1. An example of an inventoriable cost would be:
a) Shipping fees
b) Advertising flyers
c) Sales commissions
d) Direct materials
2. Direct materials cost is Rs. 80,000. Direct labor cost is Rs. 60,000. Factory
overhead is Rs. 90,000. Beginning goods in process were Rs. 15,000. The cost
of goods manufactured is Rs. 245,000. What is the cost assigned to the ending
goods in process?
a) Rs. 45,000
b) Rs. 15,000
c) Rs. 30,000
d) There will be no ending Inventory
3. The FIFO inventory costing method (when using under perpetual inventory
system) assumes that the cost of the earliest units purchased is allocated in
which of the following ways?
a) First to be allocated to the ending inventory
b) Last to be allocated to the cost of goods sold
c) Last to be allocated to the ending inventory
d) First to be allocated to the cost of good sold
4. Heavenly Interiors had beginning merchandise inventory of Rs. 75,000. It made
purchases of Rs. 160,000 and recorded sales of Rs. 220,000 during November.
Its estimated gross profit on sales was 30%. On November 30, the store was
destroyed by fire. What was the value of the merchandise inventory loss?
a) Rs. 154,000
b) Rs. 160,000
c) Rs. 235,000
d) Rs. 81,000
5. Inventory control aims at:
a) Achieving optimization
b) Ensuring against market fluctuations
c) Acceptable customer service at low capital investment
d) Discounts allowed in bulk purchase
6. Which of the following is a factor that should be taken into account for fixing
re-order level?
a) Average consumption
b) Economic Order Quantity
c) Emergency lead time
d) Danger level
7. EOQ is a point where:
a) Ordering cost is equal to carrying cost
b) Ordering cost is higher than carrying cost
c) Ordering cost is lesser than the carrying cost
d) Total cost should be maximum
8. Grumpy & Dopey Ltd estimated that during the year 75,000 machine hours
would be used and it has been using an overhead absorption rate of Rs. 6.40
per machine hour in its machining department. During the year the overhead
expenditure amounted to Rs. 472,560 and 72,600 machine hours were used.
Which one of the following statements is correct?
a) Overhead was under-absorbed by Rs.7,440
b) Overhead was under-absorbed by Rs.7,920
c) Overhead was over-absorbed by Rs.7,440
d) Overhead was over-absorbed by Rs.7,920
9. A business always absorbs its overheads on labor hours. In the 8th period,
18,000 hours were worked, actual overheads were Rs. 279,000 and there was
Rs. 36,000 over-absorption. The overhead absorption rate per hours was:
a) Rs. 15.50
b) Rs. 17.50
c) Rs. 18.00
d) Rs. 13.50
10. The main purpose of cost accounting is to:
a) Maximize profits
b) Help in inventory valuation
c) Provide information to management for decision making
d) Aid in the fixation of selling price
11. In which of the following would there be a difference between financial and
managerial accounting?
a) Users of the information
b) Purpose of the information
c) Flexibility of practices
d) All of the given options
12. Which of the following is a cost that changes in proportion to changes in
volume?
a) Fixed cost
b) Sunk cost
c) Opportunity cost
d) None of the given options
13. Cost accounting information can be used for all EXCEPT:
a) Budget control and evaluation
b) Determining standard costs and variances
c) Pricing and inventory valuation decisions
d) Analyzing the data
14. Which of the following is not an element of factory overhead?
a) Depreciation on the maintenance equipment
b) Salary of the plant supervisor
c) Property taxes on the plant buildings
d) Salary of a marketing manager
15. The main difference between the profit center and investment center is:
a) Decision making
b) Revenue generation
c) Cost incurrence
d) All of the given options
16. Opportunity cost is the best example of:
a) Sunk Cost
b) Standard Cost
c) Relevant Cost
d) Irrelevant cost
17- If, Sales = Rs. 800,000, Markup = 25% of cost, what would be the value of Gross
profit?
a) Rs. 200,000
b) Rs. 160,000
c) Rs. 480,000
d) Rs. 640,000
18- Which of the following is correct?
a) Opening finished goods units + Units produced 鈥?Closing finished goods units =
Units sold
b) Units Sold = Units produced + Closing finished goods units - Opening finished goods
units
c) Sales + Average units of finished goods inventory
d) None of the given options
19- Loss by fire is an example of:
a) Normal Loss
b) Abnormal Loss
c) Both normal loss and abnormal loss
d) Can not be determined
20- In cost Accounting, abnormal loss is charged to:
a) Factory overhead control account
b) Work in process account
c) Income Statement
d) All of the given options Answer:
Since Mizzooo has answered everything except number four, I'll just answer number four.
Question Number Four: D. 81000
Beginning Inventory 75000
Add: Purchases 160000
Cost of Goods Available for Sale 235000
Less: Cost of Sales (220000 x 70 percent) 154000
Ending Inventory 81000
70 percent is the cost ratio of sales. 1-d
2-d
3-d
4- i think there is something wrong in this question
5-a
6-b
7-a
8-b
9-b
10-c
11-d
12-d
13-d
14-d
15-d
16-d
17-d
18-a
19-b
20-d 1) d
2) a
3) b
4) a
5) b
6) d
7) d
8) b
9) c
10) c
11) a
12) c
13) d
14) d
15) a
16) b
17) d
18) b
19) b
20) a I would like to correct Mizzoo on the following:
4 d. 235000 - (220000 x .70) = 81000 Cost of goods available for sale - cost of goods sold = ending inventory
16. c. Opportunity cost is always a relevant cost representing benefit foregone by selecting an alternative.
17 b. Mark up is always on cost. It works as cost + profit = sales. If cost is 100 then mark up is 25 and sales is 125. Applying this we get 800000/125 x 100 = 160000
20. c. Abnormal loss is never charged to work in process. Hence d is incorrect. If you charge it to Factory Overhead Control, it will increase the actual overheads and charged to the cost of goods manufactured.
Hence the best option is c |
