571 + Mcqs in Cost Accounting Page 1 McqOptions

1.	Which of the following is / are true with regard to the period of budget?i) the budget period depends on the nature of industryii) master budget is prepared annually while functional budget may be for different periodsiii) Basic budget is the long term budget
A.	only (i) above
B.	only (ii) above
C.	both (i) and (ii) above
D.	all (i), (ii) and (iii) above
Answer» E.

Discussion

2.	Which of the following are purpose of a budget?i) Establishing strategic options ii)Motivating managementiii) Establishing long term objectives iv) Planning operations
A.	(i) and (ii) only
B.	(ii), (iii) and (iv) only
C.	(i) and (iv) only
D.	(ii) and (iv) only
Answer» E.

Discussion

3.	The CIMA definition of zero-based budgeting is set out below, with two blank sections."Zero-based budgeting: A method of budgeting which requires each cost element ____________, as through the activities to which the budget relates ____________."Which combination of two phrases correctly complete the definition?
A.	to be specifically justifies, & were being undertaken for the first time
B.	to be set zero, & could be out-sourced to an external supplier
C.	to be specifically justifies, & could be out-sourced to an external supplier
D.	to be set zero, & were being undertaken for the first time
Answer» B. to be set zero, & could be out-sourced to an external supplier

Discussion

4.	A company estimates its direct material requirements for the month of November 2014 to be Rs. 2,40,000 and the direct labour to be Rs. 1,500,00. It is the policy of the company to absorb overheads as under :Factory overheads 60% of direct wagesAdministrative overheads 20% of work costSelling and distribution overheads 25% of work costit is estimated that the selling and distribution overheads will increase by 15% in November the budgeted sales for the month of November 2014 is
A.	rs. 9,21,600
B.	rs. 8,56,800
C.	rs. 6,87,150
D.	rs. 9,09,900
Answer» C. rs. 6,87,150

Discussion

5.	Which of the following items should be included in a cash budget?(i) Loan repayments (ii) depreciation charges(iii) tax provision (iv) wages paid
A.	(i) and (ii)
B.	(iii) and (iv)
C.	(ii) and (iii)
D.	(i) and (iv)
Answer» E.

Discussion

6.	.is a method of evaluating the job in terms of its money value.
A.	Job analysis
B.	Job evaluation
C.	work measurement
D.	Motion study
Answer» C. work measurement

Discussion

7.	.is concerned with discovery of facts concerning a job and .is concerned with ascertaining the money value of a job.
A.	Job description, job evaluation
B.	job specifications, job evaluation
C.	job analysis, job evaluation
D.	none of these
Answer» D. none of these

Discussion

8.	For conducting ..workers are studied at their jobs and all their movements and motions are noted.
A.	Time study
B.	Motion study
C.	Merit rating
D.	none of these
Answer» C. Merit rating

Discussion

9.	..is maintained to know how the worker s time shown by the time card is spent on various jobs.
A.	Daily time sheets
B.	weekly time sheets
C.	job cards
D.	none of the above
Answer» D. none of the above

Discussion

10.	.. is the assessment of the relative worth of jobs within a company whereas .is the assessment of the relative worth of man behind the job.
A.	Job evaluation , merit rating
B.	job analysis, job evaluation
C.	job analysis, merit rating
D.	none of these
Answer» B. job analysis, job evaluation

Discussion

11.	In this type of costing works are carried out at factory premises:
A.	Job
B.	Contract
C.	Batch
D.	Process
Answer» B. Contract

Discussion

12.	Under this method, homogeneous products are taken as cost unit
A.	Job
B.	Contract
C.	Batch
D.	Process
Answer» D. Process

Discussion

13.	The basis of collection of costs are:-
A.	Materials
B.	Wages
C.	Overheads
D.	All of these
Answer» E.

Discussion

14.	Ascertainment of cost of the product at each process is called: -
A.	Job Costing
B.	Contract Costing
C.	Process Costing
D.	Batch Costing
Answer» D. Batch Costing

Discussion

15.	Which of the following is known as Terminal Costing?
A.	Job Costing
B.	Batch Costing
C.	Process Costing
D.	Contract Costing
Answer» E.

