Cost and Managerial Accounting

501. Which would be an implicit cost for a firm? The cost:

  1. Of worker wages and salaries for the firm.
  2. Paid for leasing a building for the firm.
  3. Paid for production supplies for the firm.
  4. Of wages foregone by the owner of the firm.
Correct answer: (D)
Of wages foregone by the owner of the firm.

502. The factors to be taken into consideration in formulating incentive schemes include:

  1. Quantity and quality of output
  2. Incidence of overhead, and effect upon workers
  3. Simplicity and legal provisions
  4. All of the above
Correct answer: (D)
All of the above

503. 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

504. If there has been an over recovery of overheads, at the end of the accounting period the amount concerned should be?

  1. Debited to the company profit and loss account.
  2. Credited to the company profit and loss account.
  3. Carried forward to the next accounting period as a cost saving.
  4. Used to reduce next period's overhead recovery rate.
Correct answer: (B)
Credited to the company profit and loss account.

505. the term ‗contribution' refers to?

  1. The actual amount of profit made per unit.
  2. The budgeted profit per unit.
  3. The amount of profit which goes towards meeting the overheads of the business.
  4. The difference between sales revenue and variable costs per unit.
Correct answer: (D)
The difference between sales revenue and variable costs per unit.

506. Cost accountancy is the science, art and ______________ of cost accountant.

  1. Profession
  2. Management
  3. Administration
  4. Practice
  5. All of these
Correct answer: (D)
Practice

507. Cost accounting is based on ______________ figures.

  1. Approximated
  2. Estimated
  3. Historical
  4. Either (a) or (c)
  5. None of these
Correct answer: (B)
Estimated

508. Depreciation is ______________ expenditure.

  1. variable
  2. Fixed
  3. Direct
  4. Indirect
  5. Semi-variable
Correct answer: (E)
Semi-variable

509. The quantity of material to be ordered at one time is known as

  1. EOQ
  2. BOQ
  3. EBQ
  4. Re-order period
  5. All of these
Correct answer: (A)
EOQ

510. Which of the following is not a relevant cost information in a make or buy decision?

  1. Variable cost of making
  2. General fixed cost
  3. Purchase price
  4. Loss of contribution to make the product
Correct answer: (B)
General fixed cost
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