{"id":5207,"date":"2024-02-20T10:14:15","date_gmt":"2024-02-20T04:44:15","guid":{"rendered":"https:\/\/gstguntur.com\/?p=5207"},"modified":"2024-02-21T17:34:08","modified_gmt":"2024-02-21T12:04:08","slug":"overview-of-cost-corporate-and-management-accounting-mcq","status":"publish","type":"post","link":"https:\/\/gstguntur.com\/overview-of-cost-corporate-and-management-accounting-mcq\/","title":{"rendered":"Overview of Cost \u2013 Corporate and Management Accounting MCQ"},"content":{"rendered":"

Students should practice Overview of Cost \u2013 Corporate and Management Accounting CS Executive MCQ<\/a> Questions with Answers based on the latest syllabus.<\/p>\n

Overview of Cost \u2013 Corporate and Management Accounting MCQ<\/h2>\n

Question 1.
\nDec 2014: The term used for process of ascertaining the cost\u2019 is known as
\n(A) Cost
\n(B) Costing
\n(C) Cost accounting
\n(D) Cost accountancy
\nAnswer:
\n(B) Costing<\/p>\n

Question 2.
\nDec 2014: Which element of the total cost is common in prime cost and conversion cost
\n(A) Variable overheads
\n(B) Fixed overheads
\n(C) Direct materials
\n(D) Direct labour
\nAnswer:
\n(D) Direct labour<\/p>\n

Question 3.
\nDec 2014: The cost that increases as the volume of activity decreases within the relevant range, is known as
\n(A) Average cost per unit
\n(B) Average variable cost per unit
\n(C) Total fixed cost
\n(D) Total variable cost
\nAnswer:
\n(A) Average cost per unit<\/p>\n

Question 4.
\nDec 2014: Which of the following is generally used as cost unit of brickworks
\n(A) 1,000 bricks
\n(B) 100 bricks
\n(C) 10 bricks
\n(D) 1 brick
\nAnswer:
\n(A) 1,000 bricks<\/p>\n

Question 5.
\nDec 2014: Relevant costs are
\n(A) Future costs
\n(B) Standard costs
\n(C) Controllable costs
\n(D) Historical costs
\nAnswer:
\n(A) Future costs<\/p>\n

Question 6.
\nDec 2014: Which of the following is not considered as a function of management accounting?
\n(A) Financial planning
\n(B) Decision making
\n(C) Reporting
\n(D) Cost computation
\nAnswer:
\n(B) Decision making<\/p>\n

Question 7.
\nDec 2014: The cost of selecting one course of action and forgoing the other is known as
\n(A) Sunk cost
\n(B) Differential cost
\n(C) Opportunity cost
\n(D) Joint cost
\nAnswer:
\n(C) Opportunity cost<\/p>\n

Question 8.
\nDec 2014: Expenditure on labour and materials that cannot be economically identified with a specific saleable cost unit is known as:
\n(A) Prime cost
\n(B) Overheads
\n(C) Direct cost
\n(D) Abnormal loss
\nAnswer:
\n(B) Overheads<\/p>\n

Question 9.
\nDec 2014: For a manufacturing company, which of the following is an example of period cost rather than a product cost
\n(A) Depreciation on factory equipment
\n(B) Commission to the salesman
\n(C) Wages of machine operator
\n(D) Insurance on factory equipment
\nAnswer:
\n(D) Insurance on factory equipment<\/p>\n

Question 10.
\nDec 2014: Which of the following is known as full costing
\n(A) Variable costing
\n(B) Differential costing
\n(C) Marginal costing
\n(D) Absorption costing
\nAnswer:
\n(D) Absorption costing<\/p>\n

Question 11.
\nDec 2014: Which of the following is not true? Fixed costs remain fixed
\n(A) Over a short period
\n(B) Over a long period and within a relevant range
\n(C) Over a short period and within a relevant range
\n(D) Over a long period
\nAnswer:
\n(D) Over a long period<\/p>\n

Question 12.
\nDec 2014: According to Section 2(13) of the Companies Act, 2013, \u2018books of account\u2019 does not require maintenance of which of the following records
\n(A) All sums of money received and expended by a company and matters in relation to which the receipts and expenditure take place
\n(B) All sales and purchases of goods and services by the company
\n(C) The assets and liabilities of the company
\n(D) Cash flow statement
\nAnswer:
\n(D) Cash flow statement<\/p>\n

Question 13.
\nJune 2015: Which of the following is generally used as a cost unit in the cement industry
\n(A) Per tonne
\n(B) Per kilolitre
\n(C) Per kilogram
\n(D) Per gallon
\nAnswer:
\n(A) Per tonne<\/p>\n

Question 14.
\nJune 2015: Which of the following is not an objective of management accounting
\n(A) Formulation of plans and policy
\n(B) Assisting in decision making
\n(C) Preparation of financial statements
\n(D) Interpretation of financial documents
\nAnswer:
\n(C) Preparation of financial statements<\/p>\n

Question 15.
\nJune 2015: The establishment of budgets, standard costs and actual costs of operations, processes, activities or products and the analysis of variances, profitability or the social use of funds is known as
\n(A) Costing
\n(B) Cost Accounting
\n(C) Cost Accountancy
\n(D) Financial Accounting
\nAnswer:
\n(B) Cost Accounting<\/p>\n

