Cost and Managerial Accounting

391. Which of the following does not match? Item of cost Basis of cost allocation

  1. Power H.P. of machine
  2. Supervision of building value of materials consumed
  3. Insurance of building area occupied
  4. Time-keeping number of employees
Correct answer: (B)
Supervision of building value of materials consumed

392. Which of the following costs is not a factory overhead expense?

  1. Depreciation of equipment used in the research department
  2. Salary of quality control inspector
  3. Overtime premium paid to direct labour
  4. Machine maintenance labour cost
Correct answer: (A)
Depreciation of equipment used in the research department

393. The process of cost apportionment is carried out so that:

  1. Costs may be controlled
  2. Cost units gather overheads as they pass through cost centres
  3. Whole items of cost can be charged to cost centres
  4. Common costs are shared among cost centres
Correct answer: (D)
Common costs are shared among cost centres

394. Idle capacity of a plant is defined as the difference between:

  1. Practical capacity and normal capacity
  2. Practical capacity and capacity based on sale expectancy
  3. Maximum capacity and actual capacity
  4. Maximum capacity and practical capacity
Correct answer: (B)
Practical capacity and capacity based on sale expectancy

395. What will be the impact of normal loss on the overall per unit cost?

  1. Per unit cost will increase
  2. Per unit cost will decrease
  3. Per unit cost remain unchanged
  4. Normal loss has no relation to unit cost
Correct answer: (A)
Per unit cost will increase

396. Under perpetual Inventory system at the end of the year:

  1. No closing entry passed
  2. Closing entry passed
  3. Closing value find through closing entry only
  4. None of the above.
Correct answer: (A)
No closing entry passed

397. The components of factory overhead are as follows:

  1. Direct material + indirect material + direct expenses
  2. Indirect material + Indirect labor + others indirect cost
  3. Direct material + indirect expenses + indirect labor
  4. Direct labor + indirect labor + indirect expenses
Correct answer: (B)
Indirect material + Indirect labor + others indirect cost

398. A firm Uses its own capital or Uses its owner's time and/or financial resources both are examples of

  1. Implicit Cost
  2. Explicit Cost
  3. Sunk Cost
  4. Relevant Cost
Correct answer: (A)
Implicit Cost

399. Generally, the danger level of stock is fixed ______________ the minimum level

  1. Below
  2. Above
  3. Equal
  4. Danger level has no relation to minimum level
Correct answer: (B)
Above

400. Sales are 450,000. Beginning finished goods were 23,000. Ending finished goods are 30,000. The cost of goods sold is 300,000. What is the cost of goods manufactured?

  1. 323,000
  2. 330,000
  3. 293,000
  4. None of the given options
Correct answer: (D)
None of the given options
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