Symbiosis International Education Centre 2006 Post Graduate Diploma Business Administration Management Accounting - Question Paper

accurate ans False

ques. From the following, choose intangible assets:
accurate ans Goodwill , Patents , Trade Marks

ques. Select the accounts to be disclosed on the assets side of the Balance sheet.
accurate ans Furniture , Loan to Bank of U.S.A. , Land & building

ques. Judge the provided statement according to the provided criteria. Goods being real account, when goods are lost by fire, the goods account should be debited because the goods are not going out of the factory.
accurate ans The statement is accurate but the cause is incorrect

ques. The credit side of the sales book was overcast by Rs.2,000/-. As a outcome of this rectification, what of the provided impacts is likely to happen?
accurate ans The liability side of the balance sheet will increase by Rs.2,000/-

ques. It is stated that the income statement represents wealth increase /decrease for the organisation.
accurate ans True

ques. All personal expenses of the owner should be debited to the organisation's profit and loss account.
accurate ans False

ques. A cheque of Rs.400/- received and deposited into bank on 26th September, was credited in the pass book but was omitted to be entered in the bank book: this fault will outcome in :
accurate ans Difference in the balance as per bank book and as per pass book

ques. If the ordering cost ________s, then the economic order volume will Increase.
accurate ans Increase

ques. ________ authorises the production department to problem requistion for materials.
accurate ans Bill of material

ques. P Ltd. produces a product having a monthly demand of 4,000 units. For every 1 unit of finished product 1 unit of a component X is needed at purchase price of Rs.20/-. The ordering cost is Rs.120/- per order and the holding cost is 10% per annum. If the company places every order for 2,000 units due to financial constraints, what is the extra annual cost?
accurate ans Rs.80/-

ques. An entry in the stores ledger is needed for transfer of material from 1 job to a different in the identical department.
accurate ans False

ques. The method which deals with ownership rights being provided to workers is known as ________ method of remuneration.
accurate ans Co-partnership

ques. A firm of boiler-house engineers provides engineering services to large number of factories having boiler houses. The firm charges on the basis of number of hours its engineers have worked for the client. every engineer works for 8 hours on every working day. every engineer enjoys Saturday and Sunday as holiday. In addition he is granted a total of 21 more paid holidays in a year. An engineer's annual remuneration comprises (for the year
accurate ans Rs.182.29

ques. Marginal costing is useful in the subsequent areas :
accurate ans Plant shut down decisions , Make or buy decisions , Profit planning

ques. Cost quantity profit analysis focuses attention on the ________ effect of a particular course of action.
accurate ans short run

ques. ABC Ltd. has a proposal of utilising a cheaper raw material which will increase the contribution from Rs.100/- per unit to Rs.125/- per unit. However, the use of cheaper raw material may outcome in reduce in sales by 10% (to 450 units only). obtain the impact of using the cheaper raw material on the amount of contribution ( net increase or reduce in contribution).
accurate ans Increase in contribution Rs.6,250/-


ques. Which of the subsequent budgets may be termed as a long term budget?
accurate ans Capital expenditure budget , Research and Development expenditure budget , Budget of a transportation company

ques. A ________ can be described as a part of the orgainsation for which separate budget can be prepared and implemented.
accurate ans Budget centre

ques. The finance manager is responsible for which of the subsequent budget?
accurate ans Cash budget

ques. The role of the budget committee may be taken as an advisory role to the Chief Executive.
accurate ans True

ques. While preparing the labour cost budget, factors such as overtime working or night shift working may be ignored.
accurate ans False

ques. The true hours taken by the labour are compared with the standard hours allowed for output to obtain out the labour yield variance.
accurate ans True

ques. From the subsequent data, determine the net profit if sales are 20% above the break even point. Selling price Rs.20/- per unit, variable cost Rs.15/- per unit and fixed overheads Rs.20,000/-
accurate ans Rs.4,000/-

Match The subsequent
Question Correct ans

reduce in selling price will lead to Decrease in contribution

Increase in contribution will lead to Increase in profits

Increase in fixed cost will lead to Increase in break even point

reduce in variable cost will lead to Increase in profit quantity ratio

ques. As on 30th September, 2004 the cost of closing stock was Rs.84,696/- and its market price as on the identical day was Rs.66,584/-. Which value of closing stock should be considered in the final statement of accounts for the year ended on 30th September, 2004?
accurate ans Rs.66,584/-

ques. Marginal costing technique is useful in taking decisions relating to which of the subsequent courses of action?
accurate ans Decision to drop a product line , Decision to accept a special offer at price lower than the normal selling price , Decision regarding temporary shut-downs

ques. In a Balance-Sheet right hand side is referred as assets side and left hand side is referred as liabilities.
accurate ans True

ques. Profit and loss account shows the profit earned as on a particular date.
accurate ans False

ques. The balance of the suspense account will ________ after all the errors are
accurate ans become zero

ques. The best way to decrease labour cost is to recruit cheap labour.
accurate ans False

ques. A' started business with cash Rs. 5,000/-, building Rs. 5,000/-, furniture Rs. 2,000/-. What is the total amount of capital?
accurate ans Rs. 12,000

ques. Income Tax Act, recognise only 1 method of depreciation namely ________.
accurate ans Written down value method

ques. An adjustment relating to outstanding expenses will ________ the net profit.
accurate ans Decrease

ques. Generally, all real accounts will have a ________ balance
accurate ans Debit

ques. The current unit cost data for a product is as follows: selling price Rs.15/-, variable costs Rs.8/-. If selling prices are decreased by 10% and variable costs are increased by 12.5%. Which of the subsequent is the amended contribution to sales ratio?
accurate ans 0.333

ques. The selective ________ controls are intended to control the ________ to particular sectors without affecting the total credit, and also to change the composition of credit from undesirable to de
accurate ans credit
accurate ans credit flows

ques. Journal is popularly known as 'Book of . . .
accurate ans Original Entry

ques. Presentation of info to enable managerial decision making' is 1 of the objects of which of the subsequent
accurate ans Cost Accounting

ques. The principle of ________ is followed while preparing the financial statements.
accurate ans Going concern

Match The subsequent
Question Correct ans

Indirect Material Element wise classification

Administration overheads Function wise classification

Fixed overheads Variability wise classification

Abnormal overheads Normality wise classification

ques. In India the gas industry and electricity industry, and ________ industry are examples of industries using the uniform costing system.
accurate ans fertilizer

Multiple option Multiple ans
ques. Ram and Laxman are partners of Kush & Bros. As on first April, 2003 Ram's capital is Rs.50,000/- and Laxman's capital is Rs.80,000/-. If interest on capital is to be given @ 10% p.a., what will be the amount of capital of every of the partners as on 31st March, 2004, assuming there were no additions during this period? Also, state the treatment of this item in the Profit and loss account.
accurate ans Ram's capital Rs.55,000/- , Laxman's capital Rs.88,000/- , Interest on capital should be debited to the Profit and loss account

ques. Non-trading income is disclosed on the credit side of ________ account.
accurate ans Profit and loss

ques. Goods returned to the suppliers from whom it was ________d is recorded in the Purchase return register.
accurate ans Purchase

ques. An advertisement contract was made with an artist which said that the remuneration will be 12% of net sales. On an avg. the monthly sales were Rs.36,000/-, however the avg. rate of sales return was 5% of that month's sale. obtain the expenditure on account of advertisement.
accurate ans Rs.49,248/-

ques. Goods kept in the godown were destroyed by fire on 18th June, 2004. The cost of such goods was Rs.18,950/-. The goods were not insured. obtain the amont which should be debited to the profitability statement.
accurate ans Rs.18,950/-

ques. Generally speaking income represents wealth increase and business success; higher the income, lower will be the success of a business.
accurate ans False

ques. While preparing the bank reconciliation statement as on 31st March, 2004 you obtain the subsequent discrepancy : 'a cheque of Rs.3,700/- received and deposited in bank on 27th March, 2004 was entered credited in the pass book on third April, 2004.' In this background, which of the subsequent statement holds actual as on 31st March, 2004?
accurate ans Balance as per pass book < Balance as per bank book

ques. Bank reconciliation statement is a systematic presentation of errors made by the accountant.
accurate ans False

ques. The stores department is a ________ department.
accurate ans Service

ques. The ________ is a perpetual inventory record.
accurate ans Bin card

ques. Selecting an improper method of evaluation of inventory is important because :
accurate ans It influences the figure of gross profit

ques. Re-order level for materials is determined considering maximum consumption and maximum delivery period.
accurate ans True

ques. Under a few circumstances, it may be advisable to sell at prices equal to or beneath the marginal cost ignoring fixed cost.
accurate ans True

ques. Economical use of labour, materials and facilities can achieved with the help of ________.
accurate ans Budgetary control

ques. Select the advantages of standard cost system.
accurate ans Provides reliable basis for budgeting , Facilitates delegation of authority , Promotes economy and efficiency

ques. Which variance is used to analyse the effect of change in the volume of output from a provided mix of inputs?
accurate ans Materials yield variance

ques. Judge the statement according to the criteria provided : ' The accounting period for XYZ Ltd. ends on 31st December, 2003. It is noted that office rent for the month of December, 2003 is paid on 15th January, 2004. "According to concept of matching expenses with the revenues, this expenditure should be recorded in the books of accounts in January,
accurate ans The statement and its cause are both incorrect

ques. From the subsequent choose the examples of errors of commission -
accurate ans Sales recorded in the sales register as Rs.2,020/- instead of Rs.2,200/- , Received cash from Sham, credited to Ram's account , Paid transport charges, credited to transport charges account

ques. Expenditure on income-tax is an example of ________.
accurate ans non-operating expenditure

ques. Identify the items which are correctly classified.
accurate ans Carriage inward - Factory overheads , Carriage outward - Selling and distribution overheads , Sales research expenses -Selling and distribution overheads

ques. Select the items which may be classified as administration overheads.
accurate ans Depreciation on office furniture , Director's remuneration , Telephone expenses

ques. Overhead absorption is an exercise by which overhead is properly spread over production for the period.
accurate ans True

ques. Which system involves adoption of identical costing principles, practices and procedures by the individual firms of an industry ?
accurate ans Uniform costing

ques. A new computer worth Rs.35,000 was purchased on 18th June, 2003. The company has 10 such computers costing Rs.20,000/- every. The depreciation is charged @ 18% p.a. obtain the depreciation on computers to be charged for the year.
accurate ans Rs.40,953.70

ques. The amount of income for the current period which is not received during the current period, is called Accrued Income.
accurate ans True

ques. The balance as per bank book as on 30th June, 2004 is Rs.10,298/- while the balance as per pass book as on the identical date is Rs.10,123.60. choose the transactions representing the reasons for this difference.
accurate ans Interest credited by bank, not entered in the bank book, Rs.125.60 , Cheques dishonoured not entered in the bank book Rs.200/- , Debit side of the cash book is overcast by Rs.100/-

ques. The principal functions of the cost accounting department are :
accurate ans Classifying labour cost according to jobs, processes, etc. , Preparation of various reports based on direct, indirect labour cost, etc. , To focus on areas where labour cost may be decreased.

