MCQOPTIONS
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MCQOPTIONS
This section includes 571 Mcqs, each offering curated multiple-choice questions to sharpen your Bachelor of Management Studies (BMS) knowledge and support exam preparation. Choose a topic below to get started.
| 251. |
. This is a level at which normal issues of materials are stopped and urgent action is taken for procurement of materials |
| A. | Minimum level |
| B. | Maximum level |
| C. | Re-order level |
| D. | Danger level |
| Answer» E. | |
| 252. |
Method of pricing materials issued which is based upon the assumption that materials which are purchased first are issued first. |
| A. | LIFO |
| B. | FIFO |
| C. | HIFO |
| D. | NIFO |
| Answer» C. HIFO | |
| 253. |
A technique of inventory control where materials are analyzed according to their values so that costly and more valuable materials are given greater attention and care. |
| A. | Economic Order Quantity |
| B. | ABC technique |
| C. | Stock Level |
| D. | Perpetual inventory system |
| Answer» C. Stock Level | |
| 254. |
In this technique of selective control, materials are analysed according to their value so that costly and more valuable materials are given greater attention and care |
| A. | Economic order quantity |
| B. | ABC technique |
| C. | Material budgets |
| D. | Minimum level |
| Answer» C. Material budgets | |
| 255. |
Under which method materials received first are issued first? |
| A. | LIFO |
| B. | FIFO |
| C. | HIFO |
| D. | None of these |
| Answer» C. HIFO | |
| 256. |
If maximum consumption is 300 units per day; minimum consumption is 200 units per day; and re-order period is 8 to 10 days, then what will be the re-order level? |
| A. | 3,000 units |
| B. | 4,000 units |
| C. | 1,500 units |
| D. | 2,400 units |
| Answer» B. 4,000 units | |
| 257. |
The cost which is to be incurred even when a business unit is closed is a ____ cost. |
| A. | Imputed |
| B. | Historical |
| C. | Opportunity |
| D. | Shutdown |
| Answer» E. | |
| 258. |
Cost of production is equal to: |
| A. | Prime cost plus works costs |
| B. | Total cost minus Prime cost |
| C. | Works cost plus Administrative cost |
| D. | Prime cost plus Administrative cost |
| Answer» D. Prime cost plus Administrative cost | |
| 259. |
If re-ordering level is 450 units while consumption of materials are 25-27 units and materials are received within 4-6 weeks, the minimum level will be |
| A. | 100 units |
| B. | 200 units |
| C. | 150 units |
| D. | 250 units |
| Answer» C. 150 units | |
| 260. |
Cost accounting provides detailed information about of various products, processes, services and operations. |
| A. | Costs |
| B. | income |
| C. | either a or b |
| D. | none of these. |
| Answer» B. income | |
| 261. |
The level above which stock should not normally be allowed to rise. |
| A. | Minimum Level |
| B. | Danger level |
| C. | Re-order Level |
| D. | Maximum Level |
| Answer» E. | |
| 262. |
Batch costing is a form of specific order/job costing where the cost per unit is ascertained by _________ the total cost of a batch by the number of items produced in that batch. |
| A. | dividing |
| B. | multiplying |
| C. | subtracting |
| D. | adding |
| Answer» E. | |
| 263. |
Each job has a .. prepared for it that bears the job number and which is used to collect all cost data relating to job. |
| A. | Job Time Sheet |
| B. | Job Cost Card |
| C. | Job Ticket |
| D. | Job Account |
| Answer» C. Job Ticket | |
| 264. |
A cost centre is |
| A. | a production or service location, function, activity or item of equipment whose costs may be attributed to cost units |
| B. | acentre for which an individual budget is drawn-up |
| C. | acentre where cost is classified on the basis of variability |
| D. | an amount of expenditure attributable to an activity |
| Answer» B. acentre for which an individual budget is drawn-up | |
| 265. |
A company has the following budget for the six month:Finished product MaterialsSales - 7,000 units Usage per unit - 3 kgProduction units - 7200 units Opening stock - 400 kgClosing stock - 500 kgWhat is the material purchase budget for the month? |
| A. | 21,700 kg |
| B. | 20,900 kg |
| C. | 21,100 kg |
| D. | 21,500 kg |
| Answer» B. 20,900 kg | |
| 266. |
An important feature of a cost centre is that: |
| A. | it uses only monetary information |
| B. | it has a clearly defined boundaries |
| C. | it must be one specific location only |
| D. | none of the above |
| Answer» C. it must be one specific location only | |
| 267. |
.budget may be classified into material cost budget, labour cost budget and overhead budget. |
| A. | Cost of Production |
| B. | purchase |
| C. | sales |
| D. | Cash |
