When the abnormal has a scrape value the net cost of abnormal loss (cost of abnormal loss minus its scrap value) is then transferred as a cost to the cost accounting income statement at the end of the accounting period.

The above statement is incorrect

The items recorded on job cost sheet would include:

Job number, description of job, specifications, etc.

Customer details, estimated costs, selling price, estimated profit

Delivery date promised, actual delivery date, delivery note number

. The total amount of factory overhead represents:

Share of service department costs

A computerised job accounting system contain which of the following features:

Every job will be given a job code number, which will determine how the data relating to the job is stored.

A separate set of codes will be given for the type of costs that any job is likely to incur. Thus ‘direct wages’, say, will have the same code whichever job they are allocated to.

In a sophisticated system, costs can be analysed both by job (for example all costs related to Job 456), but also by type (for example direct wages incurred on all jobs). It is therefore easy to perform control analysis and to make comparisons between jobs.

Identify the circumstances where under- or over-recovery of overhead will occur:

Actual overhead costs are different from budgeted overheads

The actual activity level is different from the budgeted activity level

Actual overhead costs and actual activity level differ from the budgeted costs and level

. Which of the following is most likely to be an allocated productionoverhead cost to the finishing cost centre?

Salary of the production manager.

Salary of the finishing cost centre supervisor.

Power used on finishing cost centre machines.

Salary of the production manager.

Blanket overhead rates are not appropriate in the following circumstances.

There is more than one department

Jobs do not spend an equal amount of time in each department

To control costs it is essential to keep control on

Indirect materials and tools cost

. What would be the most appropriate way of apportioning depreciation costs acrossdifferent manufacturing departments in a business?

Value of buildings and equipment

Administration overheads and sales and distribution overheads are not absorbed into product costs. Instead, they are treated in full as an expense in the financial period to which they relate.

The above statement is incorrect

It is possible to use a job costing system to control the costs of an internal service department, such as the maintenance department and the printing department.

The above statement is incorrect

How are the sales proceeds from by-products treated?

As revenue (adding it to the revenue from sales of other products)

The monetary value attributed to normal losses in a process should be

A share of the process cost according to the stage of completion of the losses.

A nil value with no other monetary adjustment under any circumstances.

A full share of process cost on the same as good output.

A nil share of process costs which have been reduced by the scrap value of the normal loss.

The physical flow of units into and out of departments is shown on the:

Cost of Accounted for schedule.

Non-production overheads might be added to the cost of the job:

As a percentage of the prime cost of the job

As a percentage of the production cost of the job

2081 + Mcqs in Accounting Page 6 McqOptions

251.	Sharing the costs of the service centres between the production centres is called:
A.	Reapportionment
B.	Reallocation
C.	Secondary apportionment
D.	None
Answer» C. Secondary apportionment

252.	When cash ratio is …….. retention money is 13%.
A.	50%
B.	87%
C.	78%
D.	99%
Answer» C. 78%

253.	When the abnormal has a scrape value the net cost of abnormal loss (cost of abnormal loss minus its scrap value) is then transferred as a cost to the cost accounting income statement at the end of the accounting period.
A.	The above statement is correct
B.	The above statement is incorrect
C.	none
D.	none
Answer» B. The above statement is incorrect

254.	In cinema halls, composite cost unit is ________________:
A.	A seat per show
B.	Cost of screening
C.	Salary of staff
D.	Rent of cinema hall
Answer» B. Cost of screening

255.	The items recorded on job cost sheet would include:
A.	Job number, description of job, specifications, etc.
B.	Customer details, estimated costs, selling price, estimated profit
C.	Delivery date promised, actual delivery date, delivery note number
D.	All of the above
Answer» E.

256.	. The total amount of factory overhead represents:
A.	Allocated costs
B.	Apportioned costs
C.	Share of service department costs
D.	All of the above
Answer» E.

257.	Escalation Clause aims at safeguarding the interest of the ……………….against unforeseen rise in cost.
A.	Contractor.
B.	Contractee
C.	Builder
D.	Party
Answer» B. Contractee

258.	Total costs incur in a production process, is divided by total number of output units tocalculate the
A.	unit costs
B.	cost of direct material
C.	cost of direct labour
D.	cost of indirect labour
Answer» B. cost of direct material

259.	Apportionment means sharing on a reasonable basis. Many overhead costs are costs that cannot be allocated directly to one cost centre, because they are shared by two or more cost centres. These costs are apportioned between the cost centres.
A.	Incorrect
B.	Correct
C.	none
D.	none
Answer» C. none

260.	Sub contract cost is always to be treated as ……………….to the contract.
A.	Indirect charge
B.	Direct charge
C.	Income
D.	Revenue
Answer» B. Direct charge

261.	A computerised job accounting system contain which of the following features:
A.	Every job will be given a job code number, which will determine how the data relating to the job is stored.
B.	A separate set of codes will be given for the type of costs that any job is likely to incur. Thus ‘direct wages’, say, will have the same code whichever job they are allocated to.
C.	In a sophisticated system, costs can be analysed both by job (for example all costs related to Job 456), but also by type (for example direct wages incurred on all jobs). It is therefore easy to perform control analysis and to make comparisons between jobs.
D.	All of the above
Answer» E.

