Question No: 1 ( Marks: 1 ) - Please choose one
All of the following indicate the problems in traditional budget
EXCEPT:
► Programmes and activities involving wasteful expenditure are
identified, resulting in unavoidable financial and other costs
► Inefficiencies of a prior year are carried forward in
determining subsequent years’ levels of performance
► Managers are not encouraged to identify and evaluate
alternate means of accomplishing the same objective
► Decision-making is irrational in the absence of rigorous
analysis of all proposed costs and benefits
Question No: 2 ( Marks: 1 ) - Please choose one
A forecast set of final accounts is also known as:
► Cash budget
► Capital budget
► Master budget
► Sales budget
Question No: 3 ( Marks: 1 ) - Please choose one
Brutus Company manufactures glass bottles. The company expects to
sell 500,000 bottles next year. The budgeted ending inventory this
year is 15,000 bottles and the desired ending inventory for next year
is 12,000 bottles. It takes 5 pounds of sand to produce one bottle.
The ending inventory of sand this year is expected to be 200,000
pounds, and the desired ending inventory next year is 100,000 pounds.
The amount of direct material purchases is expected to be:
► 2,385,000 pounds
► 2,465,000 pounds
► 2,585,000 pounds
► 2,600,000 pounds
Question No: 4 ( Marks: 1 ) - Please choose one
BDH produced 30,500 units of Kisty (a product). Each unit of Kisty
takes two units of component L. Component L is budgeted to cost Rs. 12
per unit. Current inventory of L is 4,000 units. BDH wants 6,000 units
of L on hand at the end of the next year. How much will the direct
materials budget show as the cost of materials to be purchased?
► Rs. 756,000
► Rs. 390,000
► Rs. 684,000
► Rs. 330,000
Question No: 5 ( Marks: 1 ) - Please choose one
Railway Product Ltd makes one product that sells for Rs. 72 per unit.
Fixed costs are Rs. 81,000 per month & the product has a contribution
to sales ratio of 37.5%. In a period when actual sales were Rs.
684,000 the company's unit margin of safety was:
► 4,000 units
► 4,800 units
► 5,500 units
► 6,500 units
Question No: 6 ( Marks: 1 ) - Please choose one
A company decreased the selling price for its product from Rs. 2.00
to Rs. 1.75 per unit when total fixed costs decreased from Rs. 500,000
to Rs. 400,000 and variable cost per unit of Rs. 1 remained unchanged.
How would these changes affect the break-even point?
► The break-even point in units would be increased
► The break-even point in units would be decreased
► The break-even point in units would remain unchanged
► The effect cannot be determined from the information given
Question No: 7 ( Marks: 1 ) - Please choose one
The total cost of the beginning inventory was Rs. 60,000. During the
month, 50,000 units were transferred out. The equivalent unit cost was
computed to be Rs. 4.00 for materials and Rs. 7.40 for conversion
costs under the weighted-average method.
With the help of given information, what was the total cost of the
units completed and transferred out during the month.
► Rs. 480,000
► Rs. 570,000
► Rs. 540,000
► Rs. 510,000
Question No: 8 ( Marks: 1 ) - Please choose one
The average cost method of process costing has an advantage when
compared to the FIFO method relative to simplicity because under the
average method:
► It provides that units started within the current period are
valued at the current period cost
► The costs in the beginning inventory in a processing
department maintain their separate identity
► The identity of the beginning units in process is typically
maintained when they are transferred to the next department
► All units completed during the period will be assigned the
same unit cost
Question No: 9 ( Marks: 1 ) - Please choose one
Assuming no returns outwards or carriage inwards, the cost of goods
sold will be equal to:
► Opening stock Less purchases plus closing stock
► Closing stock plus purchases plus opening stock
► Sales less gross profit
► Purchases plus closing stock plus opening stock plus direct
labor
Question No: 10 ( Marks: 1 ) - Please choose one
“Taking steps for the fresh purchase of those stocks which have been
exhausted and for which requisitions are to be honored in future” is
an easy explanation of:
► Over stocking
► Under stocking
► Replenishment of stock
► Acquisition of stock
Question No: 11 ( Marks: 1 ) - Please choose one
Which of the following would be the effect, if inventory is not
properly measured?
