Accounting For Managers

171. Calculate the prime cost from the following information:
Direct material purchased: Rs. 1,00,000
Direct material consumed: Rs. 90,000
Direct labour: Rs. 60,000
Direct expenses: Rs. 20,000
Manufacturing overheads: Rs. 30,000

  1. Rs. 1,80,000
  2. Rs. 2,00,000
  3. Rs. 1,70,000
  4. Rs. 2,10,000
Correct answer: (C)
Rs. 1,70,000

172. Aggregate of cost of goods sold and selling and distribution overheads is known as:

  1. Total Cost
  2. Office Cost
  3. Cost of sales
  4. Selling overhead
Correct answer: (A)
Total Cost

173. Cost accounting information can be used for:

  1. Budget control and evaluation.
  2. Determining standard costs and variances.
  3. Pricing and inventory valuation decisions.
  4. All of these
Correct answer: (D)
All of these

174. Which one of the following would not be classified as manufacturing overhead?

  1. Indirect labour
  2. Direct materials
  3. Insurance on factory building
  4. Indirect materials
Correct answer: (B)
Direct materials

175. A manufacturing process requires small amounts of glue. The glue used in the process is classified as

  1. A prime cost
  2. An indirect material
  3. A direct material
  4. Miscellaneous expense
Correct answer: (B)
An indirect material

176. Lubricants, used regularly in a production process, are classified as

  1. Miscellaneous expense
  2. Direct materials
  3. Indirect materials
  4. Immaterial items
Correct answer: (C)
Indirect materials

177. Manufacturing costs are also known as product costs. Which of the following best describes those costs which are considered to be manufacturing costs?

  1. Direct materials, direct labor, and factory overhead.
  2. Direct materials and direct labor only.
  3. Direct materials, direct labor, factory overhead, and administrative overhead.
  4. Direct labor and factory overhead.
Correct answer: (C)
Direct materials, direct labor, factory overhead, and administrative overhead.

178. Accounting principles are ______________ which are adopted by the accountant universally while recording accounting transaction.

  1. Rules of action or conduct
  2. Which u can change as per accountant
  3. Which keep changing every year
  4. None of these
Correct answer: (C)
Rules of action or conduct

179. Showing purchased office equipments in financial statements is the application of which accounting concept?

  1. Historical cost convention
  2. Materiality
  3. Prudence
  4. Matching concept
Correct answer: (B)
Materiality

180. Which of the following should not be called sales?

  1. Good sold on credit
  2. Office fixtures sold
  3. Sale of item previously included in purchase
  4. Good sold for cash
Correct answer: (A & B)
Good sold on credit & Office fixtures sold
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