268.	Overheads can be absorbed into cost units by means of:• Physical unit produced • Percentage of prime cost • Percentage of direct wages • Direct labour hour rate • Machine hour rate
A.	All of the above
B.	(I) (IV) and (V) only
C.	(IV) and (V) only
D.	None
Answer» B. (I) (IV) and (V) only

273.	Cost of defective materials should be……………………to costing P/L accountand……………….to contract account.
A.	Debited, Credited
B.	Credited, Debited
C.	Charged, record
D.	Record, Apply
Answer» B. Credited, Debited

274.	If cost incurred for work in process inventory is ₹350000 and total equivalent unitscompleted till date are 3500, then weighted average cost will be
A.	₹1,200
B.	₹1,000
C.	₹100
D.	₹10
Answer» D. ₹10

277.	The relative sales value method is the most widely used method of apportioning joint costs because (ignoring the effect of further processing costs) it assumes that all products achieve the same profit margin.
A.	True
B.	False
C.	none
D.	none
Answer» B. False

262.	Absorption rates are used to add overhead costs to:
A.	The Admin costs
B.	Other expenses
C.	The costs of production
D.	None
Answer» C. The costs of production

263.	All such expenses which are incurred for creating and enhancing the demands for theproducts are
A.	Selling expenses
B.	Administrative expenses
C.	Distribution expenses
D.	All of the above
Answer» E.

264.	It is possible to have abnormal loss and abnormal gain on the same process accountin the same period.
A.	False
B.	True
C.	none
D.	none
Answer» B. True

265.	Identify the circumstances where under- or over-recovery of overhead will occur:
A.	Actual overhead costs are different from budgeted overheads
B.	The actual activity level is different from the budgeted activity level
C.	Actual overhead costs and actual activity level differ from the budgeted costs and level
D.	All of the above
Answer» D. All of the above

266.	. Which of the following is most likely to be an allocated productionoverhead cost to the finishing cost centre?
A.	Factory rates.
B.	Salary of the finishing cost centre supervisor.
C.	Power used on finishing cost centre machines.
D.	Salary of the production manager.
Answer» D. Salary of the production manager.

267.	Blanket overhead rates are not appropriate in the following circumstances.
A.	There is more than one department
B.	Jobs do not spend an equal amount of time in each department
C.	Both A&B
D.	None
Answer» C. Both A&B

269.	Which of the following calculate the actual cost of product:
A.	Cost estimation
B.	Costing
C.	Both a and b
D.	None of these
Answer» E.

270.	To control costs it is essential to keep control on
A.	Prime cost
B.	Overheads
C.	Indirect materials and tools cost
D.	All of the above
Answer» E.

271.	. What would be the most appropriate way of apportioning depreciation costs acrossdifferent manufacturing departments in a business?
A.	Floor space
B.	Numbers of personnel
C.	Value of buildings and equipment
D.	Value of land.
Answer» E.

272.	Administration overheads and sales and distribution overheads are not absorbed into product costs. Instead, they are treated in full as an expense in the financial period to which they relate.
A.	The above statement is correct
B.	The above statement is incorrect
C.	none
D.	none
Answer» B. The above statement is incorrect

Explore topic-wise MCQs in Finance & Accounting.

Sharing the costs of the service centres between the production centres is called:

When cash ratio is …….. retention money is 13%.

When the abnormal has a scrape value the net cost of abnormal loss (cost of abnormal loss minus its scrap value) is then transferred as a cost to the cost accounting income statement at the end of the accounting period.

In cinema halls, composite cost unit is ________________:

The items recorded on job cost sheet would include:

. The total amount of factory overhead represents:

Escalation Clause aims at safeguarding the interest of the ……………….against unforeseen rise in cost.

Total costs incur in a production process, is divided by total number of output units tocalculate the

Apportionment means sharing on a reasonable basis. Many overhead costs are costs that cannot be allocated directly to one cost centre, because they are shared by two or more cost centres. These costs are apportioned between the cost centres.

Sub contract cost is always to be treated as ……………….to the contract.

A computerised job accounting system contain which of the following features:

Absorption rates are used to add overhead costs to:

All such expenses which are incurred for creating and enhancing the demands for theproducts are

It is possible to have abnormal loss and abnormal gain on the same process accountin the same period.