► Expenses and revenues cannot be properly matched
► Unfair position in Financial Statements
► Inventory items show under or over stocking
► All of the given options
Question No: 12 ( Marks: 1 ) - Please choose one
While calculating the EOQ, carrying cost is taken as the:
► %age of unit cost
► %age of ordering cost
► %age of annual required units
► Total unit cost
Question No: 13 ( Marks: 1 ) - Please choose one
Payroll includes:
► Salaries & Wages of direct labor
► Salaries & Wages of Indirect labor
► Salaries & Wages of Administrative
► Salaries & Wages of direct labor, Indirect labor, and
Administrative
Question No: 14 ( Marks: 1 ) - Please choose one
Increased cost of production due to high labor turnover is a result
of which of the following factor?
► Interruption of production
► Coordination between new and old employee to produce more
► Increased production due to newly motivated employees
► Decrease losses as new employees will be more concerned
towards output
Question No: 15 ( Marks: 1 ) - Please choose one
The Process of cost apportionment is carried out so that:
► Cost may be controlled
► Cost unit gather overheads as they pass through cost centers
► Whole items of cost can be charged to cost centers
► Common costs are shared among cost centers
Question No: 16 ( Marks: 1 ) - Please choose one
When a manufacturing Company has highly automated manufacturing plant
producing many different products, the most appropriate basis for
applying FOH cost to work in process is:
► Direct labor hours
► Direct labor costs
► Machine hours
► Cost of material used
Question No: 17 ( Marks: 1 ) - Please choose one
Which of the following industries would most likely use a Process
cost Accounting system?
► Construction
► Beer
► Hospitality
► Consulting
Question No: 18 ( Marks: 1 ) - Please choose one
Which of the following loss is not included as part of the cost of
transferred or finished goods, but rather treated as a period cost?
► Operating loss
► Abnormal loss
► Normal loss
► Non-operating loss
Question No: 19 ( Marks: 1 ) - Please choose one
A company produces two chemicals in a joint process. Chemical A can
be sold at split off while chemical B currently cost Rs. 2 per gallon
for disposal. If chemical B is further processed, it would cost Rs. 5
per gallon. At what sales price would the company be in different
between disposing of chemical B at split off and further processing
the chemical?
► Rs.3
► Rs.5
► Rs.4
► Rs.7
Question No: 20 ( Marks: 1 ) - Please choose one
Variable costing is also known as:
► Direct Costing
► Marginal Costing
► Both Direct Costing & Marginal Costing
► Indirect Costing
All of the following indicate the problems in traditional budget
EXCEPT:
► Programmes and activities involving wasteful expenditure are
identified, resulting in unavoidable financial and other costs
► Inefficiencies of a prior year are carried forward in
determining subsequent years’ levels of performance
► Managers are not encouraged to identify and evaluate
alternate means of accomplishing the same objective
► Decision-making is irrational in the absence of rigorous
analysis of all proposed costs and benefits
Question No: 2 ( Marks: 1 ) - Please choose one
A forecast set of final accounts is also known as:
► Cash budget
► Capital budget
► Master budget
► Sales budget
Question No: 3 ( Marks: 1 ) - Please choose one
Brutus Company manufactures glass bottles. The company expects to
sell 500,000 bottles next year. The budgeted ending inventory this
year is 15,000 bottles and the desired ending inventory for next year
is 12,000 bottles. It takes 5 pounds of sand to produce one bottle.
The ending inventory of sand this year is expected to be 200,000
pounds, and the desired ending inventory next year is 100,000 pounds.
The amount of direct material purchases is expected to be:
► 2,385,000 pounds
► 2,465,000 pounds
► 2,585,000 pounds
► 2,600,000 pounds
Question No: 4 ( Marks: 1 ) - Please choose one
BDH produced 30,500 units of Kisty (a product). Each unit of Kisty
takes two units of component L. Component L is budgeted to cost Rs. 12
per unit. Current inventory of L is 4,000 units. BDH wants 6,000 units
of L on hand at the end of the next year. How much will the direct
materials budget show as the cost of materials to be purchased?
► Rs. 756,000
► Rs. 390,000
► Rs. 684,000
► Rs. 330,000
Question No: 5 ( Marks: 1 ) - Please choose one
Railway Product Ltd makes one product that sells for Rs. 72 per unit.
Fixed costs are Rs. 81,000 per month & the product has a contribution
to sales ratio of 37.5%. In a period when actual sales were Rs.
684,000 the company's unit margin of safety was:
► 4,000 units
► 4,800 units
► 5,500 units
► 6,500 units
Question No: 6 ( Marks: 1 ) - Please choose one
A company decreased the selling price for its product from Rs. 2.00
to Rs. 1.75 per unit when total fixed costs decreased from Rs. 500,000
to Rs. 400,000 and variable cost per unit of Rs. 1 remained unchanged.