Discussion

16.	Absorption means
A.	Charging of overhead to cost centres
B.	Charging if overhead to cost units
C.	Charging of overhead to cost centres or units
D.	None of the above
Answer» D. None of the above

Discussion

17.	Which of the following is variable cost?
A.	Salaries of higher officers
B.	Prime cost
C.	Insurance cost
D.	Repair cost
Answer» C. Insurance cost

Discussion

18.	Departmentalization of overhead is
A.	Secondary distribution
B.	Primary distribution
C.	Absorption
D.	Allocation
Answer» C. Absorption

Discussion

19.	Process Account is _____.
A.	Nominal A/c
B.	Real A/c
C.	Personal A/c
D.	either Nominal or Real A/c
Answer» B. Real A/c

Discussion

20.	Supervision is charged on the basis of:
A.	Number of employees
B.	Direct material
C.	Direct wages
D.	Area of department
Answer» B. Direct material

Discussion

21.	The first step in a job order cost procedure is
A.	Receiving of order
B.	Estimation of the price of the job
C.	Production order
D.	Receiving an enquiry
Answer» E.

Discussion

22.	________ costing is suitable for mines, quarries, cement works etc.
A.	Process
B.	Contract
C.	Batch
D.	Operation
Answer» E.

Discussion

23.	Job Costing is suitable for
A.	Ship-builders
B.	Furniture makers
C.	Printing presses
D.	All of the above
Answer» E.

Discussion

24.	________ is an extension of job costing.
A.	Process costing
B.	Batch costing
C.	Contract costing
D.	Operation costing
Answer» C. Contract costing

Discussion

25.	The determination of EBQ is influenced by the following factors:
A.	Rate of consumption
B.	Manufacturing cost
C.	Storage cost
D.	All of the above
Answer» E.

Discussion

26.	Purchase requisitions is generally prepared in:
A.	Duplicate
B.	Triplicate
C.	Original
D.	None of these
Answer» C. Original

Discussion

27.	The number of Goods Received Note required to be prepared is:
A.	Six
B.	Five
C.	Four
D.	Three
Answer» C. Four

Discussion

28.	The purchase requisition is generally prepared in:
A.	Duplicate
B.	Triplicate
C.	Quadruplicate
D.	Five copies
Answer» D. Five copies

Discussion

29.	_____ is the time between placement of an order and obtaining delivery.
A.	Purchase time
B.	Lead time
C.	Reordering time
D.	Emergency delivery time
Answer» C. Reordering time

Discussion

30.	Materials which have no demand at present and may be required in future.
A.	Dormant Materials
B.	Obsolete materials
C.	Slow Moving materials
D.	Material in progress
Answer» B. Obsolete materials

Discussion

31.	In which system, output cannot be measured?
A.	Piece rate system
B.	Time rate system
C.	Halsey Plan
D.	Rowan Plan
Answer» C. Halsey Plan

Discussion

32.	The original copy of the purchase order is sent to:
A.	The receiving department
B.	The person who initiated the purchase requisition
C.	The supplier
D.	The accounting department
Answer» D. The accounting department

Discussion

33.	When remuneration is paid based on units produced, the system is called
A.	bonus system
B.	time rate system
C.	premium plan
D.	piece rate system
Answer» E.

Discussion

34.	Monetary benefits include: -
A.	Basic wages
B.	Subsidized food
C.	Medical facilities
D.	Subsidized housing
Answer» B. Subsidized food

Discussion

35.	Taylors differential piece rate system provides for higher rate to .workers.
A.	Inefficient
B.	efficient
C.	both a & b
D.	lazy
Answer» C. both a & b

Discussion

36.	The main objective of cost accounting is
A.	Recording of cost
B.	Fixation of selling price
C.	Cost control
D.	Maximize profit
Answer» D. Maximize profit

Discussion

37.	Works cost include
A.	Direct Material + Direct Labour + Chargeable Expenses
B.	Direct Material + Direct Labour + Office Overheads
C.	Direct Material + Direct Labour + Direct Expenses + Works Expenses
D.	None of the above
Answer» D. None of the above

Discussion

38.	Prime cost may be correctly defined as
A.	the sum of direct materials and direct labour cost with all other costs excluded
B.	the total of all cost item
C.	the total cost incurred in producing a finished unit
D.	none of the above
Answer» B. the total of all cost item

Discussion

39.	The term cost refers to
A.	an asset that has given benefit and is now expired.
B.	the value of the sacrifice made to acquire goods or services
C.	the present value of future benefits
D.	none of the above
Answer» C. the present value of future benefits

Discussion

40.	Profit is:
A.	Sales minus factory cost
B.	Sales minus cost of production
C.	Sales minus cost of sales
D.	Sales minus cost of goods sold
Answer» D. Sales minus cost of goods sold

Discussion

41.	The limitations of has led to the development of standard costing system.
A.	Historical costing system
B.	cost accounting
C.	management accounting
D.	none of these
Answer» B. cost accounting

Discussion

42.	A favourable variance will arise when capital revenues are ..than expected.
A.	More
B.	Less
C.	Lesser
D.	None of the above
Answer» B. Less

Discussion

43.	The main objective of cost accounting is:
A.	Ascertainment of cost
B.	Control of cost
C.	Determination of selling price
D.	All of the above
Answer» E.

