketing and administrative cost is Rs. 3
per unit, then what would be the contribution per unit of product ‘B’?

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Rs. 17
Rs. 25
Rs. 20
Rs. 13
Question No: 50
Process costing may be used in companies that __________________.
engage in road and bridge construction
produce sailboats made to customer specifications
produce bricks for sale to the public
construct houses according to customer plans
Question No: 51
A producer of _________ would not use a process costing system.
gasoline
potato chips
blank videotapes
stained glass windows
Question No: 52

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What is an equivalent unit?
A unit of output which is identical to all others manufactured in the same process
Notional whole units used to represent uncompleted work.
A unit of product in relation to which costs are ascertained.
The amount of work achievable, at standard efficiency levels, in an hour.
Question No: 53
Process B had no opening inventory. 13,500 units of raw material

were transferred in at Rs.5.00 per unit. Additional material at Rs.2.00
per unit was added in process. Labour and overheads were Rs.6.00
per completed unit and Rs.2.50 per incomplete unit. If 11,750
completed units were transferred out, what was the closing inventory
in Process B
Rs.12,250
Rs.13,125
Rs.16,625
Rs.17,125
Question No: 54

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Option (i) is correct
Option (ii) is correct
Option (iii) is correct
Option (iv) is correct
Question No: 55
Job number B-10 requires 380 active labour hours to complete. It is expected
that there will be 5% idle time. The wage rate is Rs.60 per hour. The labour cost
of Job number B-10 is:
Rs.21,660
Rs.22,800
Rs.23,940
Rs.24,000
Question No: 56
Which of the following is a true statement regarding joint costs?

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Joint costs are easily traced to individual products.
The primary reason for allocating joint costs is to determine whether a product should be sold
immediately or processed further.
The primary reason for allocating joint costs is for inventory valuation for financial reporting.
Joint costs consist only of overhead, never of materials or direct labor.
Question No: 57
materials, labor, and overhead
labor and overhead only
materials and labor only
conversion costs less by-product values
Question No: 58
Which one of the following statement concerning the difference between

management accounts and financial accounts is incorrect?
Financial accounts are governed by strict accounting rules and regulations, management accounts
are not
There is a legal requirement for management accounts
Management accounts are often required for individual divisions and/or products whereas financial
accounts usually cover the whole company

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Management accounts are mainly for internal purposes whereas financial accounts are mainly for
external purposes
Question No: 59
A company manufactures a single product. The total cost of producing 6,000

units is Rs.24,000 and the total cost of producing 20,000 units is Rs.60,000.
Within this range of activity level, the total fixed costs remain unchanged. What
is the variable cost per unit of the product?
Rs.2.57
Rs.3.00
Rs.3.23
Rs.4.00
Question No: 60
Labour turnover for the period is calculated as:
number of employees left ÷ average workforce
number of employees left ÷ workforce at the beginning of the period
number of employees left ÷ workforce at the end of the period
None of the above
Question No: 61

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A courier of a mail company is paid a salary of Rs.10,000 per month plus an

extra Rs.2 per mail article delivered. This labour cost is best described as:
a variable cost
a step cost
a semi-variable cost
a fixed cost
Question No: 62
Question No: 63

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net realizable value method.
sales-to-production-ratio method.
physical units method.
constant gross margin percentage method.
Question No: 64
_________ are closest to policy and decision makers.
External Auditors
Financial accountants
Management accountants
Internal Auditors
Question No: 65
The joint cost allocation method that assigns joint production costs based on
the proportionate share of eventual revenues less further processing costs is
the:
net realizable value method.