Question 16.
\nJune 2015: Costs that are constant for a given level of output and then increase by a fixed amount at a higher level of output are called___
\n(A) Step costs
\n(B) Differential costs
\n(C) Committed costs
\n(D) Opportunity costs
\nAnswer:
\n(A) Step costs<\/p>\n

Question 17.
\nJune 2015: Interest on internally generated funds is an example of
\n(A) Differential cost
\n(B) Joint cost
\n(C) Common cost
\n(D) Imputed cost
\nAnswer:
\n(D) Imputed cost<\/p>\n

Question 18.
\nJune 2015: The cost unit applicable to the bicycle industry is
\n(A) Per part of a bicycle
\n(B) Per bicycle
\n(C) Per thousand bicycles
\n(D) Per day
\nAnswer:
\n(B) Per bicycle<\/p>\n

Question 19.
\nJune 2015: Sunk costs are____
\n(A) Opportunity costs
\n(B) Costs to be incurred in future
\n(C) Not relevant for decision making
\n(D) Controllable costs
\nAnswer:
\n(C) Not relevant for decision making<\/p>\n

Question 20.
\nJune 2015: Fixed cost is a cost____
\n(A) Which remains fixed for each unit ‘ of output
\n(B) Which remains fixed in total during a given period despite changes in output
\n(C) Which is partly fixed and partly variable in relation to the output
\n(D) Which changes in total in proportion to the changes in output
\nAnswer:
\n(B) Which remains fixed in total during a given period despite changes in output<\/p>\n

Question 21.
\nJune 2015: Which of the following is the social purpose of cost audit –
\n(A) Detection and correction of ab-normal losses
\n(B) Detection of errors and frauds
\n(C) Determination of inventory valuation
\n(D) Pinpointing areas of inefficiency and mismanagement for the benefit of shareholders and consumers
\nAnswer:
\n(D) Pinpointing areas of inefficiency and mismanagement for the benefit of shareholders and consumers<\/p>\n

Question 22.
\nJune 2015: Rent, rates and insurance of factory and office are examples of –
\n(A) Direct expenses
\n(B) Indirect expenses
\n(C) Notional expenses
\n(D) Miscellaneous expenses
\nAnswer:
\n(B) Indirect expenses<\/p>\n

Question 23.
\nDec 2015: Management accounting is basically concerned with
\n(A) The problem of choice
\n(B) The Causative relationship
\n(C) Recording of transaction
\n(D) Both (A) and (B) above
\nAnswer:
\n(D) Both (A) and (B) above<\/p>\n

Question 24.
\nDec 2015: Cost accounting is
\n(A) Nothing more than a detailed analysis of expenditure
\n(B) An instrument of management control
\n(C) Useful only in such organization which has profit as the aim
\n(D) Not needed if prices are beyond the control of the firm.
\nAnswer:
\n(B) An instrument of management control<\/p>\n

Question 25.
\nDec 2015: Conversion cost is the summation of
\n(A) Direct material and direct wages
\n(B) Direct wages and office over-heads
\n(C) Direct wages, direct charges and works overheads
\n(D) None of the above
\nAnswer:
\n(C) Direct wages, direct charges and works overheads<\/p>\n

Question 26.
\nDec 2015: A cost centre that is engaged in production activity by conversion of raw material into a finished product is called______
\n(A) Production cost centre
\n(B) Impersonal cost centre
\n(C) Process cost centre
\n(D) Production unit
\nAnswer:
\n(A) Production cost centre<\/p>\n

Question 27.
\nDec 2015: A business unit is known to be a profit centre
\n(A) If its operations or departments are not directly involved in rev
\nRenee generating activities, but instead, focus on elements of cost control
\n(B) If its management is evaluated not only on revenues and expenses but also on asset investment
\n(C) If its management is compensated based on the level of profitability
\n(D) If its management is held accountable for both revenues and expenses and has the authority to make a decision regarding its products, markets and source of supply
\nAnswer:
\n(D) If its management is held accountable for both revenues and expenses and has the authority to make a decision regarding its products, markets and source of supply<\/p>\n

Question 28.
\nDec 2015:
\nStatement-I:
\nThe activities or operations of every cost centre should be homogeneous so as to ensure a uniform basis of charging expenses within the centre.
\nStatement-II
\nThe activities or operation of each cost centre must be well defined and clearly identifiable.
\nSelect the correct answer from the following:
\n(A) Both statements are correct
\n(B) Both statements are incorrect
\n(C) Statement-I is correct, but Statement-II is incorrect
\n(D) Statement-I is incorrect, but Statement-II is correct
\nAnswer:
\n(A) Both statements are correct<\/p>\n

Question 29.
\nDec 2015: Match the following:<\/p>\n\n\n\n\n\n\n\n
List-I<\/strong><\/td>\nList-II<\/strong><\/td>\n<\/tr>\n
P. Cost control purposes<\/td>\n1. _____ is a predetermined cost<\/td>\n<\/tr>\n
Q. Standard cost<\/td>\n2. Responsibility accounting fixes responsibility for _____<\/td>\n<\/tr>\n
R. Integrates<\/td>\n3. Cost accounting guides policies____future<\/td>\n<\/tr>\n
S. Production<\/td>\n4. Budgeting system___ key managerial functions<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Select the correct answer from the options given below:
\n\"Overview
\nAnswer:
\n(B)<\/p>\n

