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Question No: 1 ( Marks: 1 ) - Please choose one
Being one’s own boss is a need of:

► Independence
► Achievement
► Affiliation
► Authority

Question No: 2 ( Marks: 1 ) - Please choose one
With a commercial history of only 300 years, which country was a new comer to the international arena?

► Japan
► U.S
► China
► U.K

Question No: 3 ( Marks: 1 ) - Please choose one
Which of the following is a obstacle to going in international business?


► Mergers
► Trade barriers
► Rivalry
► Protectionist attitudes

Question No: 4 ( Marks: 1 ) - Please choose one
Which one of the following is an important source of idea generation due to their familiarity with the needs of market?

► Existing products and services
► Distribution channels
► Federal government
► Consumers

Question No: 5 ( Marks: 1 ) - Please choose one
Which of the followings is NOT followed in brainstorming?

► Criticism is done by the group members
► The wilder idea is better
► Quantity of ideas is required
► The session should be fun, with no on dominating the discussion

Question No: 6 ( Marks: 1 ) - Please choose one
A/an ______ is an online connection between the company and its customers.

► Internet advertising
► Website
► E-Commerce
► World Wide Web

Question No: 7 ( Marks: 1 ) - Please choose one
Which one of the following is the next stage to the Concept Stage of Product Planning and Development Process?

► Idea Stage
► Product Planning Stage
► Product Development Stage
► Test Marketing Stage

Question No: 8 ( Marks: 1 ) - Please choose one
All of the following are essentials to maintain secrecy, EXCEPT:

► Train employees to refer sensitive questions to one person
► Discuss business in public places
► Provide escorts for all office visitors
► Use simple security such as locked file cabinets

Question No: 9 ( Marks: 1 ) - Please choose one
Licensing is a significant marketing strategy to:

► Use intellectual property of others
► Pirate others’ patents
► Grow the business in new markets
► Control the costs

Question No: 10 ( Marks: 1 ) - Please choose one
Which one of the following is the main problem for the entrepreneur in the beginning stages of creating a new venture?

► Lack of experience
► Limited resources
► Lack of education
► None of the given options

Question No: 11 ( Marks: 1 ) - Please choose one
How many perspectives should be considered while preparing business plan?

► One
► Three
► Four
► Not specific

Question No: 12 ( Marks: 1 ) - Please choose one
SBA stands for:

► Small business accountants
► Small business administration
► Small business adequacy
► Small business advisors

Question No: 13 ( Marks: 1 ) - Please choose one
Which one of the following is NOT an environmental factor?

► Economy
► Culture
► Technology
► Competition

Question No: 14 ( Marks: 1 ) - Please choose one
Which one of the following guide the firm through the long term decision making?

► Mission statement
► Product forecast
► Industry analysis
► None of the given options

Question No: 15 ( Marks: 1 ) - Please choose one
Which one of the following is NOT included in four C’s evaluation by lender?

► Character
► Cost
► Continuity
► Contribution

Question No: 16 ( Marks: 1 ) - Please choose one
For which of the following copy right acquisition is desirable?

► Songs
► Poems
► Models
► All of the given options

Question No: 17 ( Marks: 1 ) - Please choose one
A utility patent has a term of:

► 10 years
► 40 years
► 20 years
► 80 years

Question No: 18 ( Marks: 1 ) - Please choose one
Which of the following body issues patents?

► GATT
► NAFTA
► FTA
► PTO

Question No: 19 ( Marks: 1 ) - Please choose one
Which of the following is a idea generation method that focuses on parameters?


► Brainstorming
► Reverse brainstorming
► Creative problem solving
► Synectics

Question No: 20 ( Marks: 1 ) - Please choose one
Developing a new idea through inquiry and testing is called:

► Heuristics
► Forced relationship
► Scientific method
► Value analysis

Question No: 21 ( Marks: 1 ) - Please choose one
Trade barriers cause:

► Increase in cost
► Decrease in cost
► Increase in profit
► None of the given options

Question No: 22 ( Marks: 1 ) - Please choose one
Having less than 50 percent of equity share in an international venture is called:

► Minority interest
► Joint venture
► Majority interest
► Exporting

Question No: 23 ( Marks: 1 ) - Please choose one
Having more than 50% ownership position that provides the entrepreneur with managerial control is called:

► Joint venture
► Majority interest
► Horizontal merger
► Diversified activity merger

Question No: 24 ( Marks: 1 ) - Please choose one
Which of the following is a method of selling goods to another country by taking care of transactions?


► Indirect exporting
► Direct exporting
► Importing
► Management contract

Question No: 25 ( Marks: 1 ) - Please choose one
Which of the following two work environments should be good for spawning the new enterprises?

► Finance and marketing
► Finance and R&D
► Marketing and R&D
► Marketing and IT

Question No: 26 ( Marks: 1 ) - Please choose one
Gazelles are the firms with:

► High growth rate
► Moderate growth rate
► Zero growth rate
► Low growth rate

Question No: 27 ( Marks: 1 ) - Please choose one
Which of the following are the Fast-growth young companies?

► Gazelles
► Life style
► Foundation Company
► None of the given options

Question No: 28 ( Marks: 1 ) - Please choose one
Which one of the following is used to identify opportunity?

► Input from customers
► Input from channel members
► Input from business associates
► All of the given options

Question No: 29 ( Marks: 1 ) - Please choose one
In some countries, point of purchase displays are not allowed in retail stores. Such differences are studied by international entrepreneurs under which of the following type of environment?

► Economic
► Political
► Cultural
► Technological

Question No: 30 ( Marks: 1 ) - Please choose one
Which of the following factor has allowed small companies to act like they are big ones?

► Technology
► Customers
► Economic development
► Competition

Question No: 31 ( Marks: 1 ) - Please choose one
Which of the following is alternatively called corporate venturing?

► Entrepreneurship
► Intrapreneurship
► Act of stating a new venture
► Offering new products by an existing company

Question No: 32 ( Marks: 1 ) - Please choose one
Which one of the following is not the intrapreneurial leadership characteristic?


► Understands environment
► Encourage the team work
► Not flexible
► Persistent

Question No: 33 ( Marks: 1 ) - Please choose one
Which of the following system is necessary for expansion or elimination of intrapreneurial units?

► Management
► Evaluation
► Reward
► Training

Question No: 34 ( Marks: 1 ) - Please choose one
Which of the following typical culture has a climate and reward system that favors conservative decision making?

► Entrepreneurial
► Intrapreneurial
► Corporate
► None of the given options

Question No: 35 ( Marks: 1 ) - Please choose one
Which of the following makes the formation of new venture difficult within a corporate culture?


► Lack of intrapreneurial talent
► Lack of freedom to make autonomous decisions
► Lack of market opportunity
► All of the given options

Question No: 36 ( Marks: 1 ) - Please choose one
Which of the following are known as barriers to new product creation and development?

► Trial and error
► Opportunity parameters
► Opportunity cost
► Intrapreneurship culture

Question No: 37 ( Marks: 1 ) - Please choose one
Which of the following factor does not affect a person for being an entrepreneur?

► Family background
► Education
► Personal values
► Gender

Question No: 38 ( Marks: 1 ) - Please choose one
Degree of influence and control on other people is called:


► Locus of control
► Locomotion of control
► Locust of control
► Loss of control

Question No: 39 ( Marks: 1 ) - Please choose one
Which of the following plan describes market conditions and strategy related to products?

► Production plan
► Operational plan
► Financial plan
► Marketing plan

Question No: 40 ( Marks: 1 ) - Please choose one
Individuals who give psychological support to an entrepreneur are called:

► Role models
► Moral support networks
► Professional support networks
► Informal networks

Question No: 41 ( Marks: 10 )
In the given situations what types of merger is suitable for each situation and why?
• McDonald’s with KFC
• One steel mill with another steel mill
• ABN AMRO with Royal bank of Scotland
• Steel mill with a fertilizer producing firm
• An oil cooking producing company with Desi Ghee producing company

Answer:

McDonald’s with KFC: The merger in this case will be a horizontal merger because they both produce related products, which is the condition of horizontal merger.

One Steel Mill with other Steel Mill: The two steel mills will merge horizontally because both the mills are producing similar product.

ABN AMRO with Royal Bank of Scotland: Both the banks will merge horizontally because both are providing similar type of services.

Steel mill with a fertilizer producing firm: Since both the firms are non-interrelated so this merger will be a diversified merger.

An oil cooking producing company with Desi Ghee producing company: The merger in this situation will be a production merger because production of both products is related but the products themselves are not competing.