| Answer» B. purchase | |
| 268. |
The following details have been extracted from the debtors collection records of X limited:Invoices paid in the month after sale 60%Invoices pain in the second month after sale 20%Invoices paid in the third month after sale 15%Bad debts 5%Credit sales for June to August 2014 or budgeted as follows:June Rs. 1,00,000July Rs. 1,50,000August Rs. 1,30,000customers pain in the month after sale are entitled to deduct a 2% cash discount. Invoices are issued on the last day of the month. The amount budgeted to be received in September 2014 from credit sales is |
| A. | rs. 1,16,750 |
| B. | rs. 1,15,190 |
| C. | rs. 1,23,000 |
| D. | rs. 1,21,440 |
| Answer» E. | |
| 269. |
Which materials do not normally form a past of finished goods: - |
| A. | Indirect materials |
| B. | Direct materials |
| C. | Indirect labor |
| D. | None of these |
| Answer» B. Direct materials | |
| 270. |
ABC ltd. uses the following flexible budget formula to annual maintenance cost:Total cost = Rs. 6720 + Rs. 0.64 for machine hourThe current month's budget is based on 20,000 hours of planned machine time. The maintenance cost included in this flexible budget for the current month is |
| A. | rs. 12,800 |
| B. | rs. 13,360 |
| C. | rs. 12,240 |
| D. | rs. 13,600 |
| Answer» C. rs. 12,240 | |
| 271. |
A statement prepared to provide detailed cost of a cost centre or cost unit is |
| A. | Cost account |
| B. | Cost sheet |
| C. | Reconciliation statement |
| D. | Profit & loss a/c |
| Answer» C. Reconciliation statement | |
| 272. |
A company is preparing a production budget for the next year. The following information is relevant :Budgeted sales 10,000 unitsOpening stock 600 unitsClosing stock 5% of budgeted salesThe production process is such that 10% of the units produced are rejected.What is the number of units required to be produced to meet demand? |
| A. | 8,900 units |
| B. | 9,900 units |
| C. | 11,000 units |
| D. | 10,900 units |
| Answer» D. 10,900 units | |
| 273. |
Labour which takes an active and direct part in the production of a product is known as |
| A. | direct labour |
| B. | manufacturing labour |
| C. | process labour |
| D. | All of the above |
| Answer» E. | |
| 274. |
Defectives are that portion of production which can be at some extra cost of re-operation. |
| A. | Sold |
| B. | rectified |
| C. | purchased |
| D. | none of these |
| Answer» C. purchased | |
| 275. |
ABC Ltd. has prepared the cash budget for the year 2014-2015 and provided the following information pertaining to sales value :Month Rs.April 2014 2,50,000May 2014 2,80,000June 2014 3,20,000July 2014 3,50,00020% of the monthly sales are expected to be on cash basis. 60% of the credit sales are expected to be realised in the month following the month of sales and remaining 40% are expected to be realized in the second month following the month of sale.The estimated cash receipts in the month of June 2014 are: |
| A. | rs. 2,78,400 |
| B. | rs. 3,00,000 |
| C. | rs. 3,20,000 |
| D. | rs. 3,32,000 |
| Answer» B. rs. 3,00,000 | |
| 276. |
The following details have been extracted from the debtors collection records of X limited:Invoices paid in the month after sale 60%Invoices pain in the second month after sale 20%Invoices paid in the third month after sale 15%Bad debts 5%Credit sales for June to August 2014 or budgeted as follows:June Rs. 1,00,000July Rs. 1,50,000August Rs. 1,30,000customers pain in the month after sale are entitled to deduct a 2% cash discount. Invoices are issued on the last day of the month. The amount budgeted to be received in September 2014 from credit sales is |
| A. | rs. 1,16,750 |
| B. | rs. 1,15,190 |
| C. | rs. 1,23,000 |
| D. | rs. 1,21,440 |
| Answer» E. | |
| 277. |
ABC Ltd. has furnished the following information for 4,000 units of product for the year 2014-2015 :Particulars Rs.Direct materials 2,50,000Direct labour 2,00,000Manufacturing overheads 2,80,000 (40 % fixed)Selling and administrative overheads 2,70,000 (30 % fixed)The total cost of 4,380 unit is |
| A. | rs. 10,80,120 |
| B. | rs. 10,42,500 |
| C. | rs. 10,95,000 |
| D. | rs. 10,76,665 |
| Answer» E. | |
| 278. |
ABC ltd. uses the following flexible budget formula to annual maintenance cost:Total cost = Rs. 6720 + Rs. 0.64 for machine hourThe current month's budget is based on 20,000 hours of planned machine time. The maintenance cost included in this flexible budget for the current month is |
| A. | rs. 12,800 |
| B. | rs. 13,360 |
| C. | rs. 12,240 |
| D. | rs. 13,600 |
| Answer» C. rs. 12,240 | |
| 279. |
PP Ltd is preparing the production and material purchase budgets for one of their products,The SUPERX for the forthcoming year.The following information is available:Sales demand (units) 30000Material usage per unit 7 kgsEstimated opening inventory 3500 unitsRequired closing inventory 35% higher than opening inventoryHow many units of the SUPERX will need to be produced? |
| A. | 31225 |
| B. | 30000 |
| C. | 28775 |
| D. | 38225 |
| Answer» B. 30000 | |
| 280. |
A company has the following budget for the six month:Finished product MaterialsSales - 7,000 units Usage per unit - 3 kgProduction units - 7200 units Opening stock - 400 kg Closing stock - 500 kgWhat is the material purchase budget for the month? |
| A. | 21,700 kg |
| B. | 20,900 kg |
| C. | 21,100 kg |
| D. | 21,500 kg |
| Answer» B. 20,900 kg | |
| 281. |
A company is preparing a production budget for the next year. The following information is relevant :Budgeted sales 10,000 unitsOpening stock 600 unitsClosing stock 5% of budgeted salesThe production process is such that 10% of the units produced are rejected.What is the number of units required to be produced to meet demand? |
| A. | 8,900 units |
| B. | 9,900 units |
| C. | 11,000 units |
| D. | 10,900 units |
| Answer» D. 10,900 units | |
| 282. |
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 | |
| 283. |
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 | |
| 284. |
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. | |
| 285. |
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. | |
| 286. |
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. | |
| 287. |
The budget that is prepared first of all is………….. |
| A. | Cash budget |
| B. | master budget |
| C. | budget for the key factor |
| D. | sales budget |
| Answer» D. sales budget | |
| 288. |
……………….helps in ascertaining costs beforehand. |
| A. | Financial accounting |
| B. | cost accounting |
| C. | management accounting |
| D. | none of these |
| Answer» C. management accounting | |
| 289. |
The method of costing applied in biscuit industries is ………….costingand in steel industry………….costing. |
| A. | Job, process |
| B. | job, contract |
| C. | batch, multiple |
| D. | process, operation |
| Answer» B. job, contract | |
| 290. |
Where raw material is to pass certain stages, before it is convertedinto finished goods, the method of costing used is………………… |
| A. | Job costing |
| B. | Operating costing |
| C. | Process Costing |
| D. | both b and c |
| Answer» D. both b and c | |
| 291. |
Sunk costs are ………………. for decision-making |
| A. | irrelevant |
| B. | relevant |
| C. | useful |
| D. | none of these. |
| Answer» B. relevant | |
| 292. |
Cost of production is equal to …………………… |
| A. | Works cost plus Administration Overheads |
| B. | Prime cost plus Works cost |
| C. | prime cost plus works overhead |
| D. | works overhead plus administration overheads |
| Answer» B. Prime cost plus Works cost | |
| 293. |
The limitations of …………………………has led to the development ofstandard costing system. |
| A. | Historical costing system |
| B. | cost accounting |
| C. | management accounting |
| D. | none of these |
| Answer» B. cost accounting | |
| 294. |
……………is the cost which involves payment to outsiders. |
| A. | Out of pocket cost |
| B. | Imputed cost |
| C. | notional cost |
| D. | none of these |
| Answer» B. Imputed cost | |
| 295. |
For conducting …………………..workers are studied at their jobs andall their movements and motions are noted. |
| A. | Time study |
| B. | Motion study |
| C. | Merit rating |
| D. | none of these |
| Answer» C. Merit rating | |
| 296. |
Works cost is a total of……………… |
| A. | Indirect material, Indirect labour |
| B. | Direct material, direct labour, direct or chargeable expenses and works expenses |
| C. | Direct material, direct labour |
| D. | Indirect material, Indirect labour, Indirect expenses |
| Answer» C. Direct material, direct labour | |
| 297. |
In electricity supply company uses …………….as cost unit. |
| A. | Kilo watt hour |
| B. | per household |
| C. | voltage |
| D. | none of these |
| Answer» B. per household | |
| 298. |
Variable cost increases with ………….in output. |
| A. | Increase |
| B. | decrease |
| C. | increase or decrease |
| D. | none of these. |
| Answer» B. decrease | |
| 299. |
Calendar Ratio = |
| A. | Number of actual working days in a period x 100 Number of working days in the budget period |
| B. | Actual hours worked x 100 Budgeted hours |
| C. | Standard hours for actual production x 100 Actual hours worked |
| D. | Standard hours for actual productionx 100 Budgeted standard hours |
| Answer» B. Actual hours worked x 100 Budgeted hours | |
| 300. |
The cost of …………..process loss is absorbed in the cost of productionof good units. |
| A. | Abnormal |
| B. | normal |
| C. | both a & b |
| D. | none of these |
| Answer» C. both a & b | |