Identify the circumstances where under- or over-recovery of overhead will occur:

. Which of the following is most likely to be an allocated productionoverhead cost to the finishing cost centre?

Blanket overhead rates are not appropriate in the following circumstances.

Overheads can be absorbed into cost units by means of:• Physical unit produced • Percentage of prime cost • Percentage of direct wages • Direct labour hour rate • Machine hour rate

Which of the following calculate the actual cost of product:

To control costs it is essential to keep control on

. What would be the most appropriate way of apportioning depreciation costs acrossdifferent manufacturing departments in a business?

Administration overheads and sales and distribution overheads are not absorbed into product costs. Instead, they are treated in full as an expense in the financial period to which they relate.

Cost of defective materials should be……………………to costing P/L accountand……………….to contract account.

If cost incurred for work in process inventory is ₹350000 and total equivalent unitscompleted till date are 3500, then weighted average cost will be

It is possible to use a job costing system to control the costs of an internal service department, such as the maintenance department and the printing department.

How are the sales proceeds from by-products treated?

The relative sales value method is the most widely used method of apportioning joint costs because (ignoring the effect of further processing costs) it assumes that all products achieve the same profit margin.

If the normal loss has no scrap value it is given a nil value.

Overhead is actually the total of:

The monetary value attributed to normal losses in a process should be

Economic Batch Quantity depends on ……………….and ……………..costs.

Wages paid to a office cleaning staff who was engaged in Administration activities acan be termed as.

The physical flow of units into and out of departments is shown on the:

In order to calculate a cost for each joint product, the common costs must be________ between the joint products.

The normal loss is something that is unavoidable in order to get the good output. The cost of the lost units is part of the cost of obtaining the good output.

Joint Cost are ………………to individual joint products.

A cost that changes in total dollar amount with the change in the level of activity isknown as:

Which of the following is a valid classification of the salary paid to the foreman incharge of the packing department?

Overhead absorption is sometimes called overhead recovery.

Normal loss is ___________in the normal course of events. It is inherent in the physical and chemical reactions that take place in a process.

Production overheads represent indirect materials, indirect wages and indirect expenses attributable to:

Which of the following is not included in functional classification of overheads?

Which of the following would not be considered as a component of 'cost'of stock?

Which of the following costs of management is likely to have least control?

The over-absorbed overhead is accounted for as an adjustment to the profit inthe period, and is added to profit in the cost accounting income statement.

Batch costing is similar to job costing in that each batch of similar articles isseparately identifiable.

The difference between total actual loss and normal loss is abnormal loss.

The reciprocal apportionment and can be done using:

Non-production overheads might be added to the cost of the job:

The cost per unit manufactured in a batch is the total batch cost divided by thenumber of units in the batch.

275.	It is possible to use a job costing system to control the costs of an internal service department, such as the maintenance department and the printing department.
A.	The above statement is correct
B.	The above statement is incorrect
C.	none
D.	none
Answer» B. The above statement is incorrect

276.	How are the sales proceeds from by-products treated?
A.	As revenue (adding it to the revenue from sales of other products)
Answer» E.

278.	If the normal loss has no scrap value it is given a nil value.
A.	False
B.	True
C.	none
D.	none
Answer» C. none

279.	Overhead is actually the total of:
A.	Indirect materials
B.	Indirect expenses
C.	Indirect labour
D.	All of the above
Answer» E.

280.	The monetary value attributed to normal losses in a process should be
A.	A share of the process cost according to the stage of completion of the losses.
B.	A nil value with no other monetary adjustment under any circumstances.
C.	A full share of process cost on the same as good output.
D.	A nil share of process costs which have been reduced by the scrap value of the normal loss.
Answer» E.

281.	Economic Batch Quantity depends on ……………….and ……………..costs.
A.	Material, labour
B.	set-up costs, carrying
C.	transportation, carrying
D.	warehousing, labour
Answer» C. transportation, carrying

282.	Wages paid to a office cleaning staff who was engaged in Administration activities acan be termed as.
A.	direct cost.
B.	indirect cost
C.	sunk cost
D.	imputed cost.
Answer» C. sunk cost

283.	The physical flow of units into and out of departments is shown on the:
A.	Quantities schedule.
B.	Emulgent production schedule.
C.	Cost of account for schedule.
D.	Cost of Accounted for schedule.
Answer» B. Emulgent production schedule.

284.	In order to calculate a cost for each joint product, the common costs must be________ between the joint products.
A.	Identified
B.	Allocated
C.	Apportioned
D.	None
Answer» D. None

285.	The normal loss is something that is unavoidable in order to get the good output. The cost of the lost units is part of the cost of obtaining the good output.
A.	True
B.	False
C.	none
D.	none
Answer» B. False