Question 30.
\nJune 2016: A process in which management is looking outward to examine how others achieve their performance levels and to understand the process they use, is called___
\n(A) Balanced scorecard
\n(B) Target costing
\n(C) Benchmarking process
\n(D) Performance analysis
\nAnswer:
\n(C) Benchmarking process<\/p>\n

Question 31.
\nJune 2016: Match the following industry\/product with appropriate cost unit:<\/p>\n\n\n\n\n\n\n\n
Industry\/Product<\/strong><\/td>\nCost unit<\/strong><\/td>\n<\/tr>\n
(i) Toy Industry<\/td>\n(a) Per batch<\/td>\n<\/tr>\n
(ii) Steel Industry<\/td>\n(b) Tonne-kilometre<\/td>\n<\/tr>\n
(iii) Chemical<\/td>\n(c) Tonne<\/td>\n<\/tr>\n
(iv) Transport<\/td>\n(d) Gallon<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Select the correct answer using the codes given below
\n\"Overview
\nAnswer:
\n(A)<\/p>\n

Question 32.
\nJune 2016: Which one of the following statements is false___
\n(A) Management accountant uses cost accounting tools and techniques for planning and decision making
\n(B) Management accounting is mostly historical in its approach and it projects the past
\n(C) Cost accounting system can be installed without a management accounting
\n(D) Management accounting focuses on wealth maximization
\nAnswer:
\n(B) Management accounting is mostly historical in its approach and it projects the past<\/p>\n

Question 33.
\nJune 2016: Identify the cost which is not relevant or useful for decision-making__
\n(A) Shut down the cost
\n(B) Marginal cost
\n(C) Imputed cost and replacement cost
\n(D) Sunk cost
\nAnswer:
\n(D) Sunk cost<\/p>\n

Question 34.
\nJune 2016: Cost Accounting Standard is related to bringing uniformity and consistency in the principles and methods of determining the selling and distribution overheads with reasonable accuracy.
\n(A) 10
\n(B) 12
\n(C) 15
\n(D) 4
\nAnswer:
\n(C) 15<\/p>\n

Question 35.
\nJune 2016: Section of the Companies Act, 2013 gives the cost auditor the same power as the financial auditor has under the section of the Companies Act, 2013.
\n(A) 148, 143
\n(B) 143, 148
\n(C) 147, 148
\n(D) 143, 144
\nAnswer:
\n(A) 148, 143<\/p>\n

Question 36.
\nJune 2016: Those fixed costs which continue to be incurred even when there is no production are called
\n(A) Period costs
\n(B) Discretionary costs
\n(C) Committed costs
\n(D) Output costs
\nAnswer:
\n(C) Committed costs<\/p>\n

Question 37.
\nJune 2016: A direct cost is a cost that can be classified on the basis of –
\n(A) Behaviour
\n(B) Traceability
\n(C) Controllability
\n(D) Relevance
\nAnswer:
\n(B) Traceability<\/p>\n

Question 38.
\nJune 2016: Management accounting does not include the function of
\n(A) Planning and control
\n(B) Product costing
\n(C) Preparation of financial statements
\n(D) Decision-making
\nAnswer:
\n(D) Decision-making<\/p>\n

Question 39.
\nDec 2016: Which of the following is\/are a tool(s) and technique(s) of management accounting?
\n(A) Ratio analysis
\n(B) Linear programming
\n(C) Trend analysis
\n(D) All of the above
\nAnswer:
\n(D) All of the above<\/p>\n

Question 40.
\nDec 2016: Match the following:<\/p>\n\n\n\n\n\n\n\n
Statements<\/strong><\/td>\nObjects<\/strong><\/td>\n<\/tr>\n
P. Collection of cost information and recording them under suitable heads<\/td>\n1. Budgeting<\/td>\n<\/tr>\n
Q. Monitoring idle time, worker\u2019s efficiency and labour turnover<\/td>\n2. Cost Reduction<\/td>\n<\/tr>\n
R. Estimation (both quantities and value) of the cost before the start of the activity<\/td>\n3. Ascertainment<\/td>\n<\/tr>\n
S. Procedures and techniques used to bring down the estimated cost<\/td>\n4. Cost control<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Select the correct answer from the options given below:
\n\"Overview
\nAnswer:
\n(B)<\/p>\n

Question 41.
\nDec 2016: Statement – I
\nSunk cost is one that has already been incurred and cannot be avoided by decisions in the future.
\nStatement – II
\nFor decision making, it is required that such cost should be incurred.
\nSelect the correct answer from the options given below:
\n(A) Both statements are correct
\n(B) Both statements are incorrect
\n(C) Statement-I is incorrect, but Statement-H is correct
\n(D) Statement-I is correct, but Statement-II is incorrect
\nAnswer:
\n(D) Statement-I is correct, but Statement-II is incorrect<\/p>\n

Question 42.
\nDec 2016: The prime function of management accounting is to:
\n(A) Record business transactions
\n(B) Interpret financial data
\n(C) Assist the management in performing its functions effectively
\n(D) Assist tax authorities.
\nAnswer:
\n(C) Assist the management in performing its functions effectively<\/p>\n

Question 43.
\nDec 2016: Multiple costing is followed in___
\n(A) Biscuit factory
\n(B) Steel industry
\n(C) Brick making
\n(D) Cycle manufacturing
\nAnswer:
\n(D) Cycle manufacturing<\/p>\n

Question 44.
\nDec 2016: The ascertainment of costs after they have been incurred is called
\n(A) Marginal costing
\n(B) Historical costing
\n(C) Differential costing
\n(D) None of the above
\nAnswer:
\n(B) Historical costing<\/p>\n