ques. Profit quantity ratio is also known as ________.
accurate ans Contribution to sales ratio

ques. Margin of safety = Contribution / Profit quantity ratio
accurate ans False

ques. Depreciation, interest and property tax continue on even when the operations are discontinued.
accurate ans True

ques. The reasons and objectives of budgets may be said as :
accurate ans To aid the planning of annual operations , To communicate the organisational plans to the various departments , To motivate the managers to strive for attainment of the organisational goals

ques. The key factor determines the :
accurate ans Level of activity , Capacity utilization , Level of sales

ques. Essentials for effective implementation of budgetary control system are
accurate ans Commitment of top management , Clearly described objectives , Continous budget education

ques. Which of the subsequent is a accurate definition of the key factor?
accurate ans The factor which limits the activites of the undertaking

ques. The integrated form of all functional budgets is known as :
accurate ans Master budget

ques. For the month of November, a firm has budgeted sales of 20,000 units of X at a price of Rs.10/- and sale of 30,000 untis of Y at a price of Rs.6/- per unit. true sale during the month was 35,000 units of X at Rs.9/- per unit and 25,000 units of Y at Rs.8/- per unit. compute sales quantity variance, sales mix variance and sales volume variance.
accurate ans Sales quantity variance -Rs.120,000/- (Favourable) , Sales mix variance -Rs.44,000/- (Favourable) , Sales volume variance-Rs.76,000/- (Favourable)

ques. ________ variance represents the over or under utilisation of pland and machinery.
accurate ans Capacity

ques. The subsequent data relates to the month of October : true variable overheads Rs.60,000/-; budgeted variable overheads Rs.80,000/-; true output 900 units; budgeted output 1,000 units; standard time for 1 unit - two hours. compute variable overhead efficiency variance.
accurate ans Rs.4,000/- (Favourable)

ques. Which of the subsequent operations would normally be carried out 1st when preparing a master budget?
accurate ans Determining the budget period

ques. Interest on capital is an allowable expenditure for parntership firms, as per the provisions of the ________ .
accurate ans Income Tax Act, 1961

ques. Mixers Ltd. is engaged in producing a standard mix using 60kg of chemical X and 40 kg of chemical Y. The standard loss of production is 30%. The standard price of X is Rs.5/- per kg.and of Y Rs.10/- per kg. The true mix and yield were as follows : X - 80 kg @ Rs.4.50 per kg; Y - 70 kg @ Rs.8/- per kg. true yield - 115 kg.Compute material yield variance.
accurate ans Rs.100/- (Favourable)

ques. Select the examples of functional budgets:
accurate ans Sales budget , Production budget , Research and development budget

ques. Sita and Gita are partners of SGL & Co. As on first August, 2003 Sita's capital stood as Rs.10,000/- and Gita's capital as Rs.18,000/-. If interest on capital is to be given @ 10% p.a., what should be the treatment of this interest in the profitability statement, assuming there were no additions to capital during this period?
accurate ans Profit and loss account should be debited with Rs.1,866.67

ques. KDL Ltd. charges depreciation @ 20% on written down value method. The net book value of its machinery on first January, 2003 was Rs.125,000/-. What will be the net book value of its machinery on year end, i.e.31st December, 2003, assuming there were no additions or disposals during the year?
accurate ans Rs.100,000/-

ques. Standard costing is always accompanied by a system of budgeting but budgetary control may be operated in business where standard costing is impracticable.
accurate ans True

ques. An amount of Rs.200/- is received from P and is credited to Q. The rectification entry would affect ________
accurate ans P's A/c and Q's A/c

ques. Budgetary control system provides a basis for establishment of the incentive systems.
accurate ans True

ques. A fixed budget is useful only when the true level of activity corresponds to the budgeted level of activity.
accurate ans True

ques. A low margin of safety shows ________ fixed overheads.
accurate ans higher

ques. Category A items, as per ABC analysis, represent ________ % of the total number of items in inventory.
accurate ans less than 10

ques. The gross profit transferred from the trading account is Rs.98,999/-. The expenses debited to the profit and loss account are salary Rs.12,000/-; advertisement expenses Rs.18,000/-; printing and stationery Rs.5,500/- and managing director's incentive Rs.28,000/-. It was noted that no entry was made for salary of 1 month which was due but not yet paid. obtain the net profit of the company.
accurate ans Rs.34,408.09

ques. Price based on Uniform Costing may be taken to be reliable and representative of the whole industry.
accurate ans True

ques. The budget manual must contain statement regarding:
accurate ans Objectives of the orgainsation

ques. Annual subscription paid by bank to the Chamber of Commerce on 31/03/04, as per the standing instructions, and advise sent thereafter, may lead to:
accurate ans Balance as per bank book > Balance as per pass book

ques. Entry for dishonour of cheque appears only in the pass book, this entry should be ________ in the bank book.
accurate ans Passed

ques. Since the pass book and the bank book record the ________ transactions, the bank balance as per these books should be equal.
accurate ans Same

ques. A pre-determined factory overhead rate holds up product costing.
accurate ans False

ques. Rent of Rs.7,500/- for the month of April was received in March. Which account should be credited in the books of accounts for making an entry for receipt of the stated amount?
accurate ans Rent received in advance account

ques. Bank reconciliation statement can be prepared on weekly basis.
accurate ans True

ques. Amit sold Goods to Atul for Rs. 50,000/- on cash & Rs. 50,000/- on credit basis. Amit allowed 10% discount for on the spot transaction. What is the amount that should be debited to the cash account?
accurate ans Rs.45,000/-
ques. Financial Accounting ______________
accurate ans Designed to supply info for internal/ external uses. , Deals with the transaction during specific period. , It is compulsory

ques. Cost Accounting ______________.
accurate ans Concerned with specific activities. , Classified according to their nature. , It deals with both i.e. past & current.

ques. Features of double entry accounting system are . . .
accurate ans Every business transaction has 2 elements , When business receives something, it has to pay something , Every debit has a corresponding credit

ques. Features of a cost sheet are as follows
accurate ans Indicates the total cost of production during a provided period , shows the unit cost of production during a provided period , Helps the management in fixing the selling price to be quoted for the

ques. Depreciation charged on office furniture on straight line basis is an example of ________.
accurate ans Administration overheads

ques. If Rs.15,000/- has been paid to Kargil Relief Fund as the owner's personal contribution, ________ account should be debited in the books of accounts of the business.
accurate ans Drawings

ques. Included in the trial balance is the sales promotion suspense account with a debit balance of Rs.6,300/-. It is provided that this balance should be written off. compute its impact on profit of the company.
accurate ans The net profit will reduce by Rs.6,300/-

ques. A lathe machine was purhcased on 31st March, 2004 for Rs.65,000/-, however it was installed only on fifth April, 2004. The depreciation is charged @ 15% p.a.. obtain the amount of depreciation charge for the stated lathe machine for the year ended 31st March, 2004.
accurate ans Nil

ques. While passing the journal entry, it is of utmost importance to ensure that the total of amount debited is equal to the total of the amount credited.
accurate ans True

ques. The bin card and stores ledger, being independent records, comparison of these 2 records should be avoided.
accurate ans False

ques. The cost of idle time incurred by employees that is considered normal for the production process should be charged to :
accurate ans Factory overheads

ques. The cost of abnormal time may be recovered by inflating the hourly labour rate.
accurate ans True

ques. ABC Ltd. is planning to sell 200,000 units of product B. The fixed costs are Rs.400,000/- and the variable costs are 60% of the selling price. In order to realize a profit of Rs.100,000/-, the selling price per unit would have to be :
accurate ans Rs.6.25

ques. In which of the subsequent situations, the flexible budget should be preferred?
accurate ans Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity

ques. The budget that represents the funds investment for expansion, diversification, etc. is known as ________.
accurate ans Capital expenditure budget

True/False
ques. Amortization of goodwill should be considered while preparing cash budget.
accurate ans False

ques. As cost centers facilitate the control function, in many cases, they are termed as . . .
accurate ans Responsibility centers

ques. Lata and Tara are partners of Latara & Co. As on 31st March, 2004 Lata's annual drawings were as Rs.25,000/- and Tara's annual drawings amounted to Rs.18,000/-. If interest on drawings is charged @ 15% p.a., what is the amount of income for Latara & Co.?
accurate ans Rs.6,450/-

ques. Labour turnover rate is best described as :
accurate ans The number of leavers changed divided by the avg. of employees on the payroll

ques. Which system provides an opportunity to companies to adopt the 1 best method of cost accounting system known to the industry ?
accurate ans Uniform costing

ques. An order for goods worth Rs.18,000/- was placed on 25th March, 2004. The goods were received on first April, 2004. compute the impact of this transaction on the final statements of accounts for the year ended 31st March, 2004.
accurate ans The net profit will not be affected

ques. Interim dividend paid by the company should be debited to the profit and loss appropriation account.
accurate ans actual

ques. The short run financial plan which acts as a guide to achieve the predefined targets is known as ________.
accurate ans Budget

ques. Indirect Cost is termed as ________.
accurate ans Overhead

ques. Interest on ________ is credited to Capital account.
accurate ans Capital

ques. The effect of price reduction is always reduction in the margin of safety and also reduction in the break even point.
accurate ans False

ques. Which of the subsequent is likely to be a contributory factor to the incidence of excess expenditure on material cost?
accurate ans The level of control of the used of material in the production cycle , The incorrect option of purchase order volume , Failure to control the problem of materials from stores

ques. Accounting is the art where transactions are …
accurate ans Summarized , Classified , Recorded

ques. If excess of cash is estimated in the cash budget, it may be possible to utilise it to provide bonus to the employees.
accurate ans False

ques. The operating profit as per cost statement may differ from the profit as per Profit and Loss Account due to existence of
accurate ans Depreciation on plant and machinery , Interest on loans taken from other , Interest on loans granted to others

ques. Any amount of profit earned in the past which is not distributed to the owner, belongs to the creditors.
accurate ans False