A company dealing in beer has a merger with cigarettes manufacturing firm. This merger is called:



► Horizontal merger

► Product extension merger

► Market extension merger

► Vertical merger


SBA stands for:



► Small business accountants

► Small business administration

► Small business adequacy

► Small business advisors


Which one of the following guide the firm through the long term decision making?



► Mission statement

► Product forecast

► Industry analysis

► None of the given options


For which of the following copy right acquisition is desirable?



► Songs

► Poems

► Models

► All of the given options


GATT is established in 1947, under:



► German leadership

► French leadership

► U.S. leadership


A person who managed large project was termed as the entrepreneur in the _________.



► Earliest period

► Middle ages

► 17th century

► 19th and 20th century


Which one of the following is the process of entrepreneurs developing new products that over time make current products obsolete?



► New business model

► Anatomization

► Creative destruction

► None of the given options


Which of the following grants protection to owner from anyone else making, using and selling the identified innovation?



► Utility patent

► Design patent

► Plant patent

► International patent


Which of the following is a method of selling goods to another country by taking care of transactions?





► Indirect exporting

► Direct exporting

► Importing

► Management contract


Andrew Carnegie is an example of entrepreneur of which century:



► Earliest period

► 19th and 20th century

► Middle ages

► 17th century

Which of the following is required for a company that wants to be more flexible in adopting changes?



► Management commitment

► Contact with customers

► Technology

► More productivity

► U.K. leadership


A typical inventor is usually ________________________.




Select correct option:











Highly creative & in love with the invention



Does not encourage change



Willing to modify the invention in order to augment commercial benefit



None of the given options


Gazelles are the firms with:

Select correct option:





High growth rate



Moderate growth rate



Zero% growth rate



Low growth rate


Moral support network includes following EXCEPT:

Select correct option:

Spouses

Friends

Business associates

Relatives


Which one of the following is the first step in the entrepreneurial process?

A. Developing successful business ideas

B. Deciding to become an entrepreneur

C. Growing the entrepreneurial firm

D. Moving from an idea to an entrepreneurial firm


Which one of the following factors does not affect a person for being an

entrepreneur?

A. Family background

B. Education

C. Personal Values

D. Gender


Which one of the following is NOT TRUE about male entrepreneurs?

A. Males often have investors, bank loans, or personal loans in addition to personal

funds

B. Males often have more experience in manufacturing, finance, or technical areas

C. Men are often more confident and less flexible and tolerant

D. Men usually list outside advisors as the least important supporters



And the subjective question was as under:


A company is going to launch a new product .It is searching for new idea generation for new product.what are

the available resources for idea generation .And suggest that which one is best with sound reason.

Question No: 27 ( Marks: 1 ) - Please choose one
Machine lubricant used onprocessin equipment in a manufacturin plant
would be classified as a:

► Period cost (manufacturin overhead)
► Period cost (Sellin, eneral & Admin)
► Product cost (manufacturin overhead)
► Product cost (Sellin, eneral & Admin)

Question No: 28 ( Marks: 1 ) - Please choose one
Which of the followin is a cost that chanes in proportion to chanes
in volume?

► Fixed cost
► Sunk cost
► Opportunity cost
► None of the iven
options

Question No: 29 ( Marks: 1 ) - Please choose one
The chief financial officer is also known as the:
► Controller
► Staff accountant
► Auditor
► Finance director

Question No: 30 ( Marks: 1 ) - Please choose one
Which of the followinmanufacturers is most likely to use a job order
cost accountin system?
► A soft drink producer
► A flour mill
► Tobacco manufacturin concern
► A builder of offshore oil ris

Question No: 31 ( Marks: 1 ) - Please choose one
If a predetermined FOH rate is not applied and the volume of
production is reduced from the planned capacity level, the cost per
unit expected to:
► Remain unchaned for fixed cost and increased for variable
cost
► Increase for fixed cost and remain unchaned for variable cost
► Increase for fixed cost and decreased for variable cost
► Decrease for both fixed and variable costs

Question No: 32 ( Marks: 1 ) - Please choose one
All of the followin arecharacteristics of roup Bonus Scheme EXCEPT:
► A standard time is set for the completion of a job
► If the time taken is reater than the time allowed, the
workers in the roup receive time waes
► If the time taken is less than the time allowed, the roup
receives a bonus on time saved
► If the time taken is reater than the time allowed, the
workers in the roup receive time deductions for extra hours

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Question No: 33 ( Marks: 1 ) - Please choose one
Which of the followin isTRUE when piece rate system is used for wae
determination?
► Under this method of remuneration a worker is paid on the
basis of time taken by him to perform the work
► Under this method of remuneration a worker is paid on the
basis of production
► The rate is expressed in terms of certain sum of money for
total production
► The rate is not expressed in terms of certain sum of money
for total production

Question No: 34 ( Marks: 1 ) - Please choose one
Under Halsey premium plan, if the employee completes his job in less
than the standard time fixed for the job, he is iven:
► Only waes for the actual hours taken
► Waes for the actual hours taken plus bonus equal to one half
of the wae of the time saved
► Waes for the actual hours taken plus bonus equal to one third
of the wae of the time saved
► Only the bonus equal to one half of the time saved

Question No: 35 ( Marks: 1 ) - Please choose one
Which of the followin isNOT a reason for carryin inventory?
► To maintain independence of operations
► To take advantae of economic purchase-order size
► To make the system less productive
► To meet variation in product demand

Question No: 36 ( Marks: 1 ) - Please choose one
“Takin 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 stockin
► Under stockin
► Replenishment of stock
► Acquisition of stock



Question No: 37 ( Marks: 1 ) - Please choose one
Financial statements are prepared:
► Only for publicly owned business oranizations
► For corporations, but not for sole proprietorships or
partnerships
► Primarily for the benefit of persons outside of the business
oranization
► Dependin upon only the need of the decision maker

Question No: 38 ( Marks: 1 ) - Please choose one
Which of the followinformula is used to calculate the Number of units
manufactured?
► Sold units - Units of closin finished oods inventory + Units
of openin finished oods inventory
► Sold units + Averae units of finished oods inventory
► Sold units - Averae units of finished oods inventory
► Sold units + Units of closin finished oods inventory - Units
of openin finished oods inventory

Question No: 39 ( Marks: 1 ) - Please choose one
Which of the followinstatement measures the financial position of the
entity on particular time?

► Income Statement
► Balance Sheet
► Cash Flow Statement
► Statement of Retained Earnin

Question No: 40 ( Marks: 1 ) - Please choose one
____________ is the cost that is incurred at the time of makin
transaction.
► Product Cost
► Period Cost
► Sunk Cost
► Historical Cost

Question No: 41 ( Marks: 10 )
Discuss the Avoidable and Unavoidable Causes of Labor Turnover.



The following figures have been extracted from a trader's records in
respect of wages and salaries
for July. Rupees
(i) Wages and salaries (gross) 6,300
(ii) Income tax 1,600
(iii) Employees' pension contributions 600
(iv) Employer's pension contributions 700


1 What is the total amount the trader will have to pay for wages and
salaries for July?
A 4,100
B 4,800
C 6,300
D 7,000


2 What is the net pay received by employees?
A 4,100
B 4,200
C 4,800
D 5,600

Net salary = Gross salary - income tax - employees' pension
contributions


3 Which of the following does not appear on a payslip?

A. Gross weekly wage for the employee
B. Tax paid to date by the employee in the tax year
C. Deductions paid by the employee
D. Details of the employee's expected pension.

4 Which is the most convenient way for a large employer to pay
salaries electronically?

A. BACS
B. Bank transfer
C. By cash
D. By cheque.
Q.2

Raw Usage per unit of Re-order Price Delivery Period

Re-order
level kg,
material Product Quantity Per kg.
kg. kg. Min Avg Max
A 10 10,000 0.1 1 2 3 8,000
B 4 5,000 0.3 3 4 5 4,750
C 6 10,000 0.15 2 3 4 2,000

Weekly production varies from 175 to 225 units, averaging 200 units.
What would you expect the quantities of the following to be:
(a) Minimum stock of A
(b) Maximum stock of B
(c) Re-order level of C
(d) Danger stock level of A
- Show quoted text -

Question No: 1 ( Marks: 1 ) - Please choose one
Under perpetual Inventory system at the end of the year:
► No closin entry passed
► Closin entry passed
► Closin value find throuh closin entry only
► None of the above.