Question 45.
\nDec 2016: A technique where standardized principles and methods of cost accounting are employed by a number of different companies is termed as
\n(A) Uniform costing
\n(B) Absorption costing
\n(C) Standard costing
\n(D) ABC costing
\nAnswer:
\n(A) Uniform costing<\/p>\n

Question 46.
\nDec 2016: A cost centre is
\n(A) A production or service location, function, activity or item of equipment whose costs may be attributed to cost units
\n(B) A centre for which an individual budget is drawn-up
\n(C) A centre where cost is classified on the basis of variability
\n(D) An amount of expenditure attributable to an activity
\nAnswer:
\n(A) A production or service location, function, activity or item of equipment whose costs may be attributed to cost units<\/p>\n

Question 47.
\nDec 2016: In the management information system (MIS), top-level management uses
\n(A) Operational information
\n(B) Tactical information
\n(C) Transactional information
\n(D) Strategic information
\nAnswer:
\n(D) Strategic information<\/p>\n

Question 48.
\nDec 2016: Which of the following is an irrelevant cost
\n(A) Sunk cost
\n(B) Replacement cost
\n(C) Opportunity cost
\n(D) All of the above
\nAnswer:
\n(A) Sunk cost<\/p>\n

Question 49.
\nDec 2016: Match the following:<\/p>\n\n\n\n\n\n\n\n
List -I<\/strong><\/td>\nList – II<\/strong><\/td>\n<\/tr>\n
(A) Advertising<\/td>\n(1) Operating costing<\/td>\n<\/tr>\n
(B) The Sugar company<\/td>\n(2) Job costing<\/td>\n<\/tr>\n
(C) Readymade<\/td>\n(3) Process costing garments<\/td>\n<\/tr>\n
(D) Transport<\/td>\n(4) Batch costing<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Select the correct answer from the options given below:
\n\"Overview
\nAnswer:
\n(A)<\/p>\n

Question 50.
\nDec 2014: In an inflationary situation, which system of inventory valuation shows higher profits
\n(A) LIFO
\n(B) FIFO
\n(C) HIFO
\n(D) Weighted average
\nAnswer:
\n(B) FIFO<\/p>\n

Question 51.
\nJune 2015: Which of the following method is based on the assumption that the costliest materials are issued first and inventory is valued at the lowest possible price___
\n(A) FIFO method
\n(B) UFO method
\n(C) Highest-in-first-out method
\n(D) Weighted average method
\nAnswer:
\n(C) Highest-in-first-out method<\/p>\n

Question 52.
\nJune 2015: Following information is available regarding a product-X:
\n1st January 2015:
\nOpening balance: 50 units @ \u20b9 4 Receipts:
\n5th January 2015: 100 units @ \u20b9 5
\n12th January, 2015:200 units @ \u20b9 5.50 Issues:
\n2nd January 2015: 30 units
\n18th January 2015: 170 units
\nThe value of closing stock according to the FIFO method is
\n(A) \u20b9 660
\n(B) \u20b9 770
\n(C) \u20b9 825
\n(D) \u20b9 860
\nHint:
\n\"Overview
\nAnswer:
\n(C) \u20b9 825<\/p>\n

Question 53.
\nJune 2015: In case of rising prices, the FIFO method will provide___
\n(A) Lowest value of closing stock and profit
\n(B) Highest value of closing stock and profit
\n(C) Highest value of the closing stock but the lowest value of profit
\n(D) Lowest value of the closing stock but highest value of profit
\nAnswer:
\n(B) Highest value of closing stock and profit<\/p>\n

Question 54.
\nDec 2015: FIFO method of valuing material issues is suitable in times of___
\n(A) Rising prices
\n(B) Falling prices
\n(C) Price fluctuation
\n(D) The Boom period
\nAnswer:
\n(B) Falling prices<\/p>\n

Question 55.
\nJune 2016: XYZ Ltd. had 4,000 units of inventory in hand on 1st March 2016, costing ? 4 per unit. Purchases and issues of material during the month were as follows:
\n\"Overview
\nThe cost of inventory as of 31st March 2016 under FIFO and weighted average cost method will be
\n(A) \u20b9 27,000 and \u20b9 24,500
\n(B) \u20b9 27,000 and \u20b9 23,625
\n(C) \u20b9 22,000 and \u20b9 23,625
\n(D) \u20b9 22,000 and \u20b9 24,498
\nHint:
\n\"Overview
\n\"Overview
\nOption (A) is correct (there is a difference of \u20b9 2 due to rounding of digits)
\nAnswer:
\n(A) \u20b9 27,000 and \u20b9 24,500<\/p>\n

Question 56.
\nJune 2016: In a situation of rising prices, profit and tax liability would be lower under method than under method of material issue pricing.
\n(A) FIFO; LIFO
\n(B) LIFO; FIFO
\n(C) LIFO; Average
\n(D) FIFO; Average
\nAnswer:
\n(B) LIFO; FIFO<\/p>\n

Question 57.
\nJune 2016: The technique of economic order quantity is losing significance since the development of
\n(A) Perpetual inventory
\n(B) Just-in-time
\n(C) First-in-first-out
\n(D) ABC analysis
\nAnswer:
\n(B) Just-in-time<\/p>\n

