FINAL TERM EXAMINATION
Spring 2010
MGT402- Cost & Management Accounting (Session - 2)
Time: 90 min
Marks: 69
Question No: 1 ( Marks: 1 ) - Please choose one
Superior Products makes a special ski. Next year Superior Superior
► 137,000 lbs
► 140,000 lbs
► 158,000 lbs
► 160,000 lbs
Question No: 2 ( 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: 3 ( Marks: 1 ) - Please choose one
Consider the following data:
Particulars | Rs. |
Raw material inventory beginning | 14,000 |
Purchases of Raw materials | 120,000 |
Raw material inventory Ending | 10,000 |
Direct labor | 200,000 |
Manufacturing Overhead (actual) | 402,000 |
Manufacturing Overhead (applied) | 404,000 |
What is the amount of under or over applied manufacturing overhead cost?
► Over applied Rs. 2,000
► Over applied Rs. 3,000
► Under applied Rs. 3,000
► Under applied Rs. 2,000
Question No: 4 ( Marks: 1 ) - Please choose one
Which of the following is calculated by a formula that uses net sales as denominator?
► Inventory turnover ratio
► Gross profit rate
► Return on Investment
► None of the given options
Question No: 5 ( Marks: 1 ) - Please choose one
An average cost is also known as:
► Variable cost
► Unit cost
► Total cost
► Fixed cost
Question No: 6 ( Marks: 1 ) - Please choose one
Finished goods inventory costs represent the costs of goods that are:
► Currently being worked on
► Waiting to be worked on
► Waiting to be sold
► Already delivered to customers
Question No: 7 ( Marks: 1 ) - Please choose one
If, Basic SalaryRs.10,000
Per Piece commission Rs. 5
Unit sold700 pieces
Amount of commission received will be:
► Rs. 3,500
► Rs. 13,500
► Rs. 10,000
► Rs. 6,500
Question No: 8 ( 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: 9 ( Marks: 1 ) - Please choose one
In order to compute equivalent units of production, which of the following must be reasonably estimated?
► Units
► The percentage of completion
► Direct material cost
► Units started and completed
Question No: 10 ( 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: 11 ( Marks: 1 ) - Please choose one
Variable costing is also known as:
► Direct Costing
► Marginal Costing
► Both Direct Costing & Marginal Costing
► Indirect Costing
Question No: 12 ( Marks: 1 ) - Please choose one
Hyde Park Company produces sprockets that are used in wheels. Each sprocket sells for Rs. 50 and the company sells approximately 400,000 sprockets each year. Unit cost data for the year follows:
Direct material | Rs. 15 | |
Direct labor | Rs. 10 | |
Other cost: Manufacturing Distribution | Fixed Rs. 5 Rs. 4 | Variable Rs. 7 Rs. 3 |
Required: Identify the unit cost of sprockets under direct costing
► Rs. 44
► Rs. 37
► Rs. 32
► Rs. 35
Question No: 13 ( Marks: 1 ) - Please choose one
If the selling price and the variable cost per unit both decrease at10% and fixed costs do not change, what is the effect on the contribution margin per unit and the contribution margin ratio?
► Contribution margin per unit and the contribution margin ratio both remains unchanged
► Contribution margin per unit and the contribution margin ratio both increases
► Contribution margin per unit decreases and the contribution margin ratio remains unchanged
► Contribution margin per unit increases and the contribution margin ratio remains unchanged
Question No: 14 ( Marks: 1 ) - Please choose one
Janet sells a product for Rs. 6.25. The variable costs are Rs. 3.75. Janet's break-even units are 35,000. What is the amount of fixed costs?
► Rs. 87,500
► Rs. 35,000
► Rs.131,250
► Rs. 104,750
Question No: 15 ( Marks: 1 ) - Please choose one
All of the following are the objectives of budgeting EXCEPT:
► Maximization of sales
► Profit maximization
► Compete with competitors
► Increased cost
Question No: 16 ( Marks: 1 ) - Please choose one
Consider the following data for the month of January:
Sales 600 units
Opening stock 80 units
If the closing stock has to be 50% higher than the previous month then production will have to be:
► 700 units
► 720 units
► 640 units
► 600 units
Question No: 17 ( Marks: 1 ) - Please choose one
Which of the following is a reason of main difference between production budget and Production cost budget?
► Production budget is constructed in units
► Production budget is constructed in Rs.
► Production cost budget is constructed in units
► Both are same budgets
Question No: 18 ( Marks: 1 ) - Please choose one
Which of the following budget is the most important in service organizations?
► Production budget
► Merchandise purchases budget
► Direct labor budget
► Direct materials budget
Question No: 19 ( Marks: 1 ) - Please choose one
Which of the following would be found in a cash budget?
► Depreciation
► Accrued expenditure
► Provision for doubtful debts
► Capital expenditure
Question No: 20 ( Marks: 1 ) - Please choose one
Which of the following is not true about differential costs?
► It is a broader concept than variable cost as it takes into account additional fixed costs caused by management decisions
► With the passage of time and change in situation, differential costs will vary
► The difference in cost between buying them from outside or make them in the company is differential cost, irrelevant for decisions
► They are extra or incremental costs caused by a particular decision
Question No: 21 ( Marks: 1 ) - Please choose one
In short term decision making which of the following is not concerned?
► Cash flows
► Time value of money
► Pay back period
► Capital investments
Question No: 22 ( Marks: 1 ) - Please choose one
Optimum production plan is based on which of the following factor(s)?
► Identify the limiting factor
► Calculate contribution per unit of limiting factor
► Calculate contribution per unit for each product
► All of the given options
Question No: 23 ( Marks: 1 ) - Please choose one
Which of the following is NOT an assumption of the basic economic-order quantity model?
► Annual demand is known
► Ordering cost is known
► Carrying cost is known
► Quantity discounts are available
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