30
sales-to-production-ratio method.
physical units method.
constant gross margin percentage method.
Question No: 66
Which statement is correct regarding management accounting?
Information is widely distributed
Information is customized for decision makers
Legal requirements have to be followed
Information regarding specific unit cannot be obtained
Question No: 67
The secondary product recovered in the course of manufacturing a primary

product during a joint process is:
a by-product.
a joint product.
a replacement product.
a split-off product.
Question No: 68

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The ______________ allocates joint production costs based on each product’s

share of reve-nue at the split-off point.
sales-to-production-ratio method
physical units method
sales-value-at-split-off method
net realizable value method
Question No: 69
When actual price is higher or lower than the standard price, then it is
Sales price variance
Sales volume variance
Sales mix variance
Sales quantity variance
Question No: 70
Standard time to produce a unit is 80 hours and standard time per hour is Rs
100 per hour. Actual time spent to produce a unit is 90 hours and actual rate
per hour is Rs 110 per hour. Determine labour cost variance.
Rs 1,900 favorable

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Rs 1,100 favorable
Question No: 71
Question No: 72
Distribution expenses would be included in __________.
prime cost

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Rs 75 favorable
Rs 75 unfavorable
Rs 90 unfavorable
Rs 90 favorable
manufacturing overhead
non-production overheads
fixed cost
Question No: 73
Question No: 74

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In a manufacturing firm, the standard quantity of material was set at 10 kg and

standard price was fixed at Rs. 2 per kg. The actual quantity consumed was 12
kg and the actual price paid was Rs. 1.90 per kg. Determine material usage
variance.
Rs 4 favorable
Rs 4 unfavorable
Rs 2.80 unfavorable
Rs 1.20 favorable
Question No: 75
Which of the following would not explain a favorable wage rate variance?
Reduction in power of trade unions
Higher unemployment in industrial sector
New technology
Introduction of minimum wage legislation
Question No: 76
Main purpose of inventory control is to ________.
assist in internal audit
minimize inventory costs
avoid abnormal loss

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increase in market share
Question No: 77
Rs. 125 unfavorable
Rs. 125 favorable
Rs. 900 unfavorable
Rs. 900 favorable
Question No: 78

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A favorable labor variance combined with an adverse wage rate variance could
be caused by:
Higher unemployment in local economy
Introduction of performance related pay
Cost cutting exercises implement by management
Cheaper raw materials imported due to exchange rate depreciati
Question No: 79
If there is a favourable materials price variance then this could be due to:
More wastage of materials incurred
Exchange rate depreciation if materials are imported
Higher wage costs
Inferior quality materials being used
Question No: 80
_______ costs are transferred to Work-in-process.
Indirect labour
Direct labour
Overtime

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Shift allowance
Question No: 81
Question No: 82
Standard costing is the preparation of standard costs and their comparison with
_______ and the analysis of ________.
Marginal costs, Variances
Variances, Marginal costs

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Actual costs, Variances
Variances, Actual costs
Question No: 83
Question No: 84
Indirect costs are main component of __________ costing.

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process
service
batch
job
Question No: 85
________ costing system can easily identity costs related to specified and
customized orders.
Process
Batch
Service
Job
Question No: 86
Service industries includes all except ____________.
hospital
high school
airlines
cement
Question No: 87

40
Continuous operation costing includes __________.
job/batch costing
service costing
periodic costing
throughput costing
Question No: 88

41
Question No: 89
Description
Question No: 90

42
Question No: 91
25%
20%
15%
18%
Question No: 92
In process-2, Rs. 1,000,000 were incurred for further processing of 20,000 units
which were transferred from process-1, taking the total cost of both processes
to Rs. 90/unit. The total cost of process-1 was _________.
Rs. 1800,000

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Rs. 1300,000
Rs. 800,000
Rs. 1,000,000
Question No: 93
Option (iI) is correct
Question No: 94
Output of shoe making factory was finished goods of 4,000 units and closing
inventory of 600 units which are 40% completed. Equivalent units of output
would be ___________ .
240
4240
4600

44
1840
Question No: 95
XYZ Company produces a product which has no WIP inventory. Material cost
Rs. 4,500 (450 units), labour cost Rs. 4,500 and other costs amount to Rs.
6,000. The cost per unit of output would be ____.
Rs. 33
Rs. 20
Rs. 30
Rs.10
Question No: 96
Remainin
g
Rs.18
Rs.9
Rs.15
Rs.12