ques. Management accounting is concerned with the subsequent activities :
accurate ans Decision making , Safeguarding assets , Planning and controlling activities

ques. Budgeted profit and loss account and budgeted balance sheet are also known as ________.
accurate ans Master budget

ques. A grinding machine is an example of impersonal cost centre
accurate ans actual

ques. Piece rate systems are very useful in the subsequent circumstances:
accurate ans Units of output are measurable , Job is standardised , The flow of work is regular

ques. The process of recording the business transactions in a described set of records is referred to as ________.
accurate ans Balance sheet

ques. A ________ inventory turnover period shows efficient utilisation of material.
accurate ans Low

ques. Purchased 200 shares of Bharat Forge Ltd. for Rs.850/- per share, which account should be debited?
accurate ans Investment account - Rs.170,000/-

ques. The data for 2 materials P and Q is provided beneath : Material P : opening stock Rs.80,000/-; closing stock Rs.40,000/- and purchases Rs.500,000/-. Material Q : opening stock Rs.170,000/-; closing stock Rs.60,000/- and purchases Rs.750,000/-. Identify which of the provided statements relevant to the data provided are accurate.
accurate ans Inventory turnover period for material P is 40.5 days , Material P is faster moving material , Consumption of material Q is Rs.860,000/-

ques. Overhead absorption rate will be various at various capacity levels.
accurate ans actual

ques. Under Differential Time Rate method payment is made at Rs. 1.40 per hour when the level of efficiency is between________.
accurate ans 90% to 100%

ques. The option courses of action for an integrated textile mill are:
accurate ans Sell cloth

ques. The Ezee Company Ltd. plans to sell 108,000 units of product E in 1st quarter of 2004, 120,000 units in 2nd quarter of 2004, 132,000 units in 3rd quarter of 2004, 156,000 units in 4th quarter of 2004and 138,000 units in the 1st quarter of 20
accurate ans 153,000 units

ques. The selection of ________ may depend upon the different factors like characteristics of the business organisation, tax considerations, statutory requirements etc.
accurate ans Accounting period

ques. Furniture account will always have a ________ balance.
accurate ans Debit

ques. Product costs under direct costing include:
accurate ans Prime cost and variable factory overheads

ques. Uniform costing may lead to monopolistic conditions within the industry, prices may be raised and customers may suffer.
accurate ans actual

ques. Items debited to Profit & Loss Account are…
accurate ans Salary , Discount allowed , Postage & telegram

ques. choose the entries which need to be rectified
accurate ans Purchase A/c ......... Dr. to Damodar's A/c (Being furniture purchased from Damodar) , Gopal's A/c ........... Dr. to cash A/c (Being entry for payment of railway freight for goods purchased) , Cash A/c ............Dr. to Suresh's A/c (Being cash received from Suresh for goods sold to him for)

ques. The bank book indicates an overdraft of Rs.117/- as on 31st December, 2003. It is obtained that the pass book is debited with Rs.11/- representing a dishonoured cheque, originally received from Mr.A. The fact of dishonour was not recorded in the bank book. obtain the balance as per pass book.
accurate ans Rs.128/- (overdraft)

ques. Identify the fixed expenses from the subsequent.
accurate ans Rent and taxes of the factory , Wages paid to indirect workers like cleaners, helpers,etc. , Salary paid to factory supervisor

ques. Budgetary control is 1 of the techniques of management accounting.
accurate ans actual

ques. Management Accounting is a developed stage of Cost Accounting
accurate ans actual

ques. In the ledger account only credit entries relating to a particular account are posted.
accurate ans False

Match The subsequent
Question Correct ans

Global Tender Any supplier from the global market can fill the tender

Single Tender Tender from only 1 supplier

Limited Tender Tenders from reliable but few suppliers

Open Tender Any supplier from the local market can fill the tender

ques. Fixed overhead variances may be computed either on the basis of units of output or on the basis of standard hours.
accurate ans actual

ques. Features of Taylor's differential piece rate system are as follows :
accurate ans Minima clerical work is involved in calculating the wages , Helps in building up an efficient labour force , Strong incentive to efficient and ambitious workers.

ques. Financial Accounting discloses the financial performance & Financial status of the business as a whole
accurate ans actual

ques. Cost Accounting is a legal requirement.
accurate ans False

ques. Cash account can have a credit balance.
accurate ans False

ques. Labour turnover means :
accurate ans Influx and exit of employees , Quantitative measurement of instability of working force , Rate of change in the avg. working force

ques. Financial Statements which are generated as a outcome of the management accounting report & financial performance of the organization as a whole.
accurate ans False

ques. The half-yearly sales of product X are as follows : first half -30,000 units; second half - 37,500 units. The production trend of the company is based on 80% of the sales of the current 6 months and 20% of the budgeted sales of the next 6 months. Calcu
accurate ans first half -31,500 units; second half - 30,000 units

ques. The variance which denotes the variation in overhead recovery due to the budgeted volume of products being greater or less than true production, is known as ________ variance.
accurate ans quantity

ques. As per the provisions of part 209 of ________, all the company form of organisation is legally needed to follow the mercantile or accrual system of accounting.
accurate ans The Companies Act, 1956

Question Cost Accounting and Management Accounting are similar to every other in many respects.
accurate ans actual

ques. The reports generated by financial accounting are meant for the use by management for effective decisions.
accurate ans actual

ques. Token or disc method is a related to the system of ________.
accurate ans Time-keeping

ques. Cost Accounting may be considered to be a part of management Accounting.
accurate ans actual

ques. The ________ variance is the difference ranging from the true variable overhead incurred and the standard variable overhead charged to production.
accurate ans Total variable overhead

ques. It is stated that marginal costs are used primarily in guiding decisions that are yet to be made.
accurate ans actual

ques. Management Accounting is not at all a legal requirement
accurate ans actual

ques. Identify the variable expenses.
accurate ans Repairs of plant when it is undertaken by an outside agency , Carriage inward by hired carriers , Wages paid to casual workers

ques. Which of the subsequent cost is also termed as Prime Cost ?
accurate ans Direct cost

ques. The method of remuneration under which the workers are provided in share in profits of the organization, at a specified percentage, along-with their wages, is known as ________ method.
accurate ans Profit-sharing

ques. choose the improper rectification entries for the subsequent transactions (i) Rs.200/- received in respect of a bad debt previously written off was credited to Debtors account. (ii) Paid Rs.6,000/- to a Mr. Rao, clerk, as salary in lieu of notice. This amount was debited to his personal account (iii) Interest @ 5% p.a. on a loan of Rs.5,000/- was debited to general expenses account.
accurate ans Debtors A/c ..........Dr. Rs.200/- to bad debts recovered A/c Rs.200/- , Rs.6,000/- to Rao's A/c Rs.6,000/- , Rs.250/- to General Expenses A/c Rs.250/-

ques. Quantify the increase in profit on account of subsequent errors : (a) Repairs of furniture amounting to Rs.2,000/- were debited to furniture account. Furniture is depreciated @10% p.a. (b) Interest received on bank deposits was credited to dividend received account, Rs.1,550/- (c) A television purchased for the managing director's office for Rs.45,000/- was debited to Interior decoration expenses.
accurate ans Rs.43,200/-

ques. The analysis which is also referred as 'what if' analysis is known as________.
accurate ans Cost quantity profit analysis

ques. The balance sheet has 3 columns, viz. assets, liabilities and ledger folio.
accurate ans False

ques. The different areas in which uniform costing can be adopted are . .
accurate ans evaluation of inventories , Charging of depreciation , Apportionment of overheads

ques. The varinace that attempts to ascertain the effect of change in sales quantity on the difference ranging from true and budgeted contribution is known as ________ variance.
accurate ans Sales margin quantity

ques. Depreciation is caused by use factor, obsolescence and ________.
accurate ans Time factor

ques. Depreciation under Reducing Balance Method is computed as (Number of units * Rate of depreciation per unit)
accurate ans False

ques. All cash sales are recorded in the sales register.
accurate ans False

Match The subsequent
Question Correct ans

Transport facilities to employees Preventive cost of labour turnover

Relationship ranging from supervisor and worker Avoidable reason of labour turnover

Dismissal of employee Unavoidable reason of labour turnover

Increased spoilage and defectives Replacement cost of labour turnover

ques. Indirect material cost is an integral part of finished goods.
accurate ans False

ques. choose the different methods adopted for treatment of under or over absorbed overheads
accurate ans Use of supplementary rates , Carrying over the amount to remaining period , Writing off to the Costing Profit and Loss Account

ques. It is difficult to apply Uniform costing system for an industry which has labour intensive companies as well as capital intensive companies, because :
accurate ans The cost structure is various

Match The subsequent
Question Correct ans

Normal Standards Anticipated to be achieved in future

Basic Standards Established for a longer period of time

Current Standards Established for a shorter period of time

Expected Standards Anticipated to be achieved in the budget period

True/False
ques. Trading account is an important account which will be used to analyze how successful and how efficiently the firm runs its business.
accurate ans actual

ques. Loans which are borrowed from financial institutions are to be paid off in eight years, should be disclosed as ________ in the balance sheet.
accurate ans Long term liabilities

ques. The gross profit for the year 2004 is Rs.184,326/-. The depreciation on furniture for the year is Rs.24,561/-; dividend received amounted to Rs.12,000/- and the director's remuneration worked out to be Rs.95,784/-. obtain the net profit for the year 2004.
accurate ans Rs.75,981/-

ques. The components of the selling and distribution cost budget are :
accurate ans Distribution expenses , Publicity expenditure , Salary of sales-office workers

ques. choose the accurate statements. Ram's account…….Dr. Rs.10,000 To Bank account Rs.10,000
accurate ans Ram is a creditor , Rs.10,000/- has been paid to Ram , The payment is made by cheque

ques. A written order sent to inform the purchasing department of a need for materials is called a ________.
accurate ans Purchase requisition note

ques. The overheads apportioned to 3 production departments A, B and C and 2 service departments P and Q are Rs.75,000/-; Rs.100,000/-; Rs.80,000/-; Rs.60,000/- and Rs.40,000/- respectively. Overheads of department P are shared by A, B, C and Q in the ratio of four : three : two : one and that of department Q are shared by A, B, C and P in the ratio of three : three : two : 2. Ascertain the total overheads of every production department.
accurate ans A -Rs.116,836/-; B -Rs.134,889/- and C -Rs.103,265/-

ques. Re-order volume may be measured as :
accurate ans Maximum stock level - re-order level + (minimum usage X minimum re-order period)

ques. If the total amount on the ________ side of commission account is more than the total of its credit side, the commission account is stated to have a Debit balance.
accurate ans Debit

ques. An fault of partial omission can be rectified by either debiting or crediting the ________ account, as the case maybe.
accurate ans suspense

ques. The final outcome disclosed by trading account is the ________profit earned by the organization.
accurate ans Gross

ques. Number of days inventory is held can be computed by dividing number of days in a year by ________.
accurate ans Inventory turnover ratio

