Cost and Managerial Accounting

441. If time allowed for a job is 10 hours, time taken for the job is 8 hours and rate of pay is 2 per hour, the bonus to the worker is:

  1. 1.20
  2. 2.00
  3. 3.20
  4. None of the above
Correct answer: (C)
3.20

442. Wages analysis include:

  1. Gross wages per product
  2. Gross wages per operation or department
  3. Gross wages per labour classification
  4. Analysis of constituent of gross wages - direct/ lost time
Correct answer: (A)
Gross wages per product

443. Which of the following systems of inventory valuation computes cost of goods sold as a residual amount?

  1. Weighted Average.
  2. Last-in-First-out.
  3. Periodic Inventory System.
  4. Specific Identification.
Correct answer: (C)
Periodic Inventory System.

444. Example of semi-variable items include the following except:

  1. Telephone
  2. Repairs and maintenance
  3. Depreciation of plant and machinery
  4. Insurance of plant and building
Correct answer: (D)
Insurance of plant and building

445. (1) Departmentalization of items of costs is known as primary distribution.
(2) Redistribution of service departments, costs is known as secondary distribution. True or false?

  1. (1) and (2) true
  2. (1) and (2) false
  3. (1) False; (2) True
  4. (1) True; (2) False
Correct answer: (A)
(1) and (2) true

446. Which of the following is not a means whereby factory overheads can be charged out to production?

  1. Direct labour rate
  2. Overtime rate
  3. Machine hour rate
  4. Blanket rate
Correct answer: (B)
Overtime rate

447. Maximum capacity of a plant refers to its:

  1. Theoretical capacity
  2. Normal capacity
  3. Practical capacity
  4. Capacity based on sales expectancy
Correct answer: (A)
Theoretical capacity

448. Alpha company purchased a machine worth Rs 200,000 in the last year. Now that machine can be use in a new project which company has received this year. Now the cost of that machine is to be called:

  1. Project cost
  2. Sunk cost
  3. Opportunity cost
  4. Relevant cost
Correct answer: (D)
Relevant cost

449. The Hino Corporation has a breakeven point when sales are 160,000 and variable costs at that level of sales are 100,000. How much would contribution margin increase or decrease, if variable expenses dropped by 20,000?

  1. 37.5%.
  2. 60%.
  3. 12.5%.
  4. 26%
Correct answer: (C)
12.5%.

450. The FIFO inventory costing method (when using a perpetual inventory system) assumes that the cost of the earliest units purchased is allocated in which of the following ways?

  1. First to be allocated to the ending inventory
  2. Last to be allocated to the cost of goods sold
  3. Last to be allocated to the ending inventory
  4. First to be allocated to the cost of goods sold
Correct answer: (D)
First to be allocated to the cost of goods sold
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