Question 58.
\nJune 2016: Which one of the following is the correct sequence of the purchase procedure of inventory___
\n(A) Indenting for material, issuing tenders, receiving quotations, and placing order
\n(B) Issuing tenders and receiving quotations, indenting for mate-rial, and placing order
\n(C) Placing order, issuing tenders and receiving quotations, and indenting for material
\n(D) Indenting for material and placing order
\nAnswer:
\n(A) Indenting for material, issuing tenders, receiving quotations, and placing order<\/p>\n

Question 59.
\nDec 2016: Amaze Ltd. had an opening inventory of 5,000 units costing \u20b9 5 per unit on 1st April 2016. Following receipts and issues took place in April 2016:
\n5th April 2016: Purchased 800 units @ \u20b9 8 per unit
\n12th April 2016: Purchased 200 units @ \u20b9 8 per unit
\n15th April 2016: Issued 3,000 units 25th April 2016: Purchased 1,000 units @ \u20b9 9 per unit
\nCost of inventory as of 30th April 2016 under weighted average basis will be____
\n(A) \u20b9 25,500
\n(B) \u20b9 27,000
\n(C) \u20b9 20,000
\n(D) \u20b9 23,500
\nHint:
\n\"Overview
\nAnswer:
\n(A) \u20b9 25,500<\/p>\n

Question 60.
\nDec 2014: Which of the following is not a method used for time booking__
\n(A) Daily timesheets
\n(B) Weekly timesheets
\n(C) Job cards
\n(D) Payroll
\nAnswer:
\n(D) Payroll<\/p>\n

Question 61.
\nJune 2015: Which of the following is not an objective of time-booking__
\n(A) Apportionment of overheads against jobs
\n(B) Preparation of payrolls
\n(C) Ascertaining idle time for the purpose of control
\n(D) Calculation of labour cost of jobs done
\nAnswer:
\n(A) Apportionment of overheads against jobs<\/p>\n

Question 62.
\nJune 2016: Which of the following is\/are not a purpose of time keeping___
\n(i) Ascertaining labour cost of a job\/product\/ activity
\n(ii) Evaluating labour performance by comparing the actual and budgeted time
\n(iii) Providing internal check against dummy workers.
\nSelect the correct answer from the options given below___
\n(A) (i) and (ii)
\n(B) (ii) and (iii)
\n(C) (i) and (iii)
\n(D) (ii) only
\nAnswer:
\n(A) (i) and (ii)<\/p>\n

Question 63.
\nJune 2016: Direct labour cost will include___
\n(A) All labour cost attributable to a production department
\n(B) Labour cost of production and production support services
\n(C) Cost of direct labour engaged in converting raw materials into manufactured articles
\n(D) Cost of labour recruited directly by the management and through contractors
\nAnswer:
\n(C) Cost of direct labour engaged in converting raw materials into manufactured articles<\/p>\n

Question 64.
\nDec 2016:
\nStatement -1
\nLow time wages do not necessarily mean low cost of production and high wages mean high cost of the product.
\nStatement – II
\nTime and motion study, which is a function of the engineering department, is useless for the determination of wages.
\nSelect the correct answer from the options given below:
\n(A) Both statements are correct
\n(B) Both statements are incorrect
\n(C) Statement-I is incorrect, but Statement-II is correct
\n(D) Statement-I is correct, but Statement-II is incorrect
\nAnswer:
\n(D) Statement-I is correct, but Statement-II is incorrect<\/p>\n

Question 65.
\nDec 2014: Rent, rates and taxes paid for the building are apportioned on the basis of____
\n(A) Floor area
\n(B) Capital value
\n(C) No. of employees
\n(D) Direct labour hours
\nAnswer:
\n(A) Floor area<\/p>\n

Question 66.
\nDec 2014: If the actual expenses fall short of the amount absorbed, it is known as___
\n(A) Under absorption
\n(B) Over absorption
\n(C) Allocation
\n(D) Apportionment
\nAnswer:
\n(B) Over absorption<\/p>\n

Question 67.
\nDec 2014: The budgeted fixed overheads amounted to \u20b9 84,000. The budgeted and actual production amounted to 20,000 units and 24,000 units respectively. This means that there will be an___
\n(A) Under-absorption of \u20b9 16,800
\n(B) Under-absorption of \u20b9 14,000
\n(C) Over-absorption of \u20b9 16,800
\n(D) Over-absorption of \u20b9 14,000
\nHint:
\nActual overheads based on budgeted rate:
\n\\(\\frac{84,000}{20,000}\\) \u00d7 24,000 = 1,00,800
\nSince budgeted overheads are less than actual overheads there is under absorption.
\n1,00,800 – 84,000 = 16,800.
\nAnswer:
\n(A) Under-absorption of \u20b9 16,800<\/p>\n

Question 68.
\nJune 2015: The following data is available for Akhil Ltd. for the year ended 31st March 2015:
\nAdministrative overheads: \u20b9 2,50,000
\nProduction overheads: \u20b9 2,74,200
\nFactory cost: \u20b9 3,42,800
\nWork-in- progress: \u20b9 74,000
\nMachine hour: 4,000 hours
\nThe absorption rate for production overheads is____
\n(A) \u20b9 68.55
\n(B) \u20b9 216.75
\n(C) \u20b9 235.25
\n(D) \u20b9 198.25
\nHint:
\nAbsorption Rate = \\(\\frac{\\text { Production overheads }}{\\text { Machine hours }}\\)
\n\\(\\frac{75,000}{15,000}\\) = 5 per unit
\nOverhead absorbed = 20,000 units \u00d7 5 = 1,00,000. If it assumed that actual overheads are same to that of budgeted figure then 1,00,000 – 75,000 = 25,000. Since absorbed overhead are more than actual overhead this is case of over absorption.
\nAnswer:
\n(A) \u20b9 68.55<\/p>\n