Match The subsequent
Question Correct ans

Total cost Cost of finished goods

Non operating income Profit on sale of investment

Selling and distribution overheads Advertisement expenses

Factory overheads Repair for factory building

ques. The amount of profit which is retained by the organisation is transferred to 'Reserves and Surplus' in the balance sheet.
accurate ans actual

ques. Purchase of national saving certificates by the company from its profits, should be debited to ________ account.
accurate ans Investments

ques. compute inventory holding period. Safety stock - 250 units; maximum stock - 6,500 units; re-order volume - 3,800 units and material issued during 2003 is 24,000 units.
accurate ans 66.9 days

ques. Material mix and material yield variance can be computed even when only 1 raw material is used for production.
accurate ans False

ques. A factory has eight hours a day and the standard daily wage is Rs.80/-. Standard output per hour is five units. During a day worker P produced 30 units, Q produced 36 units and S produced 42 units. compute wages payable to P,Q and S under Merrick Multiple Piece Rate System.
accurate ans P - Rs.60/-; Q - Rs.79.20; S - Rs.100.80

ques. A company budgets for a production of 150,000 units. The variable cost per unit is Rs.14/- and fixed cost is Rs.2/- per unit. The company fixes its selling price to fetch a profit of 15% on total cost. What is the break even point for the company?
accurate ans 68,182 units

ques. The organization chart indicates the subsequent aspects :
accurate ans Functional responsibility of various functional managers , Delegation of authority to different managers , Inter-functional relationships of these managers

ques. choose the accurate formulae for calculating break even point.
accurate ans Fixed cost / (Selling price per unit - Variable cost per unit) , [Fixed cost / Marginal contribution] X Sales , [Fixed cost / (Fixed cost + Net Profit)] X Sales

ques. choose the transactions which can be entered in the Journal proper.
accurate ans Opening entries , Closing entries , Rectification entries

ques. The least profit quantity ratio can be ________%.
accurate ans 0

ques. Trading account is used to analyse how successfully and how efficiently the firm runs, particularly with regards to the maintenance of the gross profit margin.
accurate ans actual

ques. compute the earnings of workers Monica and Sonica under Taylor's differential piece rate system. Hours in a day =8; normal rate per unit = Rs.12/-; standard time per unit = 30 seconds; rate differential : 80% of piece rate beneath standard, 120% of piece rate at or above standard. Monica produces 900 units per day and Sonica produces 1,100 units per day.
accurate ans Monica -Rs.72/-; Sonica - Rs.132/-

ques. The factors that influence determination of budget period are :
accurate ans kind of budget, viz. Sales or capital expenditure budget , General economic conditions , Trade cycle of business

ques. Uniform costing system can be successfully implemented in any industry only when :
accurate ans info is freely supplied by all the units , Well organised sector is ready to share the technological improvements , info furnished by the units is complete and accurate

ques. In marginal costing, under and over absorption of fixed overheads is bound to arise.
accurate ans False

ques. Trade Discount refers to the discount . . .
accurate ans received on purchases

ques. A firm has monthly fixed cost commitment of Rs.200,000/-. It is producing only 1 product which is sold at a price of Rs.80/- per unit. Per unit variable cost is Rs.50/-. compute annual break even point.
accurate ans 80,000 units

ques. Cool-wind Ltd., manufactures fans, which at sold at Rs.400 pre piece. The cost of sales is composed of 40% of direct material, 30% wages and 30% overheads. An increase in material price by 25% and in wage rate by 10% is expected in the forthcoming year; as a outcome of which the profit at current selling price may dwindle by 39% of current gross profit. With the above information, you are needed to determine the future selling price, if the current rate of gross profit is to be maintained.
accurate ans Rs.452/-

ques. Credit balance in interest account shows income for the organisation.
accurate ans actual

ques. Money Measurement Concept__________________
accurate ans Only those transactions and facts expressed in terms of money , This Concept imposes severe restrictions on the type of info available from financial statements , Due to several restrictions it becomes drawback of financial accounting

ques. A started business with cash 5000, building 5000, furniture 2000, having depreciation of 10% on building. The total amount of capital comes to Rs. __________
accurate ans 11500

ques. The periodical total of sales book was cash short by Rs. 5000 for rectifying the same, which A/C to be debited
accurate ans Suspense A/C

ques. subsequent errors do not affect the trial balance
accurate ans fault of Principle , fault of Omission , fault of Commission

ques. A contractor’s bill for the extension of premises amounting to Rs. 2750 has been debited to building repair account
accurate ans False

Match The subsequent
Question Correct ans

Opportunity Cost Cost can be controlled

Differential Cost Historical Cost

Sunk Cost Cannot be controlled

Controllable Cost Increase or reduce in cost

Uncontrollable Cost Return or yield

ques. Indirect material cost assist the manufacturing process is an integral part of finish goods.
accurate ans False

ques. Dividend received is a Non-operating Income.
accurate ans actual

ques. A Co. having factory cost of Rs. 13,10,800. The administrative overheads are salaries 40,000, rent & rates 6400, Traveling expenses 12,400, Depreciation 2400, Directors fees 24,000, General Charges 2
accurate ans 14,59,200

ques. Factory overheads are termed as
accurate ans Production overheads , Works overheads , Manufacturing overheads

ques. The aims of perpetual inventory system are as follows
accurate ans Maintaining Bin cards , Maintaining store ledger , Continuous verification of physical stock

ques. These are the features of variable overheads
accurate ans vary directly in proportion to quantity of output. , per unit cost remains the identical , total overheads may increase or reduce as per quantity of output.

ques. The ultimate incorporation of all functional budgets takes the form of budgeted Profit & Loss Account and Balance Sheet.
accurate ans actual

ques. If during a month anticipated sales are 5,000 kg, opening stock is 1,000 kg and closing stock is 500 kg then what will be the volume of production
accurate ans 4,500 kg

ques. The treatment of ________ time in cost accounting depends upon the distinction ranging from normal and abnormal time.
accurate ans Idle

ques. Budgeted profit and loss account and budgeted balance sheet are also known as ________.
accurate ans Master budget

ques. Differential cost analysis is incorporated in the cost books.
accurate ans False

ques. The process of recording attendance time of the workers is known as time booking.
accurate ans False

ques. Factory light, telephone expenses are examples of ________ expenses.
accurate ans Indirect

ques. For successful implementation of uniform costing system, it is very essential to devise ________, containing recommended cost accounting plan and procedures.
accurate ans cost manual

ques. The combination in which various products are sold by a company is known as ________.
accurate ans Sales mix

ques. Which of the subsequent is usually prepared daily by employees for every job worked on?
accurate ans Job card

ques. Profit = Profit quantity ratio X Margin of safety
accurate ans True

ques. The management of Horngreen Ltd. is deciding whether to continue on working at loss or to temporarily shut down the factory. State the qualitative aspects that must be considered before arriving at a decision.
accurate ans Loss of trained personnel , Loss of regular customers , Expenditure needed to restart the factory

ques. Locate the fault and its features in the subsequent -
accurate ans Compensating errors , Trial balance will not be affected , Trial balance will be affected

ques. Rs.2,650/- were paid to ABC Ltd. for maintenance of machine; which account should be debited for this transaction?
accurate ans Maintenance of machine account

Multiple option Multiple ans
ques. Which of the formulae can be used to compute profit quantity ratio :-
accurate ans Change in contribution / change in sales , one - (Change in variable cost / change in sales) , (Fixed cost + Profit) / Sales

Multiple option Multiple ans
ques. International Motors manufactures crankshafts for jeeps and trucks. They have furnished the subsequent particulars for the quarter ended 31st March : Materials Rs.298,000/-; direct wages Rs.42,000/-; store expenses Rs.20,000/-; machinery maintenance Rs.4,600/-; depreciation Rs.22,300/-; staff welfare Rs.12,000/-; general expenses Rs.30,000/-; administration and selling expenses Rs.27,000/-. Additional info given by them : Production 300 numbers of jeep and 400 trucks; material cost ratio per vehicle ranging from jeep and truck is one : 2. Direct labour ratio per vehicle for jeep and truck is two : 3. Machine hour ratio per vehicle for jeep and truck is one : 2. choose the statements which are actual and accurate.
accurate ans Cost per crankshaft for jeep is Rs.445.45 , Cost per crankshaft for truck is Rs.805.66 , General expenses should be apportioned on direct labour ratio

Multiple option Single ans
ques. The direct material usage budget and direct material purchase budget differ because of which of the following?
accurate ans A planned change in the level of material stock

Multiple option Multiple ans
ques. Plant and equipment can become a key factor in the subsequent circumstances :-
accurate ans Limited capacity due to lack of capital , Insufficient capacity due to shortage of space , Limited number of hours for which the plant can be used

Multiple option Multiple ans
ques. Select the accounts to be disclosed on the liability side of the Balance sheet :-
accurate ans Loan , Outstanding expenses , Creditors

choose The Blank
ques. The ________ books are preferred when the quantity of transactions is very large.
accurate ans Subsidiary

choose The Blank
ques. ________ is any documentary evidence to justify that a particular transaction has taken place.
accurate ans Voucher

choose The Blank
ques. The final outcome disclosed by Profit & Loss Account is the ________ profit after taxes earned by the organization.
accurate ans Net

True/False
ques. Receipts and payments method of cash budget is useful for preparing long term estimates.
accurate ans False

Multiple option Single ans
ques. The Asian Industries specialises in the manufacture of small capacity motors. The cost structure of a motor is as under : Material Rs.50/-; labour Rs.80/-; variable overheads 75% of labour cost. The fixed overheads of the company amount to Rs.240,000/- per annum. THe sale price of the motor is Rs.230/- every. Determine the number of motors that have to be manufactured and sold in a year in order to break-even.
accurate ans 6,000 motors

True/False
ques. The purpose of profit and loss account is to brign together info which relates to gross profit and the expenses for running the business.
accurate ans True

True/False
ques. If the storage cost of inventory increases, then the economic order volume also increases.
accurate ans False

Multiple option Single ans
ques. The reporting method used in the costing system should be based on the principle of
accurate ans Management by exception

