Cost and Managerial Accounting

401. Over applied FOH will always result when a predetermined FOH rate is applied and:

  1. Production is greater than defined capacity
  2. Actual overhead costs are less than budgeted overhead
  3. Budgeted capacity is less than normal capacity
  4. Actual overhead incurred is less than applied Overhead
Correct answer: (D)
Actual overhead incurred is less than applied Overhead

402. ______________ is the time worked over and above the employee's basic working week.

  1. Flex time
  2. Overtime
  3. Shift allowance
  4. Commission
Correct answer: (B)
Overtime

403. Which of the following is a mechanical device to record the exact time of the workers?

  1. Clock Card
  2. Store Card
  3. Token System
  4. Attendance Register
Correct answer: (A)
Clock Card

404. In order to ensure efficient functioning of the stores department and steady flow of materials to the production departments, the restocking of stores is duty of:

  1. Managers
  2. Storekeeper
  3. Production In charge
  4. Sales supervisor
Correct answer: (B)
Storekeeper

405. A high inventory turnover may indicate:

  1. An efficient use of the investment in inventory
  2. A high risk of stock-outs
  3. Stock position of store room
  4. All of the given options
Correct answer: (A)
An efficient use of the investment in inventory

406. The Term Minimum Level Represents.

  1. The quantity below which the stock of any item should not be allowed to fall
  2. The quantity below which the stock of any item should be allowed to fall
  3. The estimated time period in number of days or in weeks or in months.
  4. The Lead time period in number of days or in weeks or in months.
Correct answer: (A)
The quantity below which the stock of any item should not be allowed to fall

407. Which of the following is likely to be classified as a direct material cost of a motor car wheel?

  1. The metal used to manufacture it.
  2. The metal used to manufacture one of the tools used in the car wheel factory.
  3. The cost of operating the raw material stores in the factory.
  4. The cost of the quality operation on the finished car wheels.
Correct answer: (A)
The metal used to manufacture it.

408. What is the company's contribution margin ratio?

  1. 30%
  2. 50%
  3. 150%
  4. None of given options
Correct answer: (B)
50%

409. The margin of safety can be defined as:

  1. The excess of budgeted or actual sales over budgeted or actual variable expenses
  2. The excess of budgeted or actual sales over budgeted or actual fixed expenses
  3. The excess of budgeted sales over the break-even volume of sales
  4. The excess of budgeted net income over actual net income
Correct answer: (C)
The excess of budgeted sales over the break-even volume of sales

410. The break-even point in units is calculated using ______________

  1. Fixed expenses and the contribution margin ratio
  2. Variable expenses and the contribution margin ratio
  3. Fixed expenses and the unit contribution margin
  4. Variable expenses and the unit contribution margin
Correct answer: (C)
Fixed expenses and the unit contribution margin
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