Question 69.
\nJune 2015: The budgeted fixed overheads amounted to \u20b9 75,000. The budgeted & actual production amounted to 15,000 units & 20,000 units respectively. This means that there will be an___
\n(A) Under-absorption of \u20b9 25,000
\n(B) Under-absorption of \u20b9 18,750
\n(C) Over-absorption of \u20b9 25,000
\n(D) Over-absorption of \u20b9 18,750
\nAnswer:
\n(C) Over-absorption of \u20b9 25,000<\/p>\n

Question 70.
\nJune 2015: The following data relates to two activity levels of production:<\/p>\n\n\n\n\n\n
\u00a0<\/strong><\/td>\nLevel-I<\/strong><\/td>\nLevel-II<\/strong><\/td>\n<\/tr>\n
No. of units<\/td>\n4,000<\/td>\n5,500<\/td>\n<\/tr>\n
Overheads (\u20b9)<\/td>\n2,80,000<\/td>\n3,50,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Variable cost per unit would be____
\n(A) \u20b9 46.67
\n(B) \u20b9 133.33
\n(C) \u20b9 70
\n(D) \u20b9 64
\nHint:
\nVariable Overhead Rate = \\(\\frac{\\text { Change in Overheads }}{\\text { Change in unit }}\\) = 46.67 per unit
\nAnswer:
\n(A) \u20b9 46.67<\/p>\n

Question 71.
\nJune 2015: A product \u201cwhose direct material costs and direct labour costs are \u20b9 200 and \u20b9 100 would consume 3 hours, 4 hours and 5 hours in department A, B & C respectively. The overheads absorption rate is – A: \u20b9 4.5 per hour, B: \u20b9 5 per hour and C: \u20b9 10.5 per hour. The total cost of the product is
\n(A) \u20b9 486
\n(B) \u20b9 386
\n(C) \u20b9 214
\n(D) \u20b9 500
\nHint:
\n\"Overview
\nAnswer:
\n(B) \u20b9 386<\/p>\n

Question 72.
\nDec 2015: The following particulars relate to the production department of a factory:
\nMaterial used : \u20b9 20,000
\nDirect labour : \u20b9 10,000
\nOverheads : \u20b9 7,500
\nOn an order carried out in the department, material consumed was \u20b9 4,000 and direct wages paid amounted to \u20b9 2,000. The number of overheads chargeable to this order on the basis of the prime cost would be
\n(A) \u20b9 1,500
\n(B) \u20b9 1,510
\n(C) \u20b9 1,700
\n(D) \u20b9 1,710
\nHint:
\nOverhead Absorption Rate = \\(\\frac{\\text { Overheads }}{\\text { Prime Cost }}\\) \u00d7 100
\n= \\(\\frac{7,500}{30,000}\\) \u00d7 100
\n= 25%
\nOverhead chargeable to order = (4,000 + 2,000) \u00d7 25% = 1,500
\nAnswer:
\n(A) \u20b9 1,500<\/p>\n

Question 73.
\nDec 2015: Allotment of the entire costs to a cost centre or unit is known as___
\n(A) Cost apportionment
\n(B) Cost allocation
\n(C) Cost absorption
\n(D) Machine hour rate
\nAnswer:
\n(B) Cost allocation<\/p>\n

Question 74.
\nJune 2016: Following information is given for an order:
\nMaterials (direct) : \u20b9 25,000
\nWages (direct) : \u20b9 20,000
\nFactory overheads: 75% of wages (direct)
\nSales: \u20b9 85,800
\nProfit: 10% on the cost of production
\nOffice overheads are charged as a percentage of factory cost. The number of office overheads and its percentage to factory cost will be___
\n(A) \u20b9 78,000 and 30%
\n(B) \u20b9 18,000 and 30%
\n(C) \u20b9 25,800 and 43%
\n(D) \u20b9 33,000 and 55%
\nHint:
\n\"Overview
\n60,000 + x + 6,000 + 0.1x = 85,800
\n66,000+ 1.1x =85,800
\n1.1x = 19,800
\nx = 18,000
\n% of factory overheads to factory cost = \\(\\frac{18,000}{60,000}\\) \u00d7 100 = 30%
\nAnswer:
\n(B) \u20b9 18,000 and 30%<\/p>\n

Question 75.
\nJune 2016: Which of the following statements are true____
\n(i) Conversion costs and overheads are interchangeable terms
\n(ii) Notional cost and imputed cost means the same thing
\n(iii) Cost accounting is not needed by a non-profit organization
\n(iv) Rent on the owned building is included in cost accounts.
\nSelect the correct answer from the options given below
\n(A) (i) and (ii)
\n(B) (iii) and (iv)
\n(C) (ii) and (iv)
\n(D) All of the above
\nAnswer:
\n(A) (i) and (ii)<\/p>\n

Question 76.
\nJune 2016: Classify the following expenses as direct (D) and indirect (I):
\n(i) Royalties charged as a rate per unit
\n(ii) Cost of making a design, pattern for a specific job
\n(iii) Salesman’s commission
\n(iv) Power, fuel, lighting of factory and office.
\nSelect the correct answer using the codes given below
\n\"Overview
\nAnswer:
\n(D)<\/p>\n