Multiple option Single ans
ques. XYZ Ltd. has a profit quantity ratio of 40%. By what percentage should sales be increased to offset 20% reduction in selling price, so that the existing profit remains intact.
accurate ans 0.6

Multiple option Single ans
ques. A company manufactures and sells 4 products, viz. A, B, C and D. The details are as follows : Profit quantity ratio:-Product A- 20%, Product B- 40%, Product C-25%, Product D-18%; Incremental rupee sale for every Rupee spent on advertisement:-Product A- Rs.11/-, Product B-Rs.6/-, Product C-Rs.12/-, Product D-Rs.10/-. Amount of advertisement available is only Rs.5,000/-.
accurate ans Product B

True/False
ques. Match
accurate ans True

Multiple option Single ans
ques. An analysis of the time card of a worker on a machine indicates that of the total 48 hours, he worked 45 hours (including four hours overtime) on production and that three hours was idle due to machine break-down. The rate of the worker is rupees ten per hour : but overtime is paid at 50 per cent extra. You are needed to compute the earnings of the worker.
accurate ans Rs.500/-

choose The Blank
ques. In case of seasonal industry, the budget period may be taken as ________.
accurate ans One season

Multiple option Single ans
ques. The standard derpartmental overhead rate is Rs.15/- per hour. Based on the subsequent details, work out the activity level at which the overhead rate has been pre-determined. Activity level : 600 hours; overhead allowance Rs.12,000/-. Activity level : 800 hours; overhead allowance Rs.14,400/-. Activity
accurate ans 1,600 hours

True/False
ques. The total of the direct costs are termed as overheads.
accurate ans False

Multiple option Single ans
ques. Amit purchase of Rs. 6710 had been posted to the debit of the creditors A/C as 6170 rectifying the transaction the creditor A/C is to be debited amount to Rs
accurate ans 540

True/False
ques. Market price may be treated as recent purchase price, realisable price or replacement price
accurate ans True

True/False
ques. Office and administration overheads consists of all overhead costs incurred from procurement of material till the stage of selling the final product.
accurate ans False

True/False
ques. Sold goods to Ajay on credit Rs 10,000/- Ajay account to be credited
accurate ans False

True/False
ques. Goods lost by fire firstly transfers to Trading Account credit side & corresponding amount is debited to P&L account.
accurate ans True

Multiple option Multiple ans
ques. A manufacturer uses 200 units of component every month and he buys them entirely from outside supplier. The order placing and receiving cost is Rs. 100 and annual carrying cost is Rs. 12. compute Ec
accurate ans 200 units

choose The Blank
ques. Due to compensating errors the ________ accuracy of the trial balance ________ affected
accurate ans arithmetical
accurate ans doesnot

choose The Blank
ques. Preventive costs of labour turnover are ________ and ________ .
accurate ans welfare activities
accurate ans medical services

Multiple option Multiple ans
ques. Basic 3 steps in Standard Costing are
accurate ans Setting standards , Comparing actuals with standards , Measurement of variance

True/False
ques. If the excess volume is already billed in the invoice, it will be approved and paid. If not Debit note may be issued to the supplier for amending the amount.
accurate ans False

Multiple option Single ans
ques. A proprietor purchase goods worth Rs. 5500 & cash account credited to Rs. 5000 rectification of the suspense accounted debited to Rs
accurate ans 500

Multiple option Single ans
ques. Depreciation charged on land & building, 1st debited to Profit & Loss A/C. and then to be ---------------------
accurate ans Deducted from land & building

choose The Blank
ques. One of the limitations of the budgetory control is that it ________.
accurate ans is an expensive affair

Multiple option Multiple ans
ques. Features of real account are . . .
accurate ans Mainly deals with items which are having physical , Consists of a few intangible assets , examples include - Lane, Building, Vehicles

choose The Blank
ques. A trading concern will have only ________ overheads and selling overheads.
accurate ans administration

choose The Blank
ques. ________ is an example of intangible asset.
accurate ans Goodwill

Multiple option Single ans
ques. Uniform costing system is useful in the subsequent areas
accurate ans Classification of cost accounts

Multiple option Single ans
ques. Mr.X has Rs.200,000/- invested in his business firm. He wants a 15% return on his money. From an analysis of latest cost figures, he obtains that his variable cost of operating is 60% of sales, his fixed costs are Rs.80,000/- per year. Mr.X estimates that even if he closed the doors of his business, he would incur Rs.25,000/- as expenses per year. At what sales would he be better off by locking his business up.
accurate ans Rs.62,500/-

Multiple option Single ans
ques. The budgeted level of activity of the production department of Style India Ltd. is 5,000 hours per period. From the provided info obtain the cost for 3,500 hours per period. Indirect wages Re.0.40 per hour;
accurate ans Rs.2,480/-

choose The Blank
ques. Normally, the planning for dividend payments and interest payments is based on the ________ budget.
accurate ans Cash

Multiple option Single ans
ques. The statement, mainly applicable to company form of organization, which discloses the manner in which the profit after tax is distributed is known as:
accurate ans Profit & Loss Account Appropriation Account

choose The Blank
ques. Generally, all real accounts will have a ________ balance
accurate ans Debit

Multiple option Single ans
ques. The option courses of action for an integrated textile mill are:
accurate ans Sell cloth

True/False
ques. The issue of multiple key factors can be solved with the help of techniques like linear programming, operations research, etc.
accurate ans True

True/False
ques. Fixed expenses will move up by jumps if the output exceeds the capacity.
accurate ans True

Multiple option Single ans
ques. Net book value of loose tools as on first April, 2003 was Rs.45,000/-. As on 31st March, 2004 the management felt that the real worth of these loose tools is only Rs.30,000/-. What can be done to achieve the desired reduction in the net book value of loose tools?
accurate ans By providing depreciation to the extent of Rs.15,000/-

Multiple option Multiple ans
ques. Cost control procedure deals with :
accurate ans Establishment of plans , Comparison of true and planed performance , calculation of variance

Match The subsequent
Question Correct ans

Tool-room expenses Direct labour hours

Power Horse power of machine

Stores department Number of material requisitions

Boiler house Cubic feet of steam supplied

Multiple option Single ans
ques. The subsequent data is extracted from the books of a manufacturing concern for the year 2003-04: Direct materials Rs.205,000/-; direct labour Rs.75,000/-; fixed overheads Rs.60,000/-; variable overheads Rs.100,000/- and sales Rs.500,000/-. compute the break even point if there is an increase of 10% in the fixed expenses.
accurate ans Rs.275,000/-

True/False
ques. Bank charges debited in the pass book represent clerical mistake on the part of the bank employees.
accurate ans False

Multiple option Single ans
ques. A worker completes a job in a certain number of hours. The standard time allowed for the job is 10 hours, and the hourly rate of wages is Rs.10/-. The worker earns at 50% rate a bonus of Rs.20/- under Halsey plan. obtain out his total earnings under the Rowan plan.
accurate ans Rs.84/-

Match The subsequent
Question Correct ans

Dividend paid Profit and loss appropriation account

Freight inwards Manufacturing account

Sales Trading account

Freight outwards Profit and loss account

Multiple option Single ans
ques. The credit sales are as follows : February Rs.180,00,000/-, March Rs.192,00,000/- and April Rs.108,00,000/-. 50% of credit sales are realised in the month subsequent the sale, 30% in the 2nd month subsequent the sale and the balance in the 3rd month f
accurate ans Rs.15,000,000/-

Multiple option Multiple ans
ques. The disadvantages of supplementary overhead rates are:
accurate ans It can be determined only after the end of the accounting period , Defeats the basic concept of normal cost , Involves lot of clerical activity

choose The Blank
ques. In the scheme of cost-________-profit analysis, an attempt is made to measure the variations of cost with quantity.
accurate ans volume

choose The Blank
ques. The ________ is of immense help in guiding the companies to operate their accounts on uniform basis.
accurate ans uniform cost manual

Multiple option Multiple ans
ques. The productive causes of idle time are :
accurate ans Instructions are not clearly provided , Power failures , Machine breakdown

Multiple option Multiple ans
ques. The factors which influence the selection of the method for absorption of overheads are:
accurate ans Type of industry , Nature of products , Manufacturing process

Match The subsequent
Question Correct ans

Emerson's efficiency bonus system
true hours X Hourly rate + Bonus percentage (Actual hours X Hourly rate)

Piece rate system Output X Wage rate per unit

Barth Premium system Hourly Rate X (square root of Standard Hours X true Hours)

Time rate system Attendance time X Hourly wage rate

Multiple option Single ans
ques. If the overhead expenditure to be absorbed is the foreman's salary, the most improper basis for absorption would be :
accurate ans Direct labour hours

True/False
ques. In case the standards are too difficult to achieve, they will give additional incentive for improvement.
accurate ans False

Multiple option Single ans
ques. Standard cost specification per unit of product : 20 labour hours per unit @ Rs.22/- per labour hour.Actual production and labour cost : true production 300 units; time used in production -5,500 hours; Idle time -600 hours; time paid for-6,100 hours, total wages paid -Rs.146,400/- . calculate Idle time variance.
accurate ans Rs.13,200/- (Adverse)

Multiple option Single ans
ques. Details of budgeted and true fixed overheads and output for the year 2004 are as follows : Budgeted fixed overheads -Rs.20,00,000/-; true fixed overheads -Rs.21,50,000/-; budgeted output - 40,000 units and true output- 45,000 units. calculate the per unit standard rate for fixed overheads.
accurate ans Rs.50/-

Multiple option Single ans
ques. In considering a special order situation that will enable a company to make use of presently idle capacity, which of the subsequent costs would be irrelevant?
accurate ans Depreciation

True/False
ques. Factory overheads consist of all overhead costs incurred from the stage of procurement of material till the production of finished goods.
accurate ans True

Multiple option Multiple ans
ques. The management of Dick Ltd. is deciding whether to buy component Y from the supplier, since the purchase cost is less than the manufacturing cost. State the non-financial aspects that must be considered before arriving at a decision.
accurate ans Reliability regarding quality of the material supplied by the supplier , option use of labour of engaged in manufacturing component Y , Regularity of material supplies from the supplier

True/False
ques. In marginal costing, decisions are guided by profit rather than contribution margin.
accurate ans False

Multiple option Single ans
ques. Select the factor which can prove to be a very crucial key factor in case of an oil refinary.
accurate ans Supply of crude oil

