Cost and Managerial Accounting

41. Which of these is not a Material control technique:

  1. ABC Analysis
  2. Fixation of raw material levels
  3. Maintaining stores ledger
  4. Control over slow moving and non moving items
Correct answer: (C)
Maintaining stores ledger

42. Which one out of the following is not an inventory valuation method?

  1. FIFO
  2. LIFO
  3. Weighted Average
  4. EOQ
Correct answer: (D)
EOQ

43. Cost of abnormal wastage is:

  1. Charged to the product cost
  2. Charged to the profit & loss account
  3. charged partly to the product and partly profit & loss account
  4. not charged at all.
Correct answer: (B)
Charged to the profit & loss account

44. Costs associated with the labour turnover can be categorised into:

  1. Preventive Costs only
  2. Replacement costs only
  3. Both of the above
  4. Machine costs
Correct answer: (C)
Both of the above

45. A worker is allowed 60 hours to complete the job on a guaranteed wage of Rs. 10 per hour. Under the Rowan Plan, he gets an hourly wage of Rs. 12 per hour. For the same saving in time, how much he will get under the Halsey Plan?

  1. Rs. 720
  2. Rs. 540
  3. Rs. 600
  4. Rs. 900
Correct answer: (B)
Rs. 540

46. During September, 300 labour hours were worked for a total cost of Rs 4800. The variable overhead expenditure variance was Rs 600 (A). Overheads are assumed to be related to direct labour hours of active working.

What was the standard cost per labour hour?

  1. Rs 14
  2. Rs 16.50
  3. Rs 17.50
  4. Rs 18
Correct answer: (A)
Rs 14

47. A Local Authority is preparing cash Budget for its refuse disposal department. Which of the following items would not be included in the cash budget?

  1. Capital cost of a new collection vehicle
  2. Depreciation of the machinery
  3. Operatives wages
  4. Fuel for the collection Vehicles
Correct answer: (B)
Depreciation of the machinery

48. A ltd is a manufacturing company that has no production resource limitations for the foreseeable future. The Managing Director has asked the company mangers to coordinate the preparation of their budgets for the next financial year. In what order should the following budgets be prepared?

  1. Sales budget
  2. Cash budget
  3. Production budget
  4. Purchase budget
  5. Finished goods inventory budget
  1. (2), (3), (4), (5), (1)
  2. (1), (5), (3), (4), (2)
  3. (1), (4), (5), (3), (2)
  4. (4), (5), (3), (1), (2)
Correct answer: (B)
(1), (5), (3), (4), (2)

49. A process costing system for J Co used an input of 3,500Kg of materials at Rs20 per Kg and labour hours of 2,750 at Rs25 per hour. Normal loss is 20% and losses can be sold at a scrap value of Rs5per Kg. Output was 2,950 Kg. What is the value of the output?

  1. Rs 142,485
  2. Rs 146,183
  3. Rs 149,746
  4. Rs 152,986
Correct answer: (A)
Rs 142,485

50. State which of the following are the characteristics of service costing.

  1. High levels of indirect costs as a proportion of total costs
  2. Use of composite cost units
  3. Use of equivalent units
  1. (1) only
  2. (1) and (2) only
  3. (2) only
  4. (2) and (3) only
Correct answer: (B)
(1) and (2) only
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