Question 77.
\nDec 2016: When the amount of overheads absorbed is less than the number of overheads incurred, it is called___
\n(A) Under-absorption of overheads
\n(B) Over-absorption of overheads
\n(C) Proper absorption of overheads
\n(D) None of the above
\nAnswer:
\n(A) Under-absorption of overheads<\/p>\n

Question 78.
\nDec 2016:
\nStatement -1
\nProduction departments and service departments are equally important for the manufacturing industry.
\nStatement – II
\nTo calculate the cost of a product, service department cost should be redistributed among the production department on a reasonable basis.
\nSelect the correct answer from the options given below___
\n(A) Both statements are correct
\n(B) Both statements are incorrect
\n(C) Statement-I is incorrect, but Statement-II is correct
\n(D) Statement-I is correct, but Statement-II is incorrect
\nAnswer:
\n(A) Both statements are correct<\/p>\n

Question 79.
\nDec 2016: Following information has been collected from cost records of Bright Ltd.:
\nDirect material: \u20b9 5,00,000
\nDirect labour: \u20b9 3,00,000
\nFactory overheads: 20% of factory cost.
\nThe number of factory overheads will be:
\n(A) \u20b9 1,60,000
\n(B) \u20b9 2,00,000
\n(C) \u20b9 1,80,000
\n(D) \u20b9 1,96,000
\nHint:
\n20% of factory cost means 25% of prime cost.
\n(5,00,000 + 3,00,000) \u00d7 25% = 2,00,000
\nAnswer:
\n(B) \u20b9 2,00,000<\/p>\n

Question 80.
\nDec 2016: Labour hour rate Administrative overheads are absorbed on the basis of
\n(A) Direct materials
\n(B) Direct wages
\n(C) Prime cost
\n(D) Works cost
\nAnswer:
\n(D) Works cost<\/p>\n

Question 81.
\nDec 2016: Following information relates to the production department of a factory:
\nMaterials used : \u20b9 80,000
\nDirect labour : \u20b9 60,000
\nOverheads : \u20b9 40,000
\nOn an order carried out in the department, materials consumed amounted to \u20b9 16,000. The overheads chargeable to this order on the basis of direct materials will be___
\n(A) \u20b9 8,000
\n(B) \u20b9 9,000
\n(C) \u20b9 8,500
\n(D) \u20b9 9,800
\nHint:
\nOverhead absorption rate = \\(\\frac{\\text { Overheads }}{\\text { Material }}\\) \u00d7 100 = \\(\\frac{40,000}{80,000}\\) \u00d7 100 = 50%
\nOverheads to be absorbed for given order = 16,000 \u00d7 50% = 8,000
\nAnswer:
\n(A) \u20b9 8,000<\/p>\n

Question 82.
\nDec 2014: If the selling price of a product is \u20b9 85,800 and the profit margin on cost is 10%, the amount of profit will be___
\n(A) \u20b9 7,800
\n(B) \u20b9 8,580
\n(C) \u20b9 7,200
\n(D) \u20b9 9,533
\nHint:
\nProfit is 10% on cost means 1\/11th of the sale price.
\nCost + Profit = Sales 100+ 10= 110
\nProfit = 85,800 \u00d7 \\(\\frac{10}{110}\\) = 7,800
\nAnswer:
\n(A) \u20b9 7,800<\/p>\n

Question 83.
\nDec 2014: Which of the following is to be included while preparing a cost sheet
\n(A) Interest paid
\n(B) Goodwill written-off
\n(C) Income-tax paid
\n(D) Salesman commission
\nAnswer:
\n(D) Salesman commission<\/p>\n

Question 84.
\nDec 2014: Cost of production plus opening stock of finished goods minus closing stock of finished goods is equal to___
\n(A) Cost of goods sold
\n(B) Cost of sales
\n(C) Sales
\n(D) Prime cost
\nAnswer:
\n(A) Cost of goods sold<\/p>\n

Question 85.
\nDec 2014: Which of the following is not a type of job costing
\n(A) Terminal costing
\n(B) Contract to cost
\n(C) Batch costing
\n(D) Operation costing
\nAnswer:
\n(D) Operation costing<\/p>\n

Question 86.
\nJune 2015:
\nNetworks cost: \u20b9 3,00,000
\nAdministrative overheads: \u20b9 1,00,000
\nOpening stock of finished goods: Nil
\nClosing stock of finished goods: \u20b9 20,000
\nSelling overheads: \u20b9 10,000
\nFrom the above information, the cost of sales will be_____
\n(A) 4,30,000
\n(B) 3,90,000
\n(C) 3,70,000
\n(D) 4,10,000
\nHint:
\n\"Overview
\nAnswer:
\n(B) 3,90,000<\/p>\n

Question 87.
\nJune 2015: Following information is available regarding an organization:
\nDirect material purchased: \u20b9 1,50,000
\nDirect material consumed: \u20b9 80,000
\nDirect labour: \u20b9 50,000
\nDirect expenses: \u20b9 30,000
\nManufacturing overheads: \u20b9 20,000
\nThe prime cost for the organization is –
\n(A) 1,60,000
\n(B) 2,90,000
\n(C) 2,30,000
\n(D) 1,80,000
\nAnswer:
\n(A) 1,60,000<\/p>\n