Discussion

44.	The expected return or benefit foregone in rejecting one course of action for the other is known as
A.	sunk cost
B.	opportunity cost
C.	conversion cost
D.	differential cost
Answer» C. conversion cost

Discussion

45.	The cost can be controlled by:
A.	Standard Costing
B.	Budgetary Control
C.	Proper presentation
D.	All of these
Answer» E.

Discussion

46.	Which of the following is not included in cost?
A.	Consumable stores
B.	Dividend
C.	Indirect labour
D.	Distribution overheads
Answer» C. Indirect labour

Discussion

47.	Under Merrick s multiple piece rate system, 110% of the ordinary piece rate is given to workers whose level of performance is between . of the standard output.
A.	83% and 100%
B.	100% and 120%
C.	0% and 83%
D.	none of these
Answer» B. 100% and 120%

Discussion

48.	is the maximum possible alternative earning that might have been earned if the productive capacity is put to some alternative use.
A.	Opportunity
B.	incremental revenue
C.	alternative revenue
D.	none of these
Answer» B. incremental revenue

Discussion

49.	Under Merrick s multiple piece rate system, 120% of the ordinary piece rate is given to workers whose level of performance is between .of the standard output.
A.	83% and 100%
B.	100% and 120%
C.	0% and 83%
D.	none of these
Answer» C. 0% and 83%

Discussion

50.	Under Merrick s multiple piece rate system, ordinary piece rate is given to workers whose level of performance is between .of the standard output.
A.	0% and 100%
B.	0% and 120%
C.	0% and 83%
D.	none of these
Answer» D. none of these

Discussion

Explore topic-wise MCQs in Bachelor of Management Studies (BMS).

Which of the following is / are true with regard to the period of budget?i) the budget period depends on the nature of industryii) master budget is prepared annually while functional budget may be for different periodsiii) Basic budget is the long term budget

Which of the following are purpose of a budget?i) Establishing strategic options ii)Motivating managementiii) Establishing long term objectives iv) Planning operations

Which of the following items should be included in a cash budget?(i) Loan repayments (ii) depreciation charges(iii) tax provision (iv) wages paid

.is a method of evaluating the job in terms of its money value.

.is concerned with discovery of facts concerning a job and .is concerned with ascertaining the money value of a job.

For conducting ..workers are studied at their jobs and all their movements and motions are noted.

..is maintained to know how the worker s time shown by the time card is spent on various jobs.

.. is the assessment of the relative worth of jobs within a company whereas .is the assessment of the relative worth of man behind the job.

In this type of costing works are carried out at factory premises:

Under this method, homogeneous products are taken as cost unit

The basis of collection of costs are:-

Ascertainment of cost of the product at each process is called: -

Which of the following is known as Terminal Costing?

Absorption means

Which of the following is variable cost?

Departmentalization of overhead is

Process Account is _____.

Supervision is charged on the basis of:

The first step in a job order cost procedure is

________ costing is suitable for mines, quarries, cement works etc.

Job Costing is suitable for

________ is an extension of job costing.

The determination of EBQ is influenced by the following factors:

Purchase requisitions is generally prepared in:

The number of Goods Received Note required to be prepared is:

The purchase requisition is generally prepared in:

_____ is the time between placement of an order and obtaining delivery.

Materials which have no demand at present and may be required in future.

In which system, output cannot be measured?

The original copy of the purchase order is sent to:

When remuneration is paid based on units produced, the system is called

Monetary benefits include: -

Taylors differential piece rate system provides for higher rate to .workers.

The main objective of cost accounting is

Works cost include

Prime cost may be correctly defined as

The term cost refers to

Profit is:

The limitations of has led to the development of standard costing system.

A favourable variance will arise when capital revenues are ..than expected.

The main objective of cost accounting is:

The expected return or benefit foregone in rejecting one course of action for the other is known as

The cost can be controlled by:

Which of the following is not included in cost?

Under Merrick s multiple piece rate system, 110% of the ordinary piece rate is given to workers whose level of performance is between . of the standard output.

is the maximum possible alternative earning that might have been earned if the productive capacity is put to some alternative use.

Under Merrick s multiple piece rate system, 120% of the ordinary piece rate is given to workers whose level of performance is between .of the standard output.

Under Merrick s multiple piece rate system, ordinary piece rate is given to workers whose level of performance is between .of the standard output.