Multiple option Multiple ans
ques. The factors to be considered while preparing the direct materials budget are :
accurate ans Adequacy of material storing space , Availability of funds , Material in stores but reserved for specific purposes

choose The Blank
ques. Excess direct labour wages will be disclosed by 'Direct labour________ variance'.
accurate ans Rate

True/False
ques. The difference ranging from sales and margin of safety is equal to budgeted sales.
accurate ans False

choose The Blank
ques. A ________ note is prepared when excess material is returned to stores.
accurate ans Material returned

choose The Blank
ques. The systematic process of identifying and reporting variance is known as ________.
accurate ans Variance analysis

Match The subsequent
Question Correct ans

[( true sales - Break even sales) ]/ true sales Margin of safety as a percentage of true sales

Fixed cost / Contribution margin ratio Break even point

Fixed cost - (Sales X Profit quantity ratio) Profit

(Sales X Profit quantity ratio) -Fixed cost Loss

True/False
ques. Marginal costing rewards sales whereas absorption costing rewards production.
accurate ans True

choose The Blank
ques. Dividend received on amount invested in shares is an example of ________.
accurate ans non-operating income

Multiple option Single ans
ques. The store-keeper should initiate action for the purchase of a material, when it reaches its :
accurate ans Re-order level

choose The Blank
ques. Under-recovery of overheads implies that the profit will be________ to the extent of total under-recovered overheads.
accurate ans Increased

Multiple option Single ans
ques. Judge the statement in italics based on the criteria provided. On 31st March, 2004 Sita Enterprises sent goods worth Rs.30,000/- on approval basis to Mr.Ram. These goods should be included in the closing stock as on 31st March, 2004 because the ownership is still with the seller, viz.Sita Enterprise.
accurate ans The statement and the cause both are accurate

Multiple option Single ans
ques. Double entry system of accounting follows the principle of :
accurate ans Every debit has corresponding credit

Multiple option Single ans
ques. Where, in the final statements of accounts, should we disclosed the closing balance of income received in advance?
accurate ans Balance sheet - on the liability side

True/False
ques. Bank reconciliation statement must be prepared before the preparation of profit and loss account and balance sheet.
accurate ans True

True/False
ques. In differential cost analysis, decisions are taken by comparing the incremental revenue with differential costs.
accurate ans actual

True/False
ques. Due to compensating errors the arithmetical accuracy of the trial balance is affected.
accurate ans False

choose The Blank
ques. A worker is paid a monthly salary of Rs.500/- alongwith a bonus of 50 paise per unit completed, this kind of labour cost may be classified as ________ cost.
accurate ans Semi-variable

Multiple option Single ans
ques. Following data has been extracted from the records of a manufacturing company whose level of operations varies during various months. Minimum activtity : 30,000 machine hours and manufacturing overeheads Rs.400,000/-. Maximum activity : 80,000 machine hours and manufacturing overheads Rs.600,000/-. Determine the fixed and variable components of manufacturing overheads.
accurate ans Fixed overheads Rs.280,000/- and variable overheads Rs.4/- per machine hour

Multiple option Single ans
ques. You been informed that the carrying cost and ordering cost with best order size of 1,200 units is Rs.6,000/-. Unit cost of material is Rs.50/-. Annual storage cost per unit is 10% of the unit price of material. Ordering cost is Rs.240/- per order. Ascertain annual material requirement, assuming that at economic order volume the total storage cost is equal to the total ordering cost.
accurate ans 15,000 units

choose The Blank
ques. Graphically, fixed cost line will be ________ the 'x-axis'.
accurate ans Parallel to

choose The Blank
ques. ________ variance arises when the mix of materials used in the production is various from the predetermined standard mix of operation.
accurate ans Materials mix

True/False
ques. Standard costing is always accompanied by a system of budgeting but budgetary control may be operated in business where standard costing is impracticable.
accurate ans True

Multiple option Single ans
ques. Over which of the subsequent costs is the management likely to have lowest control?
accurate ans Buildings insurance cost

choose The Blank
ques. Loss of uninsured goods by fire was debited incorrectly to United India Assurance Company's account instead of debiting it to ________ account.
accurate ans Goods lost by fire

Multiple option Single ans
ques. The provided data pertains to the month of April : Budgeted : Fixed overheads Rs.10,000/-; output - 5,000 units; standard time for 1 unit - four hours. true : Fixed overheads -Rs.10,200/-; output - 5,200 units and true hours worked - 20,100 hours. compute fixed overhead cost variance.
accurate ans Rs.200/- (Favourable)

Multiple option Single ans
ques. Mr. Oak, materials manager, spends 40% time in the factory and the remaining in office. If his annual salary is Rs.500,000/-, what amount should be charged as office overheads?
accurate ans Rs.300,000/-

Multiple option Multiple ans
ques. choose the improper rectification entries for the subsequent transactions (i) Rs.200/- received in respect of a bad debt previously written off was credited to Debtors account. (ii) Paid Rs.6,000/- to a Mr. Rao, clerk, as salary in lieu of notice. This amount was debited to his personal account (iii) Interest @ 5% p.a. on a loan of Rs.5,000/- was debited to general expenses account.
accurate ans Rs.6,000/- to Rao's A/c Rs.6,000/- , Rs.250/- to General Expenses A/c Rs.250/- , Debtors A/c ..........Dr. Rs.200/- to bad debts recovered A/c Rs.200/-

choose The Blank
ques. Adjustment entries always have ________ effects.
accurate ans Two

Multiple option Single ans
ques. M/s Vivek Enterprises has paid rent relating to the residence of Mr. Vivek, proprietor of Vivek Enterprises. This payment should be treated as :-
accurate ans Drawings

choose The Blank
ques. The different contents of a uniform cost manual are organization, cost accounting system and ________.
accurate ans Presentation of info

Multiple option Multiple ans
ques. Which of the subsequent info is included in the goods received note?
accurate ans Date of receipt of material , volume received , Description of goods

Multiple option Single ans
ques. In the trial balance prepared on 31st March, 2004, the insurance premium account had a debit balance of Rs.12,865/-. This amount is the premium of the policy which expired on 29th February, 2004. The policy has been renewed from first March, 2004 but the premium is not yet paid. obtain the amount of insurance premium still payable as on 31st March, 2004.
accurate ans Rs.1,169.55

True/False
ques. All the properties owned by the business are collectively referred to as the assets of the business.
accurate ans actual

Multiple option Single ans
ques. Which system provides an opportunity to companies to adopt the 1 best method of cost accounting system known to the industry?
accurate ans Uniform costing

True/False
ques. Primary distribution is effected on the basis of service rendered to the service departments by the production departments.
accurate ans False

choose The Blank
ques. Creche expenses may be appropriately apportioned on the basis of ________.
accurate ans Number of female workers

True/False
ques. Debit Note is an intimation sent to person dealing with the business that his account is being credited for the purpose indicated therein.
accurate ans False

choose The Blank
ques. Factory cost of a product is Rs.335,000/-, if the selling overheads are charged @ 25% of factory cost, then the amount of selling overheads should be Rs.________/-
accurate ans 83750

Multiple option Single ans
ques. The subsequent info relating to material X and its standard use for production has been extracted from the standard cost card: Price of material X = Rs.5/- per litre; consumption of X = 10 litres per unit of product. Data relating to true material purchases and production during the period: Purchases of X = 4,000 litres; price paid for X =Rs.6/- per unit; true production = 500units. compute material usage variance.
accurate ans Rs.5,000/- (Favourable)

Multiple option Multiple ans
ques. The suspense account has a debit balance of Rs.40,000/-. choose the transactions which are capable of nullifying this balance.
accurate ans Conveyance expenses of Rs.25,000/- were posted on the wrong side of the account. , Purchased computer worth Rs.28,000/- was recorded in the ledger as , The total of the purchase book was cast short by Rs.44,000/-

Multiple option Multiple ans
ques. Items credited to Trading Account are :-
accurate ans Sales , Goods lost by fire , Closing stock

Multiple option Single ans
ques. As on 31st March, 2004, it was decided to write off Rs.800/- of debtors as bad debts. Also, provision for bad and doubtful debts is to be made @ 5% and for discount on debtors @ 4%. obtain the net amount of debtors to be disclosed in the balance sheet, if the total debtors before the aforesaid adjustments is Rs.98,623/-.
accurate ans Rs.89,214.58

choose The Blank
ques. If the time booked as per the job cards is less than the attendance time it shows ________ during which the worker has not done any work though he was current in the factory.
accurate ans Idle time

Multiple option Multiple ans
ques. The process of accounting has 3 streams of accounting ---------------,--------and ----------------------.
accurate ans Financial Accounting , Cost Accounting , Management Accounting

Multiple option Single ans
ques. choose the info to be considered before installing a costing system :-
accurate ans Labour intensity of the product

Multiple option Single ans
ques. The opening balance of cash account is Rs. 25,000/-, cash received from debtors Rs. 30,000/-, sold goods on cash basis amounting to Rs. 50,000/-, paid to creditors Rs. 20,000/-, purchase furniture Rs. 5000/-. What is the closing balance of the cash account?
accurate ans Rs. 80,000

Multiple option Single ans
ques. The installation and operation of ___________ accounting requires a very what are organizational structure and large number of rules & regulations
accurate ans Management


TO BE ANSWERED: (You can reply to me if you get the answers so that I can update the same)

Where break even sales are Rs. 20000,fixed cost is Rs.10000and profit is Rs. 5000 then the margin of safety will be Rs.
10000
1500
15000
2000

evaluation of material uses the subsequent methods
FIFO and LIFO
avg. price method
Market price
Special price

Goods distributed as free samples transfer to debit side of trading A/C .
actual / False

In Citizen Ltd., Division X is a profit centre which produces 3 products, A, B and C. The details are as follows : External market price per unit:-Product A- Rs.48/-, Product B- Rs.46/-, Product C-Rs.40/-. Maximum external sales(units):-Product A- 800, Product B-500, Product C-300. Variable cost per unit:-Product A- Rs.33/-, Product B- Rs.24/-, Product C-Rs.28/-.
A-800 units; B-500 units; C-300 units
A-800 units; B-250 units; C-200 units
A-400 units; B-500 units; C-300 units
A-400 units; B-800 units; C-300 units

XYZ Ltd. has set up the subsequent standards for variable production overheads : standard hours per unit -3 hours; standard variable overhead per hour -Rs.10/-. The true data for the month is as follows : true variable overheads incurred Rs.620,000/-; true output -20,000 units and true hours worked- 54,000 hours. obtain variable overheads cost variance.
Rs.20,000/- (Adverse)
Rs.20,000/- (Favourable)
Rs.60,000/- (Adverse)
Rs.60,000/- (Favourable