45
Question No: 97
Process costing is most suitable in industries where__________.
different products are being produced
indirect cost percentage is higher
single product is produced on continuous basis
different types of indirect cost are incurred.
Question No: 98
Direct materials cost
Direct labor cost
Variable manufacturing overhead cost
Fixed manufacturing overhead
Question No: 99

46
Question No: 100
ANSWERS
47
1. B
2. D
3. A
4. B
5. D
6. D
7. A
8. B
9. D
10. A
11. D
12. D
13. D
14. B
15. D
16. B
17. D
18. A
19. C
20. B
21. B
22. D
23. A
24. B
25. A
26. D
27. C
28. B
29. A
30. B
31. C
32. D
33. B
34. D
35. A
36. C

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37. C
38. D
39. C
40. B
41. D
42. A
43. A
44. D
45. D
46. A
47. C
48. A
49. A
50. C
51. D
52. B
53. C
54. D
55. D
56. C
57. A
58. B
59. A
60. A
61. C
62. D
63. D
64. C
65. A
66. B
67. A
68. C
69. A
70. C
71. C
72. C
73. B

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74. B
75. D
76. B
77. B
78. B
79. D
80. B
81. D
82. C
83. B
84. B
85. D
86. D
87. B
88. D
89. C
90. A
91. B
92. C
93. D
94. B
95. A
96. D
97. C
98. D
99. D
100. C

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FCMA MOCK (feb 2020)

FCMA MOCK SYED SHAHBAZ RAZA ZAIDI

Square feet of plant space

Direct labour hours

In a manufacturing company, the cost debited to work-in-process inventory

direct material used, direct labour and manufacturing overhead.

cost of finished goods manufactured.

period cost and product cost.

none of the above.

Indicate which one of the following statements is more descriptive of

Recognized standards are used for presentation.

Information is tailored to the ends of individual decision maker.

Information is more widely distributed.

Emphasis is on past result.

FCMA MOCK SYED SHAHBAZ RAZA ZAIDI

except for normal capacity.

except for practical capacity.

except for expected actual capacity.

for all three levels.

FCMA MOCK SYED SHAHBAZ RAZA ZAIDI

Which of the following would be classified as indirect labor?

Assembly workers in a company manufacturing television.

A stores assistant in a factory store.

Plasters in a constructions company.

An audit clerk in a firm of auditors.

Which of the following are characteristics of services costing?

High levels of indirect costs as a proportion of total cost.

Cost units are often intangible.

Use of composite cost units.

All of the above.

FCMA MOCK SYED SHAHBAZ RAZA ZAIDI

factory overhead control

finished goods control

work in process control

cost of goods sold

The cost unit ______________ is used for electricity cost ascertainment.

FCMA MOCK SYED SHAHBAZ RAZA ZAIDI

Rs. 60,000 over-absorbed.

Rs. 60,000 under-absorbed.

Rs. 110,000 over-absorbed.

Rs. 110,000 under-absorbed.

FCMA MOCK SYED SHAHBAZ RAZA ZAIDI

The salary of supervisor is treated as _________.

direct labour cos

FCMA MOCK SYED SHAHBAZ RAZA ZAIDI

indirect labour cost

admin overhead expense

A company absorbs overhead on machine hours which were budgeted at

Under absorbed by Rs. 2,152

Over absorbed by Rs. 4,058

Under absorbed by Rs. 4,058

Over absorbed by Rs. 2,152

FCMA MOCK SYED SHAHBAZ RAZA ZAIDI

charge only the overtime premium earned to the

charge the hourly wage earned plus the

charge only the overtime premium earned to the

charge the hourly wage earned plus the

A process cost system is employed in those situations where:

a service is performed such as in a law firm or an accounting firm.

full or absorption cost approach is not employed.

FCMA MOCK SYED SHAHBAZ RAZA ZAIDI