Cost and Managerial Accounting

511. In a shutdown decision, one has to consider:

  1. Contribution
  2. Identifiable fixed cost, if any
  3. Impact of shutdown on other products, if any
  4. All of the above
Correct answer: (D)
All of the above

512. The firms monthly cost of production is 1,46,000 at an output level of 8,000 units. If it achieves an output level of 12,000 units it will incur production cost of 1,94,000 cost of production for 15,000 units is

  1. 1,80,000
  2. 2,00,000
  3. 50,000
  4. 2,30,000
Correct answer: (D)
2,30,000

513. Angle of incidence defines:

  1. Systematic risk in CAPM model
  2. Post BEP relationship between total cost and total revenue
  3. Incidental factors in investments
  4. Marginal cost of production
Correct answer: (B)
Post BEP relationship between total cost and total revenue

514. If you know that with 8 units of output, average fixed cost is 12.50 and average variable cