Cost Accounting Quiz
1) Which of these is not an objective of Cost Accounting?
- Ascertainment of Cost
- Determination of Selling Price
- Cost Control and Cost reduction
- Assisting Shareholders in decision making
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The Correct Answer for the given question is Option D)Assisting Shareholders in decision making.
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2) Uncontrollable costs are the costs which be influenced by the action of a specified member of an undertaking.
- cannot
- can
- may or may not
- must
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The Correct Answer for the given question is Option D) there is a clearly identifiable parent.
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3) Describe the cost unit applicable to the Bicycle industry:
- EP-CMA
- per part of bicycle
- per bicycle
- per tonne
- per day
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The Correct Answer for the given question is Option D) there is a clearly identifiable parent.
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Q.13. Calculate the prime cost from the following information:
Direct material purchased: Rs. 1,00,000
Direct material consumed: Rs. 90,000
Direct labour: Rs. 60,000
Direct expenses: Rs. 20,000
Manufacturing overheads: Rs. 30,000
Rs. 1,80,000
Rs. 2,00,000
Rs. 1,70,000
Rs. 2,10,000
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The Correct Answer for the given question is Option D) there is a clearly identifiable parent.
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Q. 14. Total cost of a product: Rs. 10,000 Profit: 25% on Selling Price Profit is:
Rs. 2,500
Rs. 3,000
Rs. 3,333
Rs. 2,000
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The Correct Answer for the given question is Option D) there is a clearly identifiable parent.
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Q.15. Calculate cost of sales from the following:
Net Works cost: Rs. 2,00,000
Office & Administration Overheads: Rs. 1,00,000
Opening stock of WIP: Rs. 10,000
Closing Stock of WIP: Rs. 20,000
Closing stock of finished goods: Rs. 30,000
There was no opening stock of finished goods.
Selling overheads: Rs. 10,000
(a) Rs. 2,70,000
(b) Rs. 2,80,000
(c) Rs. 3,00,000
(d) Rs. 3,20,000
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The Correct Answer for the given question is Option D) there is a clearly identifiable parent.
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Q.16. Calculate value of closing stock from the following:
Opening stock of finished goods (500 units) : Rs. 2,000
Test Paper 563
Cost of production (10000 units) : Rs. 50,000
Closing stock (1000 units):?
Rs. 4,000
Rs. 4,500
Rs. 5,000
Rs. 6,000
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The Correct Answer for the given question is Option D) there is a clearly identifiable parent.
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Q. 17. Which of these is not a Material control technique:
ABC Analysis
Fixation of raw material levels
Maintaining stores ledger
Control over slow moving and non moving items
Receiving purchase requisition
Exploring the sources of material supply
Preparation and execution of purchase orders
Accounting for material received
Quantitative as well as value wise records of material received, issued and balance;
Quantitative record of material received, issued and balance
Value wise records of material received, issued and balance
a record of labour attendance
Quantitative as well as value wise records of material received, issued and balance;
Quantitative record of material received, issued and balance
Value wise records of material received, issued and balance
a record of labour attendance
Maximum consumption x Maximum re-order period
Minimum consumption x Minimum re-order period
1/2 of (Minimum + Maximum consumption)
Maximum level – Minimum level
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The Correct Answer for the given question is Option D) there is a clearly identifiable parent.
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Q.22. Economic order quantity is that quantity at which cost of holding and carrying inventory is:
(a) Maximum and equal
EP-CMA
Minimum and equal
It can be maximum or minimum depending upon case to case.
Minimum and unequal
Inventory levels are maintained
Inventory is classified into A, B and C category with A being the highest quantity, lowest value.
Inventory is classified into A, B and C Category with A being the lowest quantity, highest value
Either b or c.
FIFO
LIFO
Weighted Average
EOQ
provide lowest value of closing stock and profit
provide highest value of closing stock and profit
provide highest value of closing stock but lowest value of profit
provide highest value of profit but lowest value of closing stock
provide lowest value of closing stock and profit
provide highest value of closing stock and profit
provide highest value of closing stock but lowest value of profit
provide highest value of profit but lowest value of closing stock
5600 units
800 units
1400 units
200 units
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The Correct Answer for the given question is Option D) there is a clearly identifiable parent.
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Q.28. Calculate EOQ (approx.) from the following details:
Annual Consumption: 24000 units
Ordering cost: Rs. 10 per order
Test Paper 565
Purchase price: Rs. 100 per unit
Carrying cost: 5%
310
400
290
300
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The Correct Answer for the given question is Option D) there is a clearly identifiable parent.
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Q.29. Calculate the value of closing stock from the following according to FIFO method:
1st January, 2014: Opening balance: 50 units @ Rs. 4
5th January, 2014: 100 units @ Rs. 5
12th January, 2014: 200 units @ Rs. 4.50
Issues:
2nd January, 2014: 30 units
18th January, 2014: 150 units
Rs. 765
Rs. 805
Rs. 786
Rs. 700
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The Correct Answer for the given question is Option D) there is a clearly identifiable parent.
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Q.30. Calculate the value of closing stock from the following according to LIFO method:
1st January, 2014: Opening balance: 50 units @ Rs. 4
5th January, 2014: 100 units @ Rs. 5
12th January, 2014: 200 units @ Rs. 4.50
Issues:
2nd January, 2014: 30 units
18th January, 2014: 150 units
Rs. 765
Rs. 805
Rs. 786
Rs. 700
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The Correct Answer for the given question is Option D) there is a clearly identifiable parent.
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Q.31. Calculate the value of closing stock from the following according to Weighted Average method:
1st January, 2014: Opening balance: 50 units @ Rs. 4
Receipts:
5th January, 2014: 100 units @ Rs. 5
12th January, 2014: 200 units @ Rs. 4.50
Issues:
EP-CMA
2nd January, 2014: 30 units
18th January, 2014: 150 units
Rs. 765
Rs. 805
Rs. 786
Rs. 700
Charged to the product cost
Charged to the profit & loss account
charged partly to the product and partly profit & loss account
not charged at all.
1000 units
6000 units
3000 units
7000 units
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The Correct Answer for the given question is Option D) there is a clearly identifiable parent.
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Q.34. From the following information, calculate the extra cost of material by following EOQ:
Annual consumption: = 45000 units
Ordering cost per order: = Rs. 10
Carrying cost per unit per annum: = Rs. 10
Purchase price per unit = Rs. 50
Re-order quantity at present = 45000 units
No saving
Rs. 2,00,000
Rs. 2,22,010
Rs. 2,990
Time taken by workers to travel the distance between the main gate of factory and place of their work
Time lost between the finish of one job and starting of next job
Time spent to meet their personal needs like taking lunch, tea etc.
Test Paper 567
(d) Machine break downs
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The Correct Answer for the given question is Option D) there is a clearly identifiable parent.
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Q.36. If overtime is resorted to at the desire of the customer, then the overtime premium:
should be charged to costing profit and loss account;
should not be charged at all
should be charged to the job directly
should be charged to the highest profit making department
Turnover generated by labour
Rate of change in composition of labour force during a specified period
Either of the above
Both of the above
Dissatisfaction with Job
Lack of training facilities
Low wages and allowances
Disability, making a worker unfit for work
Preventive Costs only
Replacement costs only
Both of the above
Machine costs
Q.40. Calculate workers left and discharged from the following:
Labour turnover rates are 20%, 10% and 6% respectively under Flux method, Replacement method and Separation method. No. of workers replaced during the quarter is 80.
112
80
48
64
Q.41. Calculate workers recruited and joined from the following:
Labour turnover rates are 20%, 10% and 6% respectively under Flux method, Replacement method and Separation method. No. of workers replaced during the quarter is 80.
112
80
EP-CMA
48
64
Q.42. Calculate the labour turnover rate according to replacement method from the following:
No. of workers on the payroll:
At the beginning of the month: 500
At the end of the month: 600
During the month, 5 workers left, 20 workers were discharged and 75 workers were recruited. Of these, 10 workers were recruited in the vacancies of those leaving and while the rest were engaged for an expansion scheme.
4.55%
1.82%
6%
3%
Q.43. Calculate the labour turnover rate according to Separation method from the following:
No. of workers on the payroll:
At the beginning of the month: 500
At the end of the month: 600
During the month, 5 workers left, 20 workers were discharged and 75 workers were recruited. Of these, 10 workers were recruited in the vacancies of those leaving and while the rest were engaged for an expansion scheme.
4.55%
1.82%
6%
3%
Q.44. A worker is allowed 60 hours to complete the job on a guaranteed wage of Rs. 10 per hour. Under the Rowan Plan, he gets an hourly wage of Rs. 12 per hour. For the same saving in time, how much he will get under the Halsey Plan?
Rs. 720
Rs. 540
Rs. 600
Rs. 900
Q.45. Overhead refers to:
Direct or Prime Cost
All Indirect costs
only Factory indirect costs
Test Paper 569
(d) Only indirect expenses
Q.46. Allotment of whole item of cost to a cost centre or cost unit is known as:
Cost Apportionment
Cost Allocation
Cost Absorption
Machine hour rate
Q. 47. Which of the following is not a method of cost absorption?
Percentage of direct material cost
Machine hour rate
Labour hour rate
Repeated distribution method
Only Service departments
Only Production departments
Both Production and service departments
None of the production and service departments
Floor Area
Value of Machines
No. of Workers
No. of Machines
Q. 50. Blanket overhead rate is:
One single overhead absorption rate for the whole factory
Rate which is blank or nil rate
rate in which multiple overhead rates are calculated for each production department, service department etc.
Always a machine hour rate
Q.51. AT Co makes a single product and is preparing its material usage budget for next year. Each unit of product requires 2kg of material, and 5,000 units of product are to be produced next year.
Opening inventory of material is budgeted to be 800 kg and AT co budgets to increase material inventory at the end of next year by 20%
The material usage budget for next year is
(a) 8,000 Kg
EP-CMA
((b) 9,840 kg
((c) 10,000 Kg
(d) 10,160 Kg
Q.52. During a period 17, 500 labour hours were worked at a standard cost of Rs 6.50 per hour. The labour efficiency variance was Rs 7,800 favourable.
How many standard hours were produced?
1,200
16,300
17,500
18,700
Q.53. Which of the following is not a reason for an idle time variance?
Wage rate increase
Machine breakdown
Illness or injury to worker
Non- availability of material
Q.54. During September, 300 labour hours were worked for a total cost of Rs 4800. The variable overhead expenditure variance was Rs 600 (A). Overheads are assumed to be related to direct labour hours of active working.
What was the standard cost per labour hour?
Rs 14
Rs 16.50
Rs 17.50
Rs 18
Q.55. Which of the following would explain an adverse variable production overhead efficiency variance?
Employees were of a lower skill level than specified in the standard
Unexpected idle time resulted from a series of machine breakdown
Poor Quality material was difficult to process
(1), (2) and (3)
(1) and (2)
(2) and (3)
(1) and (3)
Q.56. Budgeted sales of X for March are 18000 units. At the end of the production process for X, 10% of production units are scrapped as defective. Opening inventories of X for March are budgeted to be 15000 units and closing inventories will be 11,400 units. All inventories of finished goods must have successfully passed the quality control check. The production budget for X for March, in units is:
Test Paper 571
12,960
14,400
15,840
16,000
Q.57. CG Co manufactures a single product T. Budgeted production output of product T during June is 200 units. Each unit of product T requires 6 labour hours for completion and CG Co anticipates 20 per cent idle time. Labour is paid at a rate of Rs7 per hour. The direct labour cost budget for March is
Rs 6,720
8,400
10,080
10,500
Q.58. A Local Authority is preparing cash Budget for its refuse disposal department. Which of the following items would not be included in the cash budget?
Capital cost of a new collection vehicle
Depreciation of the machinery
Operatives wages
Fuel for the collection Vehicles
Q.59. BDL Ltd. is currently preparing its cash budget for the year to 31 March 2014. An extract from its sales budget for the same year shows the following sales values.
March
April
May
June
Rs
60,000
70,000
55,000
65,000
40% of its sales are expected to be for cash. Of its credit sales, 70% are expected to pay in month after sale and take a 2% discount. 27% are expected to pay in the second month after the sale, and the remaining 3% are expected to be bad debts. The value of sales budget to be shown in the cash budget for May 2013 is
Rs 60,532
Rs 61,120
Rs 66,532
Rs 86,620
Q.60. The actual output of 162,500 units and actual fixed costs of Rs. 87000 were exactly as budgeted.
However, the actual expenditure of Rs 300,000 was Rs. 18,000 over budget.
What was the budget variable cost per unit?
(a) Rs 1.20
EP-CMA
Rs 1.31
Rs1.42
Rs 1.50
Q.61. CA Co manufactures a single product and has drawn up the following flexed budget for the year.
60% 70% 80%
Rs Rs Rs
Direct materials 120,000 140,000 160,000
Direct labour 90,000 105,000 120,000
Production overheads 54,000 58,000 62,000
Other overheads 40,000 40,000 40,000
Total Cost
304,000 343,000 382,000
What would be the total cost in a budget that is prepared at the 77% level of activity?
Rs 330,300
Rs 370,300
Rs 373,300
Rs 377,300
Q.62. A ltd is a manufacturing company that has no production resource limitations for the foreseeable future. The Managing Director has asked the company mangers to coordinate the preparation of their budgets for the next financial year. In what order should the following budgets be prepared?
Sales budget
Cash budget
Production budget
Purchase budget
Finished goods inventory budget
(2), (3), (4), (5), (1)
(1), (5), (3), (4), (2)
(1), (4), (5), (3), (2)
(4), (5), (3), (1), (2)
Q.63. S produces and sells one product, P, for which the data are as follows:
Selling price Rs 28
Variable cost Rs 16
Fixed cost Rs 4
The fixed costs are based on a budgeted production and sales level of 25,000 units for the next period.
Due to market changes both the selling price and the variable cost are expected to increase above the budgeted level in the next period.
Test Paper 573
If the selling price and variable cost per unit increase by 10% and 8% respectively, by how much must sales volume change, compared with the original budgeted level, in order to achieve the original budgeted profit for the period?
10.1% decrease
11.2% decrease
13.3% decrease
16.0% decrease
Q.64. In process costing, a joint product is
a product which is later divided into many parts
a product which is produced simultaneously with other products and is of similar value to at least one of the other products.
A product which is produced simultaneously with other products but which is of a greater value than any of the other products.
a product produced jointly with another organization
Q.65. Process B had no opening inventory. 13,500 units of raw material were transferred in at Rs 4.50 per unit. Additional material at Rs1.25per unit was added in process. Labour and overheads were Rs 6.25 per completed unit and Rs 2.50 per unit incomplete.
If 11,750completed units were transferred out, what was the closing inventory in Process B?
Rs. 6562.50
Rs. 12,250.00
Rs. 14,437.50
Rs. 25,375.00
Q.66. A process costing system for J Co used an input of 3,500Kg of materials at Rs20 per Kg and labour hours of 2,750 at Rs25 per hour. Normal loss is 20% and losses can be sold at a scrap value of Rs5per Kg. Output was 2,950 Kg. What is the value of the output?
Rs 142,485
Rs 146,183
Rs 149,746
Rs 152,986
Q.67. In process costing, if an abnormal loss arises, the process account is generally
Debited with the scrap value of the abnormal loss units
Debited with the full production cost of the abnormal loss units
Credited with the scrap value of the abnormal loss units
Credited with the full production cost of the abnormal loss units
EP-CMA
Q.68. Which of the following statements is/are correct?
A materials requisition note is used to record the issue of direct material to a specific job.
A typical job cost will contain actual costs for material, labour and production overheads, and non – production overheads are often added as a percentage of total production cost
The job costing method can be applied in costing batches
(1) only
(1) and (2) only
(1) and (3) only
(2) and (3) only
Q.69. A job is budgeted to require 3,300 productive hours after incurring 25% idle time. If the total labour cost budgeted for the job is Rs36,300. What is the labour cost per hour( to the nearest cent)?
Rs 8.25
Rs 8.80
Rs 11.00
Rs 14.67
Q.70. A company calculates the prices of jobs by adding overheads to the prime cost and adding 30% to total costs as a profit margin. Job number Y256 was sold for Rs1690 and incurred overheads of Rs 694. What was the prime cost of the job?
Rs 489
Rs 606
Rs 996
Rs 1300
Q.71. State which of the following are the characteristics of service costing.
High levels of indirect costs as a proportion of total costs
Use of composite cost units
Use of equivalent units
(1) only
(1) and (2) only
(2) only
(2) and (3) only
Q.72. Which of the following organisations should not be advised to use service costing?
Distribution service
Hospital
Maintenance division of a manufacturing company
Test Paper 575
(d) A light engineering company
Q.73. Calculate the most appropriate unit cost for a distribution division of a multinational company using the following information.
Miles travelled 636,500
Tonnes carried 2,479
Number of drivers 20
Hours worked by drivers 35,520
Tonnes miles carried 375,200
Cost incurred 562,800
(a) Rs .88
(b) Rs 1.50
(c) Rs 15.84
(d) Rs28, 140
Q.74. The following information is available for the W hotel for the latest thirty day period.
Number of rooms available per night 40
Percentage occupancy achieved 65%
Room servicing cost incurred Rs. 3900
The room servicing cost per occupied room-night last period, to the nearest Rs, was:
Rs 3.25
Rs 5.00
Rs 97.50
Rs 150.00
Q.75. A company makes a single product and incurs fixed costs of Rs. 30,000 per annum. Variable cost per unit is Rs. 5 and each unit sells for Rs. 15. Annual sales demand is 7,000 units. The breakeven point is:
2,000 units
3,000 units
4,000 units
6,000 units
Q.76. A company manufactures a single product for which cost and selling price data are as follows:
Selling price per unit – Rs. 12
Variable cost per unit – Rs. 8
Fixed cost for a period – Rs. 98,000
Budgeted sales for a period – 30,000 units
The margin of safety, expressed as a percentage of budgeted sales,is:
(a) 20%
EP-CMA
25%
73%
125%
Information for Q.77 to Q.79:
Information concerning A Ltd.’s single product is as follows:
Selling price – Rs. 6 per unit
Variable production cost – RS. 1.20 per unit
Variable selling cost – Rs. 0.40 per unit
Fixed production cost – Rs. 4 per unit
Fixed selling cost – Rs. 0.80 per unit.
Budgeted production and sales for the year are 10,000 units.
Q.77. What is the company’s breakeven point:
(a) 8,000 units
b) 8,333 units
10,000 units
10,909 units
Q.78. How many units must be sold if company wants to achieve a profit of Rs. 11,000 for the year?
2,500 units
9,833 units
10,625 units
13,409 units
Q.79. It is now expected that the variable production cost per unit and the selling price per unit will each increase by 10%, and fixed production cost will rise by 25%. What will be the new break even point?
8,788 units
11,600 units
11,885 units
12,397 units
Q.80. A company’s break even point is 6,000 units per annum. The selling price is Rs. 90 per unit and the variable cost is Rs. 40 per unit. What are the company’s annual fixed costs?
Rs. 120
Rs. 2,40,000
Rs. 3,00,000
Rs. 5,40,000
Test Paper 577
Q.81. Capital gearing ratio is ___________.
Market test ratio
Long-term solvency ratio
Liquid ratio
urnover ratio
Q.82. After inviting tenders for supply of raw materials, two quotations are received as follows—
Supplier P Rs. 2.20 per unit, Supplier Q Rs. 2.10 per unit plus Rs. 2,000 fixed charges irrespective of the units ordered. The order quantity for which the purchase price per unit will be the same—
22,000 units
20,000 units
21,000 units
None of the above.
Q.83. In case of joint products, the main objective of accounting of the cost is to apportion the joint costs incurred up to the split off point. For cost apportionment one company has chosen Physical Quantity Method. Three joint products ‘A’, ‘B’ and ‘C’ are produced in the same process. Up to the point of split off the total production of A, B and C is 60,000 kg, out of which ‘A’ produces 30,000 kg and joint costs are Rs. 3,60,000. Joint costs allocated to product A is
Rs. 1,20,000
Rs. 60,000
Rs. 1,80,000
None of the these
Q.84. A transport company is running five buses between two towns, which are 50 kms apart. Seating capacity of each bus is 50 passengers. Actually passengers carried by each bus were 75% of seating capacity. All buses ran on all days of the month. Each bus made one round trip per day.
Passenger kms are:
2,81,250
1,87,500
5,62,500
None of the above
Q.85. The cost per unit of a product manufactured in a factory amounts to Rs. 160 (75% variable) when the production is 10,000 units. When production increases by 25%, the cost of production will be Rs. per unit.
Rs. 145
Rs. 150
Rs. 152
Rs. 140
EP-CMA
Q.86. In ‘make or buy’ decision, it is profitable to buy from outside only when the supplier’s price is below the firm’s own ______________.
Fixed Cost
Variable Cost
Total Cost
Prime Cost
Q.87. A budget which is prepared in a manner so as to give the budgeted cost for any level of activity is known as:
Master budget
Zero base budget ((c) Functional budget
(d) Flexible budget
Current ratio
Quick ratio ((c) Liquid ratio
(d) Debt-equity ratio
Functional Budget
Master Budget
Long Period Budget
Flexible Budget
Q.90. _____________ is a detailed budget of cash receipts and cash expenditure incorporating both
revenue and capital items.
Cash Budget
Capital Expenditure Budget
Sales Budget
Overhead Budget
Firm
Company
Individual
Society
Test Paper 579
Q.92. For the financial year ended as on March 31, 2013 the figures extracted from the balance sheet of
Xerox Limited as under:
Opening Stock Rs. 29,000; Purchases Rs. 2,42,000; Sales Rs. 3,20,000; Gross Profit 25% of Sales. Stock Turnover Ratio will be :-
8 times
6 times
9 times
10 times
Q.93. If credit sales for the year is Rs. 5,40,000 and Debtors at the end of year is Rs. 90,000 the Average Collection Period will be
30 days
61 days
90 days
120 days
Q.94. The summarized balance sheet of Rakesh udyog Limited shows the balances of previous and current year of provision for taxation Rs. 50,000 and Rs. 65,000. If taxed paid during the current year amounted to Rs. 70,000 then amount charge from Profit and Loss Account will be:
Rs. 55,000
Rs. 85,000
Rs. 45,000
Rs. 1,85,000
Q.95. The summarized balance sheet of Autolight Limited shows the balances of previous and current year of retained earnings Rs. 25,000 and Rs. 35,000. If dividend paid during the current year amounted to Rs.
5,000 then profit earned during the year will be:
Rs. 5,000
Rs. 55,000
Rs. 15,000
Rs. 65,000
Q.96. Following information is available of XYZ Limited for quarter ended June, 2013
Fixed cost
Rs. 5,00,000
Variable cost
Rs. 10 per unit
Selling price
Rs. 15 per unit
Output level
1,50,000 units
What will be amount of profit earned during the quarter using the marginal costing technique?
(a) Rs. 2,50,000
EP-CMA
Rs. 10,00,000
Rs. 5,00,000
Rs. 17,50,000
Q.97. The P/v ratio of a company is 50% and margin of safety is 40%. If present sales is Rs. 30,00,000 then Break Even Point in Rs. will be
Rs. 9,00,000
Rs. 18,00,000
Rs. 5,00,000
None of the above
Q.98. Following information is available of PQR for year ended March, 2013: 4,000 units in process, 3,800 units output, 10% of input is normal wastage, Rs. 2.50 per unit is scrap value and Rs. 46,000 incurred towards total process cost then amount on account of abnormal gain to be transferred to Costing P&L will be:-
Rs. 2,500
Rs. 2,000
Rs. 4,000
Rs. 3,500
Q.99. In element-wise classification of overheads, which one of the following is not included —
Fixed overheads
Indirect labour
Indirect materials
Indirect expenditure.
Q.100. When the sales increase from Rs. 40,000 to Rs. 60,000 and profit increases by Rs. 5,000, the P/V ratio is —
20%
30%
25%
40%.
MBA,BBA.
I am Smirti Bam, an enthusiastic edu blogger with a passion for sharing insights into the dynamic world of business and management through this website.
I hold a MBA degree from Presidential Business School, Kathmandu, and a BBA degree with a specialization in Finance from Apex College,
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