Question No: 2 ( Marks: 1 ) - Please choose one
Which of the followin loss is expected in manufacturin process and
represents a necessary cost of processin the marketable units?
► Operatin loss
► Abnormal loss
► Normal loss
► Extraordinary loss

Question No: 3 ( Marks: 1 ) - Please choose one
Materials requisitioned from the storeroom included Rs. 1,000 of
direct materials and Rs. 2,000 of indirect materials. Manufacturin
overhead should be debited for what amount to record the transaction:
► Rs. 1,000
► Rs. 2,000
► Rs. 3,000
► Rs. 0

Question No: 4 ( Marks: 1 ) - Please choose one
When 10,000 endin units of work-in-process are 30% completed as to
conversion, it means:
► 30% of the units are completed
► 70% of the units are completed
► Each unit has been completed to 70% of its final stae
► Each of the units is 30% completed



Question No: 5 ( Marks: 1 ) - Please choose one
Which cost accumulation procedure is best suited to a continuous mass
production process of similar units?
► Job order costin
► Process costin
► Standard costin
► Actual costin

Question No: 6 ( Marks: 1 ) - Please choose one
Examples of industries that would use process costin include all of
the followin EXCEPT:
► Beveraes
► Food
► Hospitality
► Petroleum

Question No: 7 ( Marks: 1 ) - Please choose one
Of the followin production operations, which one most likely employ
job order cost accumulation?
► Soft drink manufacturin
► Ship builders
► Crude Oil refinin
► Candy manufacturin

Question No: 8 ( Marks: 1 ) - Please choose one
Which of the followin would be considered as factory overhead usin a
job order cost system?
► Direct materials
► Direct labor
► Depreciation on factory buildins
► Salesperson's salary

Question No: 9 ( Marks: 1 ) - Please choose one
In a job order cost system, the use of direct materials would be
recorded as a debit to:
► Finished oods inventory
► Manufacturin Overhead
► Raw Materials inventory
► Work in Process inventory

Question No: 10 ( Marks: 1 ) - Please choose one
PEL & co found that a production volume of 400 units corresponds to
production cost of Rs, 10,000 and that a production volume of 800
units corresponds to production costs of Rs.12,000. The variable cost
per unit would be?

► Rs. 5.00 per unit
► Rs. 1.50 per unit
► Rs. 2.50 per unit
► Rs. 0.50 per unit



Question No: 11 ( Marks: 1 ) - Please choose one
If a company uses a predetermined rate for the application of factory
overhead, the idle capacity variance is the:
► Over or under applied fixed cost element of overheads
► Over or under applied variable cost element of overheads
► Difference in budeted costs and actual costs of fixed
overheads items
► Difference in budeted cost and actual costs of variable
overheads items

Question No: 12 ( Marks: 1 ) - Please choose one
Which of the followinstatement about overhead applied rates are NOT
true?

► They are predetermined in advance for each period
► They are used to chare overheads to product
► They are based on actual data for each period
► None of the iven options

Question No: 13 ( Marks: 1 ) - Please choose one
What is cost apportionment?

► The charin of discrete identifiable items of cost to cost
centers or cost unit
► The collection of costs attributable to cost center and cost
unit usin the costin method, principles and techniques prescribed for
a particular business entity
► The process of establishin the costs of cost centers or cost
units
► The division of costs amon two or more cost centers in
proportion to the estimated benefit received, usin a proxy, e..square
feet

Question No: 14 ( Marks: 1 ) - Please choose one
In which of the followincenter FOH cost incurred.

► Production Center
► Service Center
► eneral Cost Center
► All of the iven options

Question No: 15 ( Marks: 1 ) - Please choose one
Where there is mass production of homoeneous units or where few
products are produced in batches, which of the followin cost driver
would berearded as best base for the determination of Factory overhead
absorption rate?
► Number of units produced
► Labor hours
► Prime cost
► Machine hours

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Question No: 16 ( Marks: 1 ) - Please choose one
The flux method of labor turnover denotes:
► Workers employed under the expansion schemes of the company
► The total chane in the composition of labor force
► Workers appointed aainst the vacancy caused due to dischare
or quittin of the oranization
► Workers appointed in replacement of existin employees

Question No: 17 ( Marks: 1 ) - Please choose one
Which of the followin best describe piece rate system?
► The increased volume of production results in decreased cost
of production
► The increased volume of production in minimum time
► Establishment of fair standard rates
► Hiher output is a result of efficient manaement

Question No: 18 ( Marks: 1 ) - Please choose one
Direct Labor is an element of:
► Prime cost
► Conversion cost
► Total production cost
► All of the iven options

Question No: 19 ( Marks: 1 ) - Please choose one
A store sells five cases of soda each day. Orderin costs are Rs. 8
per order, and soda costs Rs. 3 per case. Orders arrive four days from
the time they are placed. Daily holdin costs are equal to 5% of the
cost of the soda. What is the EOQ for soda?
► 4 cases
► 8 cases
► 10 cases
► 23 cases

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Question No: 20 ( Marks: 1 ) - Please choose one
Which of the followin is important requirement of the effective
material control?
► There are proper storae facilities
► There is a proper authority that will reulate the supply of
material
► The accounts should provide a runnin balance of the value of
the materials on hand
► All of the iven options

Question No: 21 ( Marks: 1 ) - Please choose one
Which of the followinmethod of inventory valuation is not recommended
under IAS 02?
► LIFO
► FIFO
► Weihted Averae
► Both LIFO & FIFO

Question No: 22 ( Marks: 1 ) - Please choose one
Averae consumption xEmerency time is a formula for the calculation
of:
► Lead time
► Re-order level
► Maximum consumption
► Daner level

Question No: 23 ( Marks: 1 ) - Please choose one
If, COS = Rs. 50,000
P Marin = 25% of sales
What will be the value of Sales?
► Rs. 200,000
► Rs. 66,667
► Rs. 62,500
► Rs. 400,000

Question No: 24 ( Marks: 1 ) - Please choose one
Costs that chane in response to alternative courses of action are
called:
► Relevant costs
► Differential costs
► Taret costs
► Sunk costs

Question No: 25 ( Marks: 1 ) - Please choose one
The cost of Telephone bill of the factory is treated as:

► Fixed cost
► Variable cost
► Step cost
► Semi variable cost

Question No: 26 ( Marks: 1 ) - Please choose one
Which of the followin are basic inventories for a manufacturin
concern?
► Indirect materials, oods in process, and raw materials
► Finished oods, raw materials, and direct materials
► Raw materials, oods in process, and finished oods
► Raw materials, factory overhead, and direct labor

Question No: 1 ( Marks: 1 ) - Please choose one
Under perpetual Inventory system at the end of the year:
► No closin entry passed
► Closin entry passed
► Closin value find throuh closin entry only
► None of the above.

Question No: 2 ( Marks: 1 ) - Please choose one
Which of the followin loss is expected in manufacturin process and
represents a necessary cost of processin the marketable units?
► Operatin loss
► Abnormal loss
► Normal loss
► Extraordinary loss

Question No: 3 ( Marks: 1 ) - Please choose one
Materials requisitioned from the storeroom included Rs. 1,000 of
direct materials and Rs. 2,000 of indirect materials. Manufacturin
overhead should be debited for what amount to record the transaction:
► Rs. 1,000
► Rs. 2,000
► Rs. 3,000
► Rs. 0

Question No: 4 ( Marks: 1 ) - Please choose one
When 10,000 endin units of work-in-process are 30% completed as to
conversion, it means:
► 30% of the units are completed
► 70% of the units are completed
► Each unit has been completed to 70% of its final stae
► Each of the units is 30% completed



Question No: 5 ( Marks: 1 ) - Please choose one
Which cost accumulation procedure is best suited to a continuous mass
production process of similar units?
► Job order costin
► Process costin
► Standard costin
► Actual costin

Question No: 6 ( Marks: 1 ) - Please choose one
Examples of industries that would use process costin include all of
the followin EXCEPT:
► Beveraes
► Food
► Hospitality
► Petroleum

Question No: 7 ( Marks: 1 ) - Please choose one
Of the followin production operations, which one most likely employ
job order cost accumulation?
► Soft drink manufacturin
► Ship builders
► Crude Oil refinin
► Candy manufacturin

Question No: 8 ( Marks: 1 ) - Please choose one
Which of the followin would be considered as factory overhead usin a
job order cost system?
► Direct materials
► Direct labor
► Depreciation on factory buildins
► Salesperson's salary

Question No: 9 ( Marks: 1 ) - Please choose one
In a job order cost system, the use of direct materials would be
recorded as a debit to:
► Finished oods inventory
► Manufacturin Overhead
► Raw Materials inventory
► Work in Process inventory

Question No: 10 ( Marks: 1 ) - Please choose one
PEL & co found that a production volume of 400 units corresponds to
production cost of Rs, 10,000 and that a production volume of 800
units corresponds to production costs of Rs.12,000. The variable cost
per unit would be?

► Rs. 5.00 per unit
► Rs. 1.50 per unit
► Rs. 2.50 per unit
► Rs. 0.50 per unit



Question No: 11 ( Marks: 1 ) - Please choose one
If a company uses a predetermined rate for the application of factory
overhead, the idle capacity variance is the:
► Over or under applied fixed cost element of overheads
► Over or under applied variable cost element of overheads
► Difference in budeted costs and actual costs of fixed
overheads items
► Difference in budeted cost and actual costs of variable
overheads items

Question No: 12 ( Marks: 1 ) - Please choose one
Which of the followinstatement about overhead applied rates are NOT
true?

► They are predetermined in advance for each period
► They are used to chare overheads to product
► They are based on actual data for each period
► None of the iven options

Question No: 13 ( Marks: 1 ) - Please choose one
What is cost apportionment?

► The charin of discrete identifiable items of cost to cost
centers or cost unit
► The collection of costs attributable to cost center and cost
unit usin the costin method, principles and techniques prescribed for
a particular business entity
► The process of establishin the costs of cost centers or cost
units
► The division of costs amon two or more cost centers in
proportion to the estimated benefit received, usin a proxy, e..square
feet

Question No: 14 ( Marks: 1 ) - Please choose one
In which of the followincenter FOH cost incurred.

► Production Center
► Service Center
► eneral Cost Center
► All of the iven options

Question No: 15 ( Marks: 1 ) - Please choose one
Where there is mass production of homoeneous units or where few
products are produced in batches, which of the followin cost driver
would berearded as best base for the determination of Factory overhead
absorption rate?
► Number of units produced
► Labor hours
► Prime cost
► Machine hours

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Question No: 16 ( Marks: 1 ) - Please choose one
The flux method of labor turnover denotes:
► Workers employed under the expansion schemes of the company
► The total chane in the composition of labor force
► Workers appointed aainst the vacancy caused due to dischare
or quittin of the oranization
► Workers appointed in replacement of existin employees

Question No: 17 ( Marks: 1 ) - Please choose one
Which of the followin best describe piece rate system?
► The increased volume of production results in decreased cost
of production
► The increased volume of production in minimum time
► Establishment of fair standard rates
► Hiher output is a result of efficient manaement

Question No: 18 ( Marks: 1 ) - Please choose one
Direct Labor is an element of:
► Prime cost
► Conversion cost
► Total production cost
► All of the iven options

Question No: 19 ( Marks: 1 ) - Please choose one
A store sells five cases of soda each day. Orderin costs are Rs. 8
per order, and soda costs Rs. 3 per case. Orders arrive four days from
the time they are placed. Daily holdin costs are equal to 5% of the
cost of the soda. What is the EOQ for soda?
► 4 cases
► 8 cases
► 10 cases
► 23 cases

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Question No: 20 ( Marks: 1 ) - Please choose one
Which of the followin is important requirement of the effective
material control?
► There are proper storae facilities
► There is a proper authority that will reulate the supply of
material
► The accounts should provide a runnin balance of the value of
the materials on hand
► All of the iven options

Question No: 21 ( Marks: 1 ) - Please choose one
Which of the followinmethod of inventory valuation is not recommended
under IAS 02?
► LIFO
► FIFO
► Weihted Averae
► Both LIFO & FIFO

Question No: 22 ( Marks: 1 ) - Please choose one
Averae consumption xEmerency time is a formula for the calculation
of:
► Lead time
► Re-order level
► Maximum consumption
► Daner level

Question No: 23 ( Marks: 1 ) - Please choose one
If, COS = Rs. 50,000
P Marin = 25% of sales
What will be the value of Sales?
► Rs. 200,000
► Rs. 66,667
► Rs. 62,500
► Rs. 400,000

Question No: 24 ( Marks: 1 ) - Please choose one
Costs that chane in response to alternative courses of action are
called:
► Relevant costs
► Differential costs
► Taret costs
► Sunk costs

Question No: 25 ( Marks: 1 ) - Please choose one
The cost of Telephone bill of the factory is treated as:

► Fixed cost
► Variable cost
► Step cost
► Semi variable cost

Question No: 26 ( Marks: 1 ) - Please choose one
Which of the followin are basic inventories for a manufacturin
concern?
► Indirect materials, oods in process, and raw materials
► Finished oods, raw materials, and direct materials
► Raw materials, oods in process, and finished oods
► Raw materials, factory overhead, and direct labor

Question No: 21 ( Marks: 1 ) - Please choose one
The following data related to production of ABC Company:

Units produced 8,000 units
Direct materials Rs.6
Direct labor Rs.12
Fixed overhead Rs.24000
Variable overhead Rs.6
Fixed selling and administrative Rs.2000
Variable selling and administrative Rs.2
Using the data given above, what will be the unit product cost under
marginal costing?
► Rs. 22
► Rs. 24
► Rs. 28
► Rs. 30

Question No: 22 ( Marks: 1 ) - Please choose one
Net income reported under direct costing will exceed net income
reported under absorption costing for a given period if:
► The fixed overhead exceeds the variable overhead
► Production equals sales for that period
► Production exceeds sales for that period
► Sales exceed production for that period

Question No: 23 ( Marks: 1 ) - Please choose one
Profit under absorption costing will be higher than under marginal
costing if:
► Produced units > Units sold
► Produced units < Units sold
► Produced units =Units sold
► Profit cannot be determined with given statement

Question No: 24 ( Marks: 1 ) - Please choose one
A firm sells bags for Rs. 14 each. The variable cost for each unit is
Rs. 8. What is the contribution margin per unit?
► Rs. 6
► Rs. 12
► Rs. 14
► Rs. 8

Question No: 25 ( Marks: 1 ) - Please choose one
The break-even point in units is calculated using which of the
following factors?
► Fixed expenses and the contribution margin ratio
► Variable expenses and the contribution margin ratio
► Fixed expenses and the unit contribution margin
► Variable expenses and the unit contribution margin

Question No: 26 ( Marks: 1 ) - Please choose one
The point at which the cost line intersects the sales line will be
called:
► Budgeted sales
► Break Even sales
► Margin of safety
► Contribution margin

Question No: 27 ( Marks: 1 ) - Please choose one
If one would prepare a graph with a horizontal axis representing
units of production and a vertical axis representing per-unit
production cost, how would a line representing fixed production cost
is drawn?
► As a horizontal line
► As a vertical line
► As a straight line sloping upward to the right
► As a straight line sloping downward to the right

Explanation: The per-unit fixed cost would decline as production
increased. That is, total production divided into the constant fixed
cost amount would result in a decreasing per unit fixed cost. A line
sloping downward to the right would represent this situation.

Question No: 28 ( Marks: 1 ) - Please choose one
Budget for an organization is prepared by which of the following
person?
► Functional head
► Manager
► Auditor
► Administrator

Question No: 29 ( Marks: 1 ) - Please choose one
Amount of Depreciation on fixed assets will be fixed in nature if
calculated under which of the following method?
► Straight line method
► Reducing balance method
► Some of year's digits method
► Double declining method

Question No: 30 ( Marks: 1 ) - Please choose one
Which of the following factor/s should be considered while
constructing an administrative selling expense budget?
► Fixed expenses
► Past experience
► Variable expenses
► All of the given options

Question No: 31 ( Marks: 1 ) - Please choose one
All are examples of cash disbursements EXCEPT:
► Payment for materials purchased
► Payment received as collection of accounts receivable
► Payment of dividends
► Payment of taxes

Question No: 32 ( Marks: 1 ) - Please choose one
A budget that requires management to justify all expenditures, rather
than just changes from the previous year is referred to as:
► Self-imposed budget
► Participative budget
► Perpetual budget
► Zero-based budget

Question No: 33 ( Marks: 1 ) - Please choose one
Which of the following sentences is the best description of zero-base
budgeting?
► Zero-base budgeting is a technique applied in government
budgeting in order to have a neutral effect on policy issues
► Zero-base budgeting requires a completely clean sheet of
paper every year, on which each part of the organization must justify
the budget it requires
► Zero-base budgeting starts with the figures of the previous
period and assumes a zero rate of change
► Zero based budgeting is an alternative name of flexible
budget

Question No: 34 ( Marks: 1 ) - Please choose one
Which of the following is the first step in the decision-making
process?
► Clarify the decision problem
► Collect the data
► Select an alternative
► Develop a decision model

Question No: 35 ( Marks: 1 ) - Please choose one
Which the following would be considered a Relevant Cost?
► The book value of the old equipment
► Depreciation expense on the old equipment
► The current disposal price of the old equipment
► Historical cost of an equipment

Question No: 36 ( Marks: 1 ) - Please choose one
The Auslander Company has 1,600 obsolete calculators that are carried
in inventory at a total cost of Rs. 106,800. If these calculators are
upgraded at a total cost of Rs. 40,000, they can be sold for a total
of Rs. 120,000. As an alternative, the calculators can be sold in
their present condition for Rs. 44,800. What will be the sunk cost in
this situation?
► Rs. 0
► Rs. 40,000
► Rs. 44,800
► Rs. 106,800

Question No: 37 ( Marks: 1 ) - Please choose one
Costs that have been incurred include which of the following?
► Only opportunity costs
► Costs that have already been paid
► Costs that have been committed
► Both costs that have already been paid and committed

Question No: 38 ( Marks: 1 ) - Please choose one
For a retail outlet chain with multiple stores, which of the
following statements would be correct?
► Stores which have a net loss should be discontinued
► Stores with a negative contribution margin should be
discontinued
► Stores with a negative contribution margin should be
discontinued provided such discontinuation will not cause an increase
in sales at other stores
► Stores with a negative contribution margin should not be
discontinued if such discontinuation will cause profitable stores to
bear a portion of the unprofitable store's overhead

Question No: 39 ( Marks: 1 ) - Please choose one
In the process costing when material is issued for production to
department no 1.what would be the journal entry Passed?

► W.I.P (Dept-I)
To Material a/c

► W.I.P (Dept-ii)
To Material a/c

► Material a/c
To W.I.P (Dept-ii)

► W.I.P (Dept-ii)
To FOH applied.





Question No: 40 ( Marks: 1 ) - Please choose one
FIFO is the abbreviation of:
► Final Interest-Free Option
► First in First out Method
► None of the given options
► Fixed income Financial Operations

Question No: 41 ( Marks: 5 )
Bouch Company has the following data of year 02 given below

Year 02
Sales Rs. 120/unit
Direct Materials Rs. 8/unit
Direct labor Rs. 10/unit
Variable overhead Rs. 7/unit
Selling & Admin expenses Rs. 2/unit
Fixed overhead Rs. 7,500

Normal volume of production 250 units per year

Information regarding units as follows

Item
1st year
2nd year
3rd year
4th year


units
units
units
units

Opening stock
200
300
300

Production
300
250
200
200

Sales
100
150
200
300


Required: Prepare income statement of year 2 under absorption costing.


Question No: 42 ( Marks: 5 )
A Company manufacturers two products A and B. Forecasts for first 7
months is as under:

Month Sales in Units
A B
January 1,000 2,800
February 1,200 2,800
March 1,610 2,400
April 2,000 2,000
May 2,400 1,600
June 2,400 1,600
July 2,000 1,800

No work in process inventory has been estimated in any moth however
finished goods inventory shall be on hand equal to half the sales to
the next month, in each month. This is constant practice.
Budgeted production and production costs for the year 1999 will be as
follows:

Production units 22,500 24,000
Direct Materials (per unit) 12.5 19
Direct Labor (per unit) 4.5 7
F.O.H. (apportioned) Rs. 66,000 Rs 96,000

Prepare for the six months period ending June 1999, a production
budget for ‘’Product A”



Question No: 43 ( Marks: 10 )
The managing director of Parser Limited, a small business, is
considering undertaking a one-off contract. She has asked her
inexperienced accountant to advise on what costs are likely to be
incurred so that she can price at a profit. The following schedule has
been prepared:

Costs for special order Notes Rs.
Direct wages 1 28,500
Supervisor costs 2 11,500
General overheads 3 4,000
Machine depreciation 4 2,300
Machine overheads 5 18,000
Materials 6 34,000
Total 98,300

Notes
v Direct wages comprise the wages of two employees,
particularly skilled in the labor process for this job. They could be
transferred from another department to undertake the work on the
special order. They are fully occupied in their usual department and
sub-contracting staff would have to be brought in to undertake the
work left behind.
v Sub-contracting costs would be Rs. 32,000 for the period of
the work. Other sub-contractors who are skilled in the special order
techniques are also available to work on the special order. The costs
associated with this would amount to Rs. 31,300.
v A supervisor would have to work on the special order. The
cost of Rs. 11,500 is made up of Rs. 8,000 normal payments plus a Rs.
3,500 additional bonus for working on the special order. Normal
payments refer to the fixed salary of the supervisor. In addition, the
supervisor would lose incentive payments in his normal work amounting
to Rs. 2,500. It is not anticipated that any replacement costs
relating to the supervisors' work on other jobs would arise.
v General overheads comprise an apportionment of Rs. 3,000
plus an estimate of Rs. 1,000 incremental overheads.

Required
Produce a revised costing schedule for the special project based on
relevant costing principles. Fully explain and justify each of the
costs included in the costing schedule.

Question No: 44 ( Marks: 10 )
Due to the declining popularity of digital watches, Swiss Company’s
digital watch line has not reported a profit for several years. An
income statement for last year follows:

Segment Income Statement—Digital Watches

Rs. Rs.
Sales.....................................................................
500,000
Less variable expenses:
Variable manufacturing costs.............................. 120,000
Variable shipping costs...................................... 5,000
Commissions.....................................................
75,000 200,000
Contribution margin...............................................
300,000
Less fixed expenses:
General factory overhead(1).............................. 60,000
Salary of product line manager........................... 90,000
Depreciation of equipment (2)............................ 50,000
Product line advertising......................................
100,000
Rent—factory space (3).................................... 70,000
General administrative expense (1)..................... 30,000
400,000
Net operating loss.................................................
(100,000)

1) Allocated common costs that would be redistributed to other
product lines if digital watches were dropped
2) This equipment has no resale value and does not wear out
through use
3) The digital watches are manufactured in their own facility

Should the company retain or drop the digital watch line?



Question No: 45 ( Marks: 10 )

Production component Rates Per unit Rate
Direct material 2.5 lbs @ Rs. 4.00 Rs. 10.00
Direct Labor .5 hr @ Rs. 16.00 Rs. 8.00
VOH .5 hr @ Rs. 4.00 Rs. 2.00
Fixed FOH Rs. 40,000 Rs. 2.50
Actual Output 16,000 units
Variable S&A Rs. 6.00 per unit
Fixed S&A Rs. 60,000
Selling price Rs. 40

Assume sales of 12,000 units.
Required: What is the profit under marginal and absorption costing
method?

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

Question No: 26 ( Marks: 1 ) - Please choose one
The components of the conversion cost are:

► Direct Material + Direct Labor + Other Direct Cost
► Direct Labor + FOH
► Prime Cost + FOH+ Other Direct Cost
► Prime Cost + FOH

Question No: 27 ( Marks: 1 ) - Please choose one
The cost of Telephone bill of the factory is treated as:

► Fixed cost
► Variable cost
► Step cost
► Semi variable cost

Question No: 28 ( Marks: 1 ) - Please choose one
Which of the followin is a cost that chanes in proportion to chanes
in volume?

► Fixed cost
► Sunk cost
► Opportunity cost
► None of the iven
options

Question No: 29 ( Marks: 1 ) - Please choose one
Cost accountin concepts include all of the followin EXCEPT:
► Plannin
► Controllin
► Sharin
► Costin

Question No: 30 ( Marks: 1 ) - Please choose one
If a predetermined FOH rate is not applied and the volume of
production is reduced from the planned capacity level, the cost per
unit expected to:
► Remain unchaned for fixed cost and increased for variable
cost
► Increase for fixed cost and remain unchaned for variable cost
► Increase for fixed cost and decreased for variable cost
► Decrease for both fixed and variable costs

Question No: 31 ( Marks: 1 ) - Please choose one
All of the followin are characteristics of roup Bonus Scheme EXCEPT:
► A standard time is set for the completion of a job
► If the time taken is reater than the time allowed, the
workers in the roup receive time waes
► If the time taken is less than the time allowed, the roup
receives a bonus on time saved
► If the time taken is reater than the time allowed, the
workers in the roup receive time deductions for extra hours

Question No: 32 ( Marks: 1 ) - Please choose one
Which of the followin isTRUE when piece rate system is used for wae
determination?
► Under this method of remuneration a worker is paid on the
basis of time taken by him to perform the work
► Under this method of remuneration a worker is paid on the
basis of production
► The rate is expressed in terms of certain sum of money for
total production
► The rate is not expressed in terms of certain sum of money
for total production

Question No: 33 ( Marks: 1 ) - Please choose one
Under Halsey premium plan, if the employee completes his job in less
than the standard time fixed for the job, he is iven:
► Only waes for the actual hours taken
► Waes for the actual hours taken plus bonus equal to one half
of the wae of the time saved
► Waes for the actual hours taken plus bonus equal to one third
of the wae of the time saved
► Only the bonus equal to one half of the time saved

Question No: 34 ( Marks: 1 ) - Please choose one
Which of the followin isNOT a reason for carryin inventory?
► To maintain independence of operations
► To take advantae of economic purchase-order size
► To make the system less productive
► To meet variation in product demand

Question No: 35 ( Marks: 1 ) - Please choose one
Restockin of stores, in order to ensure efficient functionin of the
stores department and steady flow of materials to the production
departments, is duty of:
► Manaers
► Storekeeper
► Production In chare
► Sales supervisor

Question No: 36 ( Marks: 1 ) - Please choose one
You made Rs. 10,000 loan to your cousin's company. At the end of one
year, the company returned to you Rs. 10,850. The Rs. 850 is called
which one of the followin?
► Increases in loan
► Increases in dividends
► An 8.5% return on investment
► All of the iven options

Question No: 37 ( Marks: 1 ) - Please choose one
The net sales of the business totals Rs. 200,000 and the Cost of oods
Sold for the same period totals Rs.146,000. What is the ross marin
ratio?
► 0.22
► 0.25
► 0.27
► 0.33

Question No: 38 ( Marks: 1 ) - Please choose one
If, ross profit = Rs. 40,000
P Marin = 25% of sales
What will be the value of cost of oods sold?
► Rs. 160,000
► Rs. 120,000
► Rs. 40,000
► Can not be determined

Question No: 39 ( Marks: 1 ) - Please choose one
Cost accountants are concerned about the ratios relatin to the
Profits and Manufacturin costs. These ratios miht include:
► ross Mark up rate
► Inventory turnover ratio
► Cost of oods sold to sales ratio
► All of the iven options

Question No: 40 ( Marks: 1 ) - Please choose one
The total cost to produce one unit is Rs. 600. Direct materials are
20% of the total cost and direct labor is 1/3 of the combined total of
direct labor and direct materials. What was the cost for direct
materials, direct labor, and factory overhead?
► Rs. 420, Rs. 60 and Rs. 120, respectively
► Rs. 60, Rs. 120 and Rs. 420, respectively
► Rs. 120, Rs. 60 and Rs. 420, respectively
► Rs 60, Rs. 420 and Rs. 120, respectively

Question No: 41 ( Marks: 10 )
CK Products Limited purchased materials of Rs. 550,000 and incurred
direct labor of Rs. 420,000 durin the year ended June 30, 2006.
Factory overheads for the year were Rs.380,000. The inventory balances
are as follows:


July 1, 2005 June 30, 2006
Rupees Rupees
Finished oods
90,000 105,000
Work in
process
121,000 110,000
Materials
100,000 105,000

Required:
1) Cost Of oods Manufactured Statement.
2) Cost Of oods Sold Statement.

ANSWER:
CK Products Limited
Cost of oods sold statement
For the year ended June 30, 2006

Rupees
Openin inventory
100,000
Add: purchases
550,000
Less: Closin inventory 105,000
Direct material used
545000
Add: Direct labour
420,000
Prime
Cost
965,000
Add: factory overhead cost 380,000
Total factory cost
1,345,000
Add: openin work in process 121,000
Cost of oods to be manufactured 1,466,000
Less: closin work in process 110,000
Cost of oods manufactured 1,356,000
Add: Openin finished oods 90,000
Cost of oods to be sold
1,446,000
Less: closin finished oods 105,000
Cost of oods sold
1,341,000

Question No: 1 ( Marks: 1 ) - Please choose one
D Corporation uses process costin to calculate the cost of
manufacturin Crunchies. Durin the month 12,500 units were completed,
1,500 units remained in work in process at 25 percent completed. How
many equivalent units are produced?

► 12,500 units
► 12,875 units
► 14,250 units
► 12,125 units
25% of 1500 completed = 1500*.25 = 375
375+12500 = 12875

Question No: 2 ( Marks: 1 ) - Please choose one
reenwood petroleum has the data for the year was as follow:

Openin WIP 26,000 barrels.
Introduced durin the year 67,000 barrels
Closin WIP 15,000 barrels.

How many barrels were completed and transferred out of work-in-process
this period?




► 67,000 barrels
► 78,000 barrels
► 82,000 barrels
► 93,000 barrels

Question No: 3 ( Marks: 1 ) - Please choose one
Durin the year 50,000 units put in to process.30, 000 units were
completed. Closin WIP were 20,000 units, 70% completed. How much the
equivalent units of output would be produced?

► 20,000 units
► 30,000 units/
► 36,000 units
► 44,000 units
70%of WIP completed = 2000*.70= 1400
30,000+1400= 44,000

Question No: 4 ( Marks: 1 ) - Please choose one
What would be the effect on the cost of a department in case of
normal Loss?
► Decreased
► Increased
► No effect
► Increase to the %ae of loss

Question No: 5 ( Marks: 1 ) - Please choose one
When 10,000 endin units of work-in-process are 30% completed as to
conversion, it means:
► 30% of the units are completed
► 70% of the units are completed
► Each unit has been completed to 70% of its final stae
► Each of the units is 30% completed

Question No: 6 ( Marks: 1 ) - Please choose one
In order to compute equivalent units of production, which of the
followin must be reasonably estimated?
► Units
► The percentae of completion
► Direct material cost
► Units started and completed

Question No: 7 ( Marks: 1 ) - Please choose one
In a job order cost system, the use of direct materials would be
recorded as a debit to:
► Finished oods inventory
► Manufacturin Overhead
► Raw Materials inventory (not confirm)
► Work in Process inventory

Question No: 8 ( Marks: 1 ) - Please choose one
If manaement predicts total direct labor costs of Rs. 100,000 and
total overhead costs of Rs. 200,000, what is its predetermined
overhead rate based on direct labor costs?
► 50%
► 100%
► 200%
► Cannot be determined

Question No: 9 ( Marks: 1 ) - Please choose one
P Ltd applied overheads on the basis of direct labor hours. The
overhead applied rate for the period has been based on budeted
overhead of Rs.150, 000 and 50,000 direct labor hours. Durin the
period overhead of Rs. 180,000 were incurred and 60,000 direct labor
hours were used.
Which of the followin statement is correct?

► Overhead was Rs.30,000 over applied
► Overhead was Rs.30,000 under applied
► No under or over applied occurred
► None of the iven

Question No: 10 ( Marks: 1 ) - Please choose one
Raymond Corporation estimates factory overhead of Rs. 345,000 for
next fiscal year. It is estimated that 60,000 units will be produced
at a material cost of Rs. 575,000. Conversion will require 34,500
direct labor hours at a cost of Rs. 10 per hour, with 25,875 machine
hours.

FOH rate on the bases of Prime cost would be?
► Rs. 37.5 per unit
► Rs. 56.6 per unit
► Rs. 60 per unit
► Rs.1 per unit

Question No: 11 ( Marks: 1 ) - Please choose one
Nelson Company has followin FOH detail.
Budeted
(Rs.) Actual (Rs.)
Production Fixed overheads 36,000
39,000
Production Variable overheads 9,000
12,000
Direct labor hours
18,000 20,000

What would be the amount of under/over applied FOH

► Under applied by Rs.1,000
► Over applied by Rs.1,000
► Under applied by Rs.11,000
► Over applied by Rs.38,000

Question No: 12 ( Marks: 1 ) - Please choose one
Which of the followin isTRUE reardin the use of blanket rate?
► The use of a sinle blanket rate makes the apportionment of
overhead costs unnecessary
► The use of a sinle blanket rate makes the apportionment of
overhead costs necessary
► The use of a sinle blanket rate makes the apportionment of
overhead costs uniform
► None of the iven options

Question No: 13 ( Marks: 1 ) - Please choose one
A Blanket Rate is:
► A sinle rates which used throuhout the oranisation
departments
► A double rates which used throuhout the oranisation
departments
► A sinle rates which used in different departments of the
oranisation.
► None of the iven

Question No: 14 ( Marks: 1 ) - Please choose one
It is possible for an item of overhead expenditure to be shared
amonst many departments. It is also possible that this same item may
relate to just one specific department.
If the item was not chared specifically to a sinle department this
would be an example of:

► Apportionment

► Allocation

► Re-apportionment

► Absorption


Question No: 15 ( Marks: 1 ) - Please choose one
FOH absorption rate is calculated by the way of:

► Estimated FOH Cost/Direct labor hours
► Estimated FOH Cost/Direct labor cost
► Estimated FOH Cost/Machine hours
► All of the iven options