How would these changes affect the break-even point?
► The break-even point in units would be increased
► The break-even point in units would be decreased
► The break-even point in units would remain unchanged
► The effect cannot be determined from the information given
Question No: 7 ( Marks: 1 ) - Please choose one
The total cost of the beginning inventory was Rs. 60,000. During the
month, 50,000 units were transferred out. The equivalent unit cost was
computed to be Rs. 4.00 for materials and Rs. 7.40 for conversion
costs under the weighted-average method.
With the help of given information, what was the total cost of the
units completed and transferred out during the month.
► Rs. 480,000
► Rs. 570,000
► Rs. 540,000
► Rs. 510,000
Question No: 8 ( Marks: 1 ) - Please choose one
The average cost method of process costing has an advantage when
compared to the FIFO method relative to simplicity because under the
average method:
► It provides that units started within the current period are
valued at the current period cost
► The costs in the beginning inventory in a processing
department maintain their separate identity
► The identity of the beginning units in process is typically
maintained when they are transferred to the next department
► All units completed during the period will be assigned the
same unit cost
Question No: 9 ( Marks: 1 ) - Please choose one
Assuming no returns outwards or carriage inwards, the cost of goods
sold will be equal to:
► Opening stock Less purchases plus closing stock
► Closing stock plus purchases plus opening stock
► Sales less gross profit
► Purchases plus closing stock plus opening stock plus direct
labor
Question No: 10 ( Marks: 1 ) - Please choose one
“Taking steps for the fresh purchase of those stocks which have been
exhausted and for which requisitions are to be honored in future” is
an easy explanation of:
► Over stocking
► Under stocking
► Replenishment of stock
► Acquisition of stock
Question No: 11 ( Marks: 1 ) - Please choose one
Which of the following would be the effect, if inventory is not
properly measured?
► Expenses and revenues cannot be properly matched
► Unfair position in Financial Statements
► Inventory items show under or over stocking
► All of the given options
Question No: 12 ( Marks: 1 ) - Please choose one
While calculating the EOQ, carrying cost is taken as the:
► %age of unit cost
► %age of ordering cost
► %age of annual required units
► Total unit cost
Question No: 13 ( Marks: 1 ) - Please choose one
Payroll includes:
► Salaries & Wages of direct labor
► Salaries & Wages of Indirect labor
► Salaries & Wages of Administrative
► Salaries & Wages of direct labor, Indirect labor, and
Administrative
Question No: 14 ( Marks: 1 ) - Please choose one
Increased cost of production due to high labor turnover is a result
of which of the following factor?
► Interruption of production
► Coordination between new and old employee to produce more
► Increased production due to newly motivated employees
► Decrease losses as new employees will be more concerned
towards output
Question No: 15 ( Marks: 1 ) - Please choose one
The Process of cost apportionment is carried out so that:
► Cost may be controlled
► Cost unit gather overheads as they pass through cost centers
► Whole items of cost can be charged to cost centers
► Common costs are shared among cost centers
Question No: 16 ( Marks: 1 ) - Please choose one
When a manufacturing Company has highly automated manufacturing plant
producing many different products, the most appropriate basis for
applying FOH cost to work in process is:
► Direct labor hours
► Direct labor costs
► Machine hours
► Cost of material used
Question No: 17 ( Marks: 1 ) - Please choose one
Which of the following industries would most likely use a Process
cost Accounting system?
► Construction
► Beer
► Hospitality
► Consulting
Question No: 18 ( Marks: 1 ) - Please choose one
Which of the following loss is not included as part of the cost of
transferred or finished goods, but rather treated as a period cost?
► Operating loss
► Abnormal loss
► Normal loss
► Non-operating loss
Question No: 19 ( Marks: 1 ) - Please choose one
A company produces two chemicals in a joint process. Chemical A can
be sold at split off while chemical B currently cost Rs. 2 per gallon
for disposal. If chemical B is further processed, it would cost Rs. 5
per gallon. At what sales price would the company be in different
between disposing of chemical B at split off and further processing
the chemical?
► Rs.3
► Rs.5
► Rs.4
► Rs.7
Question No: 20 ( Marks: 1 ) - Please choose one
Variable costing is also known as:
► Direct Costing
► Marginal Costing
► Both Direct Costing & Marginal Costing
► Indirect Costing
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