Cost and Managerial Accounting

121. Calculate workers left and discharged from the following: Labour turnover rates are 20%, 10% and 6% respectively under Flux method, Replacement method and Separation method. No. of workers replaced during the quarter is 80.

  1. 112
  2. 80
  3. 48
  4. 64
Correct answer: (C)
48

122. Allotment of whole item of cost to a cost centre or cost unit is known as:

  1. Cost Apportionment
  2. Cost Allocation
  3. Cost Absorption
  4. Machine hour rate
Correct answer: (B)
Cost Allocation

123. CG Co manufactures a single product T. Budgeted production output of product T during June is 200 units. Each unit of product T requires 6 labour hours for completion and CG Co anticipates 20 per cent idle time. Labour is paid at a rate of Rs7 per hour. The direct labour cost budget for March is

  1. Rs 6,720
  2. 8,400
  3. 10,080
  4. 10,500
Correct answer: (D)
10,500

124. The P/v ratio of a company is 50% and margin of safety is 40%. If present sales is Rs. 30,00,000 then Break Even Point in Rs. will be

  1. Rs. 9,00,000
  2. Rs. 18,00,000
  3. Rs. 5,00,000
  4. None of the above
Correct answer: (B)
Rs. 18,00,000

125. ABC analysis is an inventory control technique in which:

  1. Inventory levels are maintained
  2. Inventory is classified into A, B and C category with A being the highest quantity, lowest value.
  3. Inventory is classified into A, B and C Category with A being the lowest quantity, highest value
  4. Either b or c.
Correct answer: (C)
Inventory is classified into A, B and C Category with A being the lowest quantity, highest value

126. Calculate the value of closing stock from the following according to FIFO method:
1st January, 2014: Opening balance: 50 units @ Rs. 4
Receipts:
5th January, 2014: 100 units @ Rs. 5
12th January, 2014: 200 units @ Rs. 4.50
Issues:
2nd January, 2014: 30 units
18th January, 2014: 150 units

  1. Rs. 765
  2. Rs. 805
  3. Rs. 786
  4. Rs. 700
Correct answer: (A)
Rs. 765

127. Service departments costs should be allocated to:

  1. Only Service departments
  2. Only Production departments
  3. Both Production and service departments
  4. None of the production and service departments
Correct answer: (C)
Both Production and service departments

128. Which of the following would explain an adverse variable production overhead efficiency variance?

  1. Employees were of a lower skill level than specified in the standard
  2. Unexpected idle time resulted from a series of machine breakdown
  3. Poor Quality material was difficult to process
  1. (1), (2) and (3)
  2. (1) and (2)
  3. (2) and (3)
  4. (1) and (3)
Correct answer: (D)
(1) and (3)

129. Which of the following statements is/are correct?

  1. A materials requisition note is used to record the issue of direct material to a specific job.
  2. A typical job cost will contain actual costs for material, labour and production overheads, and non –production overheads are often added as a percentage of total production cost
  3. The job costing method can be applied in costing batches
  1. (1) only
  2. (1) and (2) only
  3. (1) and (3) only
  4. (2) and (3) only
Correct answer: (C)
(1) and (3) only

130. A job is budgeted to require 3,300 productive hours after incurring 25% idle time. If the total labour cost budgeted for the job is Rs36,300. What is the labour cost per hour( to the nearest cent)?

  1. Rs 8.25
  2. Rs 8.80
  3. Rs 11.00
  4. Rs 14.67
Correct answer: (A)
Rs 8.25
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