Question 88.
\nJune 2015: If the sales of a product are \u20b9 94,080 and the profit margin cost 12%, the amount of profit will be –
\n(A) \u20b9 7,800
\n(B) \u20b9 11,290
\n(C) \u20b9 8,580
\n(D) \u20b9 10,080
\nHint:
\nCost + Profit = Sales
\n100 + 12 = 112
\nProfit = 94,080 \u00d7 \\(\\frac{12}{112}\\) = 10,080
\nAnswer:
\n(D) \u20b9 10,080<\/p>\n

Question 89.
\nDec 2015: Item(s) excluded from the cost sheet are
\n(A) Direct material.
\n(B) Administrative overheads
\n(C) Provision for taxation
\n(D) All of the above
\nAnswer:
\n(C) Provision for taxation<\/p>\n

Question 90.
\nDec 2015: The following information is extracted from the job ledger in respect of Job No. 404:
\nMaterial: \u20b9 3,400
\nWages: 80 hours @ \u20b9 2.50 per hour
\nVariable overheads incurred for all jobs: \u20b9 5,000 for 4,000 labour hours
\nIf the job is billed for \u20b9 4,200 the profit will be
\n(A) \u20b9 600
\n(B) \u20b9 500
\n(C) \u20b9 700
\n(D) \u20b9 650
\nHint:
\n\"Overview
\nAnswer:
\n(B) \u20b9 500<\/p>\n

Question 91.
\nJune 2016: From the following particulars relating to Job No. 555, ascertain the total cost:
\nDirect materials 16,000
\nDirect labour 8,000
\nDirect expenses 1,600
\nWorks overheads are recovered on the basis of 50% on prime cost and administrative overheads at 10% of works cost. Choose the correct option
\n(A) 45,000
\n(B) 45,240
\n(C) 42,240
\n(D) 43,000
\nHint:
\n\"Overview
\nAnswer:
\n(C) 42,240<\/p>\n

Question 92.
\nJune 2016: Direct material cost f 45,000; Direct labour cost is 40% of direct material cost; Royalties on production \u20b9 4,000; Other direct expenses are 20% of prime cost. The prime cost will be
\n(A) \u20b9 78,750
\n(B) \u20b9 83,750
\n(C) \u20b9 80,400
\n(D) None of the above
\nHint:
\nLet the prime cost be ‘x’<\/p>\n\n\n\n\n\n\n\n
Direct material<\/td>\n45,000<\/td>\n<\/tr>\n
Direct labour<\/td>\n18,000<\/td>\n<\/tr>\n
Royalties<\/td>\n4,000<\/td>\n<\/tr>\n
Direct expense<\/td>\n0.2<\/td>\n<\/tr>\n
<\/td>\nx<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

45,000 + 18,000 + 4,000 + 0.2x = x
\n67,000 + 0.2x = x
\n67,000= 0.8x
\nx = 83,750
\nAnswer:
\n(B) \u20b9 83,750<\/p>\n

Question 93.
\nJune 2016: Cost of production for 10,000 units: \u20b9 1,60,000
\nOpening stock of finished goods (1,000 units): \u20b9 18,000
\nClosing stock of finished goods (FIFO): \u20b9 2,000 units
\nSelling & distribution overheads: \u20b9 2 per unit sold
\nPro ht mark-up on selling price: 20%
\nThe amount of profit will be____
\n(A) \u20b9 39,800
\n(B) \u20b9 40,500
\n(C) \u20b9 41,000
\n(D) \u20b9 40,800
\nHint:
\n\"Overview
\nAnswer:
\n(C) \u20b9 41,000<\/p>\n

Question 94.
\nDec 2016: Following information is given:
\nDirect material purchased: \u20b9 6,00,000
\nDirect material consumed : \u20b9 7,00,000
\nDirect labour: \u20b9 3,00,000
\nDirect expenses: \u20b92,50,000
\nManufacturing overheads: \u20b9 3,00,000
\nPrime cost will be____
\n(A) \u20b9 14,50,000
\n(B) \u20b9 11,50,000
\n(C) \u20b9 12,50,000
\n(D) \u20b9 15,50,000
\nHint:
\n\"Overview
\nAnswer:
\n(C) \u20b9 12,50,000<\/p>\n

Question 95.
\nDec 2016: Which of the following is not a part of the job order cost sheet___
\n(A) Direct material
\n(B) Direct labour
\n(C) Actual factory overheads
\n(D) Applied factory overheads
\nAnswer:
\n(C) Actual factory overheads<\/p>\n","protected":false},"excerpt":{"rendered":"

Students should practice Overview of Cost \u2013 Corporate and Management Accounting CS Executive MCQ Questions with Answers based on the latest syllabus. Overview of Cost \u2013 Corporate and Management Accounting MCQ Question 1. Dec 2014: The term used for process of ascertaining the cost\u2019 is known as (A) Cost (B) Costing (C) Cost accounting (D) …<\/p>\n

Overview of Cost \u2013 Corporate and Management Accounting MCQ<\/span> Read More »<\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[102],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/posts\/5207"}],"collection":[{"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/comments?post=5207"}],"version-history":[{"count":1,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/posts\/5207\/revisions"}],"predecessor-version":[{"id":29138,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/posts\/5207\/revisions\/29138"}],"wp:attachment":[{"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/media?parent=5207"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/categories?post=5207"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/tags?post=5207"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}