A firm is able to break even at 60% capacity with budgeted fixed cost of Rs.300,000/-, budgeted selling price Rs.20/- per unit and budgeted contribution Rs.6/- per unit. The firm can produce and sell at 90% capacity but it is estimated that in that case
Rs.88,500/-
Rs.75,000/-
Rs.82,500/-
Rs.72,500/-
The annual variable production overheads of a factory are Rs.70,000/-. The production manager anticipates that in the next year, the production efficiency will reduce by 4%. obtain out budgeted production overheads for the next year.
Rs.72,800/-
Rs.78,200/-
Rs.72,916.67
Rs.79,216.67

XYZ & Co. is a partnership with X and Z as partners. The capital of X is Rs.58,000/- and that of Z is Rs.75,000/-. Interest on capital is charged @ 12% p.a. and interest on drawings is charged @ 5% p.a. The drawings of X totaled to Rs.15,000/- and that of Z totaled to Rs.12,000/-. The profit for the year after considering interest on capital and drawings is Rs.125,000/- and the profits are shared in the ratio of their capitals, i.e. 58 : 75. obtain the balance of capital accounts after giving
X - Rs.118,721.28 and Z -Rs.153,888.72
X - Rs.120,221.28 And Z - Rs.155,088.72
X - Rs.119,471.28 And Z - Rs.154,488.72
X - Rs.135,448.28 And Z - Rs.138,511.72

Factory rent is a direct cost to the factory as a whole but indirect to the production departments.
actual / False

The wages paid to a trainee who constructs wooden mould for concrete laying on a building contract should be described as :
Direct labour cost
Indirect labour cost
Fixed labour cost
Non-controllable labour cost

The subsequent info relating to material X and its standard use for production has been extracted from the standard cost card: Price of material X = Rs.5/- per litre; consumptiion of X = 10 litres per unti of product.Data relating to true material purchases and production during the period: Purchases of X = 4,000 litres; price paid for X =Rs.6/- per unit; true production = 500units. compute material usage variance.
Rs.1,000/- (Favourable)
Rs.4,000/- (Adverse)
Rs.5,000/- (Favourable)
Rs.3,000/- (Adverse)

The subsequent particulars are extracted from the books of a company relating to commodity "A" for the half year ending 30th June, 2004. (a) Purchase of raw materials - Rs.1,32,000/- (b) Direct wages - Rs.1,10,000/- (c) Rent, rates and insurance - Rs.44,000/- (d) Carriage inwards - Rs.1,584/- (e) Raw material as on first Jan, 2004 - Rs.22,000/- (f) Finished goods as on first Jan, 2004 - Rs.17,000/- (1600 tonnes) (g) Raw Material as on 30th June, 2004 - Rs.24,464/- (h) Finished goods as on 30th June,
Rs.64,800/-
Rs.46,800/-
Rs.86,400/-
Rs.68,400/-

Annual maintenance of Rs.28,000/- was paid on 15th June, 2003 for a period of 1 year therefrom. obtain the amount of prepaid maitenance expenditure for the year ended 31st March.
Rs.28,000/-
Rs.22,167/-
Rs.7,000/-
Rs.5,833/

The Balance Sheet method of cash budget ignores any excess or shortage of cash during the budget period.
actual / False

Compound journal entry avoids duplication of effort.
actual / False

Metal India Ltd. is holding 2 accounts, savings and current, with the Central Bank of India. On 31st January, 2004 his ledger indicates the subsequent balances : Savings account Rs.5,000/-; Current accountRs.2,250/- (overdraft). It is obtained that a deposit of Rs.1,500/- made into the savings account on 20th January, 2004 has been entered in the ledger in the of Current account. obtain the accurate ledger balances of savings and current accounts.
Savings account-Rs.5,000/-, current account-Rs.3,750/- (overdraft
Savings account-Rs.5,000/-, current account-Rs.2,250/- (overdraft)
Savings account-Rs.6,500/-, current account-Rs.2,250/- (overdraft)
Savings account-Rs.6,500/-, current account-Rs.3,750/- (overdraft)

Which of the subsequent source documetns in a cost accounting system is designed to exercise control voer the delivery of and right recording of the receipts of goods?
Goods received note
Order to the supplier
Material requisition note
Purchase requisition slip

choose the cases where convention of conservation is applied :
Closing stock is valued at cost or market price whichever is lower
Providing for discount on debtors
Amorisation of goodwill (goodwill being written off to Profit and Loss Account)
Providing for discount on creditors

M Ltd. manufactures 3 products P, Q and R. The unit selling price of these products are Rs.100/-, Rs.80/- and Rs.50/-, respectively. The corresponding unit variable costs are Rs.50/-, Rs.40/- and Rs.20/-, respectively. The quantitywise proportion in which these products are manufactured and sold are 20%, 30% and 50%, respectively. The total fixed costs are Rs.14,80,000/-. You are needed to work out the overall break even point qunatity for
30,000 units
90,000 units
40,000 units
80,000 units

A firm is earning a profit of Rs.60,000/- at the current sales level of Rs.500,000/-. It has a profit quantity ration of 60%, which remains unchanged. Fixed cost increases by 25% as soon as sales become twice the break even point. obtain the profit for sal
Rs.240,000/-
Rs.180,000/-
Rs.120,000/-
Rs.200,000/-

At a break even point of 400 units, the variable costs are Rs.400/- and the fixed costs are Rs.200/-. What will the 401st unit sold contribute to profit?
Re.0
Re.0.50
Re.1.00
Rs.1.50

1. Advantage of budgetary control system 1. Motivates the managers to exceed the budgeted targets

2. Fixed budget 2. Managerial tool which reduces effectiveness of managerial control

3. Disadvantage of budgetary control system 3. More elastic and practical

4. Flexible budget 4. Difficult to implement in fast changing industrial scenario

5. Restricts the efforts of the managers to the budgeted targets

6. Managerial tool which increases effectiveness of managerial control

With the help of the provided information, obtain true fixed overheads for true output. Fixed overheads quantity variance -Rs.75,000/- (Favourable); fixed overheads efficiency variance -Rs.95,000/- (Favourable); fixed overheads calendar variance Rs.20,000/- (Adverse); fixed voerheads expenditure variance Rs.100,000/- (Adverse) and standard fixed overheads for true output -Rs.575,000/-.
Rs.600,000/-
Rs.550,000/-
Rs.525,000/-
Rs.625,000/-

Existing sales are Rs.100,000/- (500 units), variable costs are Rs.60,000/-, fixed costs are Rs.24,000/-. If selling price is decreased by 10% which of the subsequent is the breakeven sales quantity?
450 units
500 units
400 units
334 units

An operator engaged in machining certain components receives andordinary day rate of Rs.160/- per day of eight hours. The standard output for machining the components has been fixed at 80 pieces per hour (time fixed for premium bonus). On a certain day, the output of the worker on this machine is 800 pieces. obtain the labour cost per 100 pieces if a bonus of Rs.25/- is paid per 100 pieces of the extra output.
Rs.25/-
Rs.20/-
Rs.15/-
Rs.10/-

Under the accelerating premium system incentive increases at a fast rate with the reduce in output.
actual /False

A manufacturer is producing alloy for which standard mix is 25% copper and 75% iron. Standard price for copper is Rs.80/- per kg. and for iron Rs.20/- per kg. 20% of input is standard loss. true output is 8,000 kg. of alloy using 2,000 kg of copper at Rs.90/- per kg. and 9,000 kg of iron at Rs.15/- per kg. compute the standard cost of copper.
Rs.200,000/-
Rs.150,000/-
Rs.350,000/-
Rs.180,000/-

Sold goods to Amitabh worth Rs. 15,000/- against 15% trade discount. In this case with what amount should the sales account be credited?
Rs. 15,000
Rs. 12,750
Rs. 13,500
Rs. 13,750

Material Yield variance -Rs.1,000/- (Adverse); material mix variance -Rs.250/- (Favourable) and material price variance - Rs.350/- (Favourable). obtain material cost variance and material usage variance.
Material cost variance -Rs.400/- (Adverse)
Material usage variance -Rs.750/-
Material usage variance is favourable
Material usage variance is adverse

Insurance premium of Rs.18,000/- was paid on 15th January, 2004. The policy period is 1 year from the date of payment of insurance. On 31st March, 2004 what amount should be debited to the Profit and Loss account as expenditure on account of insurance premium?
Rs.18,000/-
Rs.14,250/-
Rs.10,500/-
Rs.3,750/-

The standard cost of true hours when any employee remains idle due to abnormal circumstances is known as Standard labour cost / Idle time variance / Labour cost variance / Standard cost.

Keeping company's liquid position sufficiently sound to meet its daily obligation is the main object of preparing Cash Sales / Income / Expenditure / budget.

One of the major drawback of the contribution approach to costing is that it ignores fixed cost.
actual / False

Salary provided in trial balance Rs. 5000/-, and Rs. 2,000/- is yet to be paid . The outstanding salary account will be disclosed in the …
Profit and Loss Account - credit side
Balance Sheet - liability side
Balance Sheet - asset side
Trading Account - debit side

A withdrawal of Rs.500/- from Mr.Jone's account on second October, 2004 has been entered by the bank in the pass book of Mr.Johny's account.' If you are preparing the bank reconciliation statement considering the balance as per pass book as on 31st October,2004 is Rs.2,250/- for Mr.Johny, obtain out the balance as per his bank book.
Rs.1,750/- (overdraft)
Rs.1,750/- (debit)
Rs.2,250/- (overdraft)
Rs.2,250/- (debit)

What will be the impact of subsequent transactions on the cost of a lathe machine : (a) Transport charges on the lathe machine were debited to Carriage inward account, Rs.1,100/- (b) Cost of installing the machine stands debited to miscellaneous expenses account, Rs.200/-
Cost will increase by Rs.900/-
Cost will increase by Rs.1,300/-
Cost will reduce by Rs.1,300/-
Cost will reduce by Rs.900/-

