Cost and Managerial Accounting

31. The the main difference between the profit center and investment center is

  1. Decision making
  2. Revenue generation
  3. Cost in occurrence
  4. Investment
Correct answer: (A)
Decision making

32. The main purpose of cost accounting is to ______________

  1. Maximize profits
  2. Help in inventory valuation
  3. Provide information to management for decision making
  4. Aid in the fixation of selling price
Correct answer: (C)
Provide information to management for decision making

33. Find the value of purchases if Raw material consumed Rs. 90,000; Opening and closing stock of raw material is Rs. 50,000 and 30,000 respectively.

  1. Rs. 10,000
  2. Rs. 20,000
  3. Rs. 70,000
  4. Rs. 1,60,000
Correct answer: (C)
Rs. 70,000

34. The following is the Corporation's Income Statement for last month: Particular Rs. Sales 4,000,000 Less: variable expenses 2,800,000 Contribution margin 1,200,000 Liss: fixed expenses 720,000 Net income 480,000 The company has no beginning or ending inventories. A total of 80,000 units were produced and sold last month. (Q.no. 36-39) What is the company's contribution margin ratio?

What is the company's break-even in units?

  1. 48,000 units
  2. 72,000 units
  3. 80,000 units
  4. None of the given options
Correct answer: (A)
48,000 units

35. Period costs are ______________

  1. Expensed when the product is sold
  2. Included in the cost of goods sold
  3. Related to specific Period
  4. Not expensed
Correct answer: (C)
Related to specific Period

36. Examples of industries that would use process costing include all of the following EXCEPT

  1. Beverages
  2. Food
  3. Hospitality
  4. Petroleum
Correct answer: (C)
Hospitality

37. Annual requirement is 7800 units; consumption per week is 150 units. Unit price Rs 5, order cost Rs 10 per order. Carrying cost Rs 1 per unit and lead time is 3 week, The Economic order quantity would be ______________

  1. 365 units
  2. 300 units
  3. 250 units
  4. 150 units
Correct answer: (A)
365 units

38. A An organization sold units 4000 and have closing finished goods 3500 units and opening finished goods units were 1000.The quantity of unit produced would be ______________

  1. 7500 units
  2. 6500 units
  3. 4500 units
  4. 5500 units
Correct answer: (B)
6500 units

39. Which of these is not an objective of Cost Accounting?

  1. Ascertainment of Cost
  2. Determination of Selling Price
  3. Cost Control and Cost reduction
  4. Assisting Shareholders in decision making
Correct answer: (D)
Assisting Shareholders in decision making

40. Describe the cost unit applicable to the Bicycle industry:

  1. per part of bicycle
  2. per bicycle
  3. per tonne
  4. per day
Correct answer: (B)
per bicycle
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