Question No: 16 ( Marks: 1 ) - Please choose one
Which of the followin is / are time based incentive wae plan?
► Hasley Premium Plan
► Hasley Weir Premium Plan
► Rowan Premium Plan
► All of the iven options

Question No: 17 ( Marks: 1 ) - Please choose one
If, Basic Salary Rs.10,000
Per Piece commission Rs. 5
Unit sold 700 pieces
What will be the total Salary?
► Rs. 3,500
► Rs. 13,500
► Rs. 10,000
► Rs. 6,500

Question No: 18 ( Marks: 1 ) - Please choose one
Payroll includes:
► Salaries & Waes of direct labor
► Salaries & Waes of Indirect labor
► Salaries & Waes of Administrative
► Salaries & Waes of direct labor, Indirect labor, and
Administrative

Question No: 19 ( Marks: 1 ) - Please choose one
Which of the followin document evidences the transaction of purchase
of material?
► Material requisition
► Store requisition
► Purchase order
► Purchase invoice

Question No: 20 ( Marks: 1 ) - Please choose one
Which of the followin isNOT an assumption of the basic economic-order
quantity model?
► Annual demand is known
► Orderin cost is known
► Carryin cost is known
► Quantity discounts are available

Question No: 21 ( Marks: 1 ) - Please choose one
A store sells five cases of soda each day. Orderin costs are Rs. 8
per order, and soda costs Rs. 3 per case. Orders arrive four days from
the time they are placed. Daily holdin costs are equal to 5% of the
cost of the soda. What is the EOQ for soda?
► 4 cases
► 8 cases
► 10 cases
► 23 cases

Question No: 22 ( Marks: 1 ) - Please choose one
All of the followin are deducted from ross Profit to calculate
Operatin income EXCEPT:
► Sellin expenses
► Advertisin expenses
► Administrative expenses
► Financial expenses

Question No: 23 ( Marks: 1 ) - Please choose one
Which of the followin isCORRECT to calculate cost of oods
manufactured?

► Direct labor costs plus total manufacturin costs
► The beinnin work in process inventory plus total manufacturin
costs and subtract the endin work in process inventory
► Beinnin raw materials inventory plus direct labor plus
factory overhead
► Conversion costs and work in process inventory adjustments
results in cost of oods manufactured

Question No: 24 ( Marks: 1 ) - Please choose one
Which of the followin is a period cost?
► Direct materials
► Indirect materials
► Factory utilities
► Administrative expenses

Question No: 25 ( Marks: 1 ) - Please choose one
The salary of factory clerk is treated as:
► Direct labor cost
► Indirect labor cost
► Conversion cost
► Prime cost

Q.1) Cost accounting concepts include all of the following except

A. Planning
B. Controlling
C. Sharing (correct answer)
D. Costing
Un-Answered 65% answered this correctly. 35% answered wrong

Q.2) the applied factory overhead cost is less than the actual cost is
called

A. unfavorable variance (correct answer)
B. favorable variance
Un-Answered 56% answered this correctly. 44% answered wrong
Q.3) Difference between the actual cost and applied cost is called

A. Variance (correct answer)
B. Normal cost
C. overhead absorption
D. Variable Cost
Explanation
Variance
Difference between the actual cost and applied cost is calculated by
subtracting actual cost from
the applied cost. Where the applied cost is greater than the actual
cost it is favorable variance,
but where the applied cost is lesser than the actual cost it is
unfavorable variance
Un-Answered 89% answered this correctly. 11% answered wrong
Q.4) Fixed Cost and Variable Cost
are Division of cost by its behavior

A. True (correct answer)
B. False
Explanation
Division of cost by its behavior
Basically the cost of production has two behaviors:
1. Fixed Cost
2. Variable Cost
Un-Answered 36% answered this correctly. 64% answered wrong

Q.5) Fixed cost per unit increases when

A. Variable cost per unit increase
B. Variable cost per unit decreases
C. Production volume increases
D. Production volume decreases (correct answer)
Un-Answered 76% answered this correctly. 24% answered wrong

Q.6) Prime cost is also known as Direct cost

A. True (correct answer)
B. False
Un-Answered 56% answered this correctly. 44% answered wrong

Q.7) Variable cost per unit

A. Varies when output varies
B. Remains constant (correct answer)
C. Increases when output increases
D. Decrease when output decreases
Un-Answered 65% answered this correctly. 35% answered wrong

Q.8) Variable cost, Fixed cost which changes with in an alternatives
and Opportunity cost are examples of

A. Irrelevant Cost
B. Product Cost
C. Relevant Cost (correct answer)
D. Period Cost
Un-Answered 74% answered this correctly. 26% answered wrong

Q.9) Total Manufacturing cost is also known as Factory cost.

A. True (correct answer)
B. False
Un-Answered 63% answered this correctly. 37% answered wrong
Q.10) The variable cost per unit is the same amount for each unit
produced

A. True (correct answer)
B. false
Explanation
Variable Costs
A variable cost is a cost which tends to very directly with the change
in activity level. The variable
cost per unit is the same amount for each unit produced whereas total
variable cost increases as
volume of output increases.
Graph
Un-Answered 83% answered this correctly. 17% answered wrong

Q.11) All are product cost Except



A. Direct material cost
B. Factory overhead cost
C. administrative expenses (correct answer)
D. Direct labor cost
Un-Answered 69% answered this correctly. 31% answered wrong

Q.12) The main purpose of cost accounting is to

A. to reduce uncertainty
B. Maximize profits
C. Provide information to management for decision making (correct
answer)
D. Aid in the fixation of selling price;
Un-Answered 52% answered this correctly. 48% answered wrong

Q.13) Which of the followings is the reason of increase in total
variable cost

A. Increase in fixed cost
B. Rise in interest on capital
C. Increase in direct material cost (correct answer)
D. Depreciation of machinery
Un-Answered 60% answered this correctly. 40% answered wrong

Q.14) Conversion cost = _________

A. Prime cost + Factory overhead
B. Indirect labor + Factory overhead
C. Direct labor + factory overhead (correct answer)
D. indirect cost + factory overhead
Un-Answered 60% answered this correctly. 40% answered wrong

Q.15) Under/Over applied FOH cost can be adjusted in

A. Entire Production
B. Cost of Goods Sold
C. Net profit
D. All of the above (correct answer)
Un-Answered 83% answered this correctly. 17% answered wrong
Q.16) Differential Cost or Incremental cost is difference of the costs
of two or more alternatives.

A. True (correct answer)
B. False
Explanation
Differential Cost or Incremental cost
It is the difference of the costs of two or more alternatives.
Example
Difference between costs of raw material of two categories or quality.
Incorrect 67% answered this correctly. 33% answered wrong
Q.17) Packaging department is example of __________

A. investment centre
B. Profit Centre
C. Cost centre (correct answer)
D. Revenue Centre (your answer)
Explanation
Cost Center
Cost centre is a location where costs are incurred and may or may not
be attributed to cost
units.
Examples
Workshop in a manufacturing concern
Auto service department
Electrical service department
Packaging department
Janitorial service department
Un-Answered 34% answered this correctly. 66% answered wrong

Q.18) Mark all correct statements.

A. applied cost is greater than the actual cost is called favorable
variance (missed)
B. applied cost is greater than the actual cost is called
unfavorable variance
C. Over applied FOH cost is one when applied FOH is more then actual
(missed)
D. Over applied FOH cost is one when applied FOH is less then actual
Un-Answered 56% answered this correctly. 44% answered wrong

Q.19) Prime Cost + Factory overhead = Factory cost

A. True (correct answer)
B. False
Un-Answered 69% answered this correctly. 31% answered wrong
Q.20) Semi Variable Cost also know as

A. variable cost
B. mixed cost (correct answer)
C. Step fixed cost
Explanation
Semi Variable Cost
It is also known as mixed cost. It is the cost which is part fixed and
par variable. It is in fact the
mixture of both behaviors.
Examples include: Utility bills – there is a fixed line rent plus
charges for units consumed.
Salesman’s salary – there is a fixed monthly salary plus commission
per units sold.
Un-Answered 45% answered this correctly. 55% answered wrong

Q.21) Which of the followings is an example of fixed cost

A. Direct material cost
B. Works manager’s salary
C. Depreciation of machinery (correct answer)
D. Chargeable expenses
Un-Answered 69% answered this correctly. 31% answered wrong

Q.22) _______ is a section of an organization that is responsible for
producing profit

A. Revenue Centre
B. Investment Centre
C. Profit Centre (correct answer)

Quiz Start Time: 03:59 PM 66
sec(s)


Question # 9 of 15 ( Start time: 04:06:20 PM ) Total Marks: 1
Where the applied FOH cost is less than the actual FOH cost it is:
Select correct option:

