Cost and Managerial Accounting

491. Which of the following bases would be most appropriate to apportion the cost of electric power to factory departments?

  1. Number of outlet points
  2. Amount metered out
  3. Cubic capacity of premises
  4. Kilowatt capacity of machines in department
Correct answer: (B)
Amount metered out

492. A management consultancy recovers overheads on chargeable consulting hours. Budgeted overheads were 6,15,000 and actual consulting hours were 32,150. Overheads, were under recovered by 35,000. If actual overheads, were 6,94,075, what was the budgeted overhead absorption rate per hour?

  1. 19.13
  2. 20.50
  3. 21.59
  4. 22.68
Correct answer: (B)
20.50

493. Opportunity cost is the best example of:

  1. Sunk Cost
  2. Standard Cost
  3. Relevant Cost
  4. Irrelevant Cost
Correct answer: (C)
Relevant Cost

494. An investor invests in stock exchange he foregoes the opportunity to invest further in his hotel. The profit which the investor will be getting from the hotel is ______________.

  1. Opportunity cost
  2. Period Cost
  3. Product Cost
  4. Historical Cost
Correct answer: (A)
Opportunity cost

495. Cost of Goods Manufactured can be calculated as follow

  1. Total factory Cost Add Opening Work in process inventory Less Closing Work in process inventory
  2. Total factory Cost Less Opening Work in process inventory Add Closing Work in process inventory
  3. Total factory Cost Less Opening Work in process inventory Less Closing Work in process inventory
  4. Total factory Cost Add Opening Work in process inventory Add Closing Work in process inventory
Correct answer: (A)
Total factory Cost Add Opening Work in process inventory Less Closing Work in process inventory

496. Which of the following is / are element / s of production payroll?

  1. Direct labor force wages
  2. Administrative wages
  3. Selling wages
  4. All of the given options
Correct answer: (D)
All of the given options

497. When a manufacturing Company has highly automated manufacturing plant producing many different products, the most appropriate basis for applying FOH cost to work in process is:

  1. Direct labor hours
  2. Direct labor costs
  3. Machine hours
  4. Cost of material used
Correct answer: (B)
Direct labor costs

498. Which of the following is not a method of pricing raw material issues from stock?

  1. Standard costing.
  2. Unit cost.
  3. Marginal cost.
  4. Continuous weighted average.
Correct answer: (C)
Marginal cost.

499. Marginal costing is also known as:

  1. Indirect costing
  2. Direct costing
  3. Variable costing
  4. Both (b) and (c)
Correct answer: (D)
Both (b) and (c)

500. Fixed cost per unit decreases when:

  1. Production volume increases.
  2. Production volume decreases.
  3. Variable cost per unit decreases.
  4. Variable cost per unit increases.
Correct answer: (A)
Production volume increases.
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