From the subsequent particulars, compute the machine hour rate of overhead absorption. A company has 3 production departments and 2 service departments. The overhead analysis sheet provides the subsequent totals of the overheads analysed to production and service departments. Production Departments :X- Rs.48,000; Y-Rs.42,000; Z-Rs.30,000.Service Departments : A-Rs.14,040; B-Rs.18,000. The expenses of the service departments are apportioned as follows : Service department A - Production department X-20%; Production department Y - 40%; Production department Z- 30%; Service department B - 10%.Service department B- Production department X-40%; Production department Y - 20%; production department Z- 20%; Service department A - 20%. Details of machine hours are as follows: Production department X -1,000 hours; Production department Y-1,000 hours; Production department Z-1,000 hours.
X - Rs.5.316, Y - Rs.5.952 and Z - Rs.3.936
X - Rs.5.952, Y - Rs.3.936 and Z - Rs.5.316
X - Rs.5.952, Y - Rs.5.316 and Z - Rs.3.936
X - Rs.5.316, Y - Rs.3.936 and Z - Rs.5.952

From the provided info calculate the total cost variance. Material cost variance -Rs.4,400/- (Favourable); labour cost variance -Rs.450/- (Adverse); fixed overhead cost variance -Rs.22,000/- (Adverse); variable overhead cost variance -Rs.6,000/- (adverse).
Rs.32,850/- (Adverse)
Rs.32,850/- (Favourable)
Rs.24,050/- (Adverse)
Rs.24,050/- (Favourable)

Judge the provided statement according to the provided criteria :- 'Provision for doubtful debts account' and 'provision for discount on debtors account' mean identical account can be maintained under 2 account-heads, since both are related to debtors and indicate a loss to the organization.
The statement and the cause both are accurate
The statement and the cause both are incorrect
The statement is accurate but the cause is incorrect
The statement is incorrect but the cause is accurate

1. Ordering cost 1. Cost of holding the inventory
2. Carrying cost 2. Cost of issuing the inventory
3. Material cost 3. Cost of administrative efforts
4. Cost of material consumed 4. Can be found subtracting opening stock from the sum of material cost and closing stock
5. Can be found subtracting closing stock from the sum of material cost and opening stock
6. Sum of possession cost, ordering cost and purchase cost

The pass book showed a credit balance of Rs.1,000/-. This balance was after considering the dividend of Rs.25/- collected by bank and Rs.5/- charged as collection expenses: these entries are not made in the bank book. obtain the balance as per bank book.
Rs.1,000/-
Rs.1,030/-
Rs.1,020/-
Rs.980/-

calculate fixed overheads calendar variance when fixed overhead quantity variance is Rs.250/- (Favourable); fixed overheads efficiency variance is Rs.2,150/- (Adverse) and fixed overheads capacity variance is Rs.800/-(Favourable).
Rs.1,100/- (Adverse)
Rs.1,100/- (Favourable)
Rs.1,600/- (Adverse)
Rs.1,600/- (Favourable)

Routing the purchase requisition through the purchase department entails unnecessary delay in receiving the needed materials.
actual /False

Large angle of incidence indicates Lower /Adjusted /Higher /Same amount of profits.

The method of overhead apportionment which considers both the material cost as well as the labour cost, is known as Supplementary rate /Prime cost percentage rate /Direct labour hour rate /Machine hour rate method.

Standard labour cost of producing 500 metre of cloth has been specified as 20 hours work by skilled workers @ Rs.15/- per hour and 30 hours work by unskilled workers @ Rs.10/- per hour. For producing 500 metre cloth they worked for 30 hours every they were paid at the rate of Rs.17/- per hour and Rs.10/- per hour, respectively. compute labour mix variance.
Rs.210/- (Adverse)
Rs.60/- (Adverse)
Rs.150/- (Adverse)
Rs.30/- (Adverse)

In a factory Ram and Shyam produce the identical product using the identical input of identical material and at the identical normal wage rate. Bonus is paid to both of them in the form of normal time wage rate adjusted by the proportion which time save bears to the standard time for the completion of the product. The time allotted to the product is fifty hours. Ram takes thirty hours and Shyam takes forty hours to produce the product. The factory cost of the product for Ram is Rs.3,100/- and for Shyam is Rs.3,280/-. The factory overhead rate is Rs.12/- per hour. compute the cost of material used for the product, for every worker, Ram and Shyam.
Rs.3,000/-
Rs.2,000/-
Rs.3,320/-
Rs.2,320/-

Provision for discount on debtors account should be credited to the Profit and Loss Account.
actual /False

Consideration to the fact that the repairs and maintenance cost is less in the initial years of life of the asset and hence needs to be counterbalanced by higher amount of depreciation in the :-
Straight line method
Written down value method
Endowment policy method
Sinking fund method

The subsequent data is available for a company for the month of April, 2004 : Territory I : selling expenses Rs.7,600/-; distribution cost Rs.4,000/-; number of units sold -16,000; sales Rs.76,000/-. Territory II : selling expenses Rs.4,200/-; distribution cost Rs.1,800/-; number of units sold -6,000; sales Rs.28,000/-. Territory III : selling expenses Rs.6,240/-; distribution cost Rs.2,000/-; number of units sold -10,000; sales Rs.52,000/-. The company adopts sales basis and volume basis for application of selling and distribution costs respectively. calculate the amount of selling and distribution costs chargeable to a consignment of 4,000 units of a product sold in every territory at Rs.2.50 per unit.
Territory I -Rs.2,000/-; Territory II -Rs.2,000/- and Territory III -Rs.2,000/-
Territory I -Rs.2,700/-; Territory II -Rs.2,700/- and Territory III -Rs.2,700/-
Territory I -Rs.2,700/-; Territory II -Rs.2,700/- and Territory III -Rs.2,000/-
Territory I -Rs.2,000/-; Territory II -Rs.2,700/- and Territory III -Rs.2,000/-

SRR Ltd. producing a single product, sells it at Rs.50/- per unit. Unit variable cost is Rs.35/- and fixed costs amounts to Rs.12,00,000/- per annum. compute the increase in sales needed if profits are to be increased by Rs.2.4 lakhs
Rs.880,000/-
Rs.800,000/-
Rs.600,000/-
Rs.660,000/-

Re-order level should be higher than Monthly requirement /Average stock level /Annual requirement /Minimum level but lesser than maximum stock level.

What is the balance of the cash account after considering the relevant transactions from the subsequent set : fourth July, 2004-Sold goods to Deshmukh & Co. for Rs.2,500/-; fifth July, 2004-Received Rs.5,000/- for rent of June, 04; seventh July, 2004-Paid salaries by cheque for Rs.8,000/-; 15th July, 2004-Received commission, in cash, from XYZ Ltd., Rs.3,000/-; 21st July, 2004-Paid salaries by cash Rs.2,500/-; 22nd July, 2004-Deposited cash into Bank of India Rs.3,000/-; 25th July, 2004-Purchased furniture from Shantilal for Rs.10,000/-. Shantilal has provided a credit period of 45 days; 26th July, 2004-Paid cash for purchase of machine from Elpro Ltd. For Rs.30,000/-; 28th July, 2004-Paid ready cash for advertisement inserted in newspaper, Rs.200/-; 28th July, 2004-Withdrawn cash from Bank of India Rs.50,000/-.
Rs.22,300 (debit)
Rs.22,300 (credit)
Rs.33,200 (debit)
Rs.33,200 (credit)

Factory cost is Rs.13,10,800/-. The administrative overheads are salaries Rs.40,000/-, rent and rates Rs.6,400/-, traveling expenses Rs.12,400/-, Depreciation Rs,2,400/-, Directors fees Rs.24,000/-, General Charges Rs.24,800/-, Manager's salary Rs.38,400/-. What will be the office cost?
Rs.14,59,200/-
Rs.11,72,200/-
Rs.13,10,800/-
Rs.15,10,800/-

XYZ Ltd. has set up the subsequent standards for variable production overheads : standard hours per unit -3 hours; standard variable overhead per hour -Rs.10/-. The true data for the month is as follows : true variable overheads incurred Rs.620,000/-; true output -20,000 units and true hours worked- 54,000 hours. obtain variable overheads cost variance.
Rs.20,000/- (Adverse)
Rs.20,000/- (Favourable)
Rs.60,000/- (Adverse)
Rs.60,000/- (Favourable)

The concept of marginal costing is based on the important distinction ranging from product costs and Indirect /Direct /Variable /Period costs.

Currently Beta Ltd. is earning a contribution of Rs.80/- per unit and the variable cost is Rs.180/- per unit. Its fixed costs are Rs.200,000/-. Its existing sales are 5,000 units. The company has a proposal that the sales staff may be paid a commission of 10% of sales instead of fixed salaries totaling Rs.80,000/-. This action is expected to increase the sales by 10%. calculate the amount of profit assuming the proposal is accepted?
Rs.177,000/-
Rs.200,000/-
Rs.178,000/-
Rs.277,000/-

A company has a normal capacity of 120 machines, working eight hours per day of 25 days in a month. The fixed overheads are budgeted at Rs.144,000/- per month. The standard time needed to manufacture 1 unit of product is four hours. In April, 2004, the company worked 24 days of 840 machine hours per day and produced 5,305 units of output. The true fixed overheads were Rs.142,000/-. calculate calendar variance.
Rs.6,360/- (Favourable)
Rs.17,280/- (Adverse)
Rs.5,760/- (Adverse)
Rs.16,680/- (Adverse)


Industries which have high fixed cost burden but low variable cost have Narrow /Smaller /Larger /Flat angle of incidence.

Special aspects of co-partnership include:-
Workers are granted ownership rights
Indirect monetary remuneration
The morale of the workers is increased
The workers are rewarded for individual efficiency

The credit purchases are as follows : July Rs.80,000/- and August Rs.140,000/-. Creditors are paid either on a 'prompt basis' (on the spot) or 30 days basis. It is estimated that 10% of the creditors are in the prompt category. obtain the amount paid :-
Rs.161,000/-
Rs.121,000/-
Rs.177,000/-
Rs.118,000/-

The use of contribution per unit of limiting factor as the basis for ranking products to be produced and sold is aimed at which of the following?
Maximization of turnover
Minimization of turnover
Maximization of short-term profit
Maximization of long-term profit

Obsolescence arises when a machine has to be discarded in favour of 1 better adopted to its purpose and giving better outcome.
actual /False

A manufacturing unit produces electronic circuits at the rate of six pieces an hour. The unit works in single shift of eight hours during a six-day week and remains close for 18 days a year on account of holidays. avg. idle hours per month is 20 for cleaning and maintenance of equipments. Against an avg. annual output of 12,000 pieces during last ten years, the true output achieved during the year was 10,800 pieces. The fixed overheads for the year amounted to Rs.540,000/-. You are needed to compute the idle capacity costs on the assumption that overhead recovery rate is based on maximum capacity.
Rs.207,121.60
Rs.200,000/-
Rs.193,121.60
Rs.187,000/-

Earning:   Approval pending.