Unfavorable variance
Favorable variance
Normal variance
Budgeted variance








Quiz Start Time: 03:59 PM 64
sec(s)


Question # 10 of 15 ( Start time: 04:06:55 PM ) Total Marks: 1
Generally, the danger level of stock is fixed ________ the minimum
level.
Select correct option:

Below
Above
Equal
Danger level has no relation to minimum level








Quiz Start Time: 03:59 PM 69
sec(s)


Question # 11 of 15 ( Start time: 04:07:53 PM ) Total Marks: 1
Cost of Goods Manufactured can be calculated as follow
Select correct option:

Total factory Cost Add Opening Work in process inventory Less
Closing Work in process inventory
Total factory Cost Less Opening Work in process inventory Add
Closing Work in process inventory
Total factory Cost Less Opening Work in process inventory Less
Closing Work in process inventory
Total factory Cost Add Opening Work in process inventory Add Closing
Work in process inventory








Quiz Start Time: 03:59 PM 81
sec(s)


Question # 12 of 15 ( Start time: 04:09:16 PM ) Total Marks: 1
Under LIFO method the value of issues is close to:
Select correct option:

Second hand price
Current market price
Historical cost
All of given options








Quiz Start Time: 03:59 PM 71
sec(s)


Question # 13 of 15 ( Start time: 04:10:37 PM ) Total Marks: 1
What will be the impact of normal loss on the overall per unit cost?
Select correct option:

Per unit cost will increase
Per unit cost will decrease
Per unit cost remain unchanged
Normal loss has no relation to unit cost








Quiz Start Time: 03:59 PM


Question # 14 of 15 ( Start time: 04:11:12 PM ) Total Marks: 1
Which of the following is/are not associated with ordering costs?
Select correct option:

Interest
Insurance
Opportunity costs
All of the given options








Quiz Start Time: 03:59 PM 68
sec(s)


Question # 15 of 15 ( Start time: 04:11:46 PM ) Total Marks: 1
PVC company has ordering quantity 10,000 units.They have storage
capacity 20,000 units,The average inventory would be:
Select correct option:

20,000
5,000
10,000
25,000




Q.1) _________________ is a Predetermine cost of the units.

A. Standard cost (correct answer)
B. Implicit Cost
C. Product Cost
D. None
Explanation
The budgeted or planned cost of material, labour, or overheads
expected to be paid during a given accounting period.

standard cost- The normal or specified cost used as the basis for
measurement against an actual. Standard costs for manufactured items
include labor, material and overhead, and vendor acquisition, freight,
duty fees and other categories for purchased items
Un-Answered 34% answered this correctly. 66% answered wrong
Q.2) Cost Accounting deals with decisions relating to the generation &
effective utilization of the financial resources of an entity.

A. TRUE
B. FALSE (correct answer)
Explanation
Its done by Management Accounting
Un-Answered 85% answered this correctly. 15% answered wrong
Q.3) Indirect cost is also known as overhead cost.

A. True (correct answer)
B. False
Explanation
Indirect Cost/Overhead Cost
An indirect cost or overhead cost is a cost that is incurred in the
course of producing product or
rendering service, but which cannot be traced in the product or
service in full.
Expenditure incurred on labor, material or other services which cannot
be economically identified
with a specific cost product or service (cost unit).
Examples include:
Wages of supervisor, cleaning material, workshop insurance
Un-Answered 53% answered this correctly. 47% answered wrong

Q.4) Financial Accounting is a branch of management accounting.

A. TRUE (correct answer)
B. FALSE
Un-Answered 40% answered this correctly. 60% answered wrong
Q.5) Management Accounting deals with Ascertainment, Measurement,
Accumulation, Budgeting & Evaluating cost structure of the entity.

A. True
B. FALSE (correct answer)
Explanation
Its done by Cost Accounting
Un-Answered 63% answered this correctly. 37% answered wrong

Q.6) Direct Material + Direct Labor + other direct cost =

A. Prime Cost (correct answer)
B. Factory OverHead (FOH)
C. Conversion Cost
D. None
Un-Answered 67% answered this correctly. 33% answered wrong

Q.7) Cost is classified in _____________ categories.

A. 1
B. 2 (correct answer)
C. 3
D. 4
Un-Answered 75% answered this correctly. 25% answered wrong
Q.8) An investor invests in stock exchange he foregoes the opportunity
to invest further in his hotel. The profit which the investor will be
getting from the hotel is _________________.

A. opportunity cost (correct answer)
B. Period Cost
C. Product Cost
D. Historical Cost
Explanation
1. The cost of an alternative that must be forgone in order to pursue
a certain action. Put another way, the benefits you could have
received by taking an alternative action.

2. The difference in return between a chosen investment and one that
is necessarily passed up. Say you invest in a stock and it returns a
paltry 2% over the year. In placing your money in the stock, you gave
up the opportunity of another investment - say, a risk-free government
bond yielding 6%. In this situation, your opportunity costs are 4% (6%
- 2%)
Un-Answered 42% answered this correctly. 58% answered wrong

Q.9) Direct Labour + Other Direct Cost + FOH =

A. Prime Cost
B. Factory OverHead (FOH)
C. Conversion Cost (correct answer)
D. None
Un-Answered 34% answered this correctly. 66% answered wrong

Q.10) accounting is always a language of business

A. TRUE
B. FALSE (correct answer)
Un-Answered 61% answered this correctly. 39% answered wrong

Q.11) If Direct Material = 12,000
Direct Labor = 8000
other Direct Cost = 2000 then what will be the Prime Cost?

A. 12000
B. 14000
C. 20000
D. 22000 (correct answer)
Un-Answered 65% answered this correctly. 35% answered wrong
Q.12) _________________ is the cost that is subject to actual payment
or will be paid for in future.

A. Implicit Cost
B. Explicit Cost (correct answer)
Explanation
A business expense that is easily identified and accounted for.
Explicit costs represent clear, obvious cash outflows from a business
that reduce its bottom-line profitability. This contrasts with less-
tangible expenses such as goodwill amortization, which are not as
clear cut regarding their effects on a business's bottom-line value
Good examples of explicit costs would be items such as wage expense,
rent or lease costs, and the cost of materials that go into the
production of goods. With these expenses, it is easy to see the source
of the cash outflow and the business activities to which the expense
is attributed
Un-Answered 44% answered this correctly. 56% answered wrong

Q.13) Cost Accounting is an art of Recording , Classifying,
summarizing, Reporting, Interpreting of the Financial Information.

A. TRUE
B. FALSE (correct answer)
Un-Answered 20% answered this correctly. 80% answered wrong

Q.14) Accounting is a language of ________________.

A. Accountants
B. Mathematics
C. Mathematics (correct answer)
D. NONE
Un-Answered 73% answered this correctly. 27% answered wrong
Q.15) A firm Uses its own capital or Uses its owner's time and/or
financial resources both are examples of ____________

A. Implicit Cost (correct answer)
B. Explicit Cost
Explanation
A cost that is represented by lost opportunity in the use of a
company's own resources, excluding cash
These are intangible costs that are not easily accounted for. For
example, the time and effort that an owner puts into the maintenance
of the company rather than working on expansion
Un-Answered 81% answered this correctly. 19% answered wrong

Q.16) Cost is expenditure incurred.

A. TRUE (correct answer)
B. FALSE
Un-Answered 59% answered this correctly. 41% answered wrong

Q.17) Accounting has ____________ branches

A. 1
B. 2
C. 3 (correct answer)
D. 4
Un-Answered 89% answered this correctly. 11% answered wrong

Q.18) Cost that can be traced in full to the product or services is
called

A. Direct Cost (correct answer)
B. Indirect Cost
Un-Answered 55% answered this correctly. 45% answered wrong

Q.19) ____________ is verifiable through invoices/agreements.

A. Opportunity Cost
B. Product Cost
C. Period Cost
D. Historical Cost (correct answer)
Un-Answered 53% answered this correctly. 47% answered wrong
Q.20) Wage, Rent & Materials are examples of ____________.

A. Implicit Cost
B. Explicit Cost (correct answer)
Explanation
A business expense that is easily identified and accounted for.
Explicit costs represent clear, obvious cash outflows from a business
that reduce its bottom-line profitability. This contrasts with less-
tangible expenses such as goodwill amortization, which are not as
clear cut regarding their effects on a business's bottom-line value
Good examples of explicit costs would be items such as wage expense,
rent or lease costs, and the cost of materials that go into the
production of goods. With these expenses, it is easy to see the source
of the cash outflow and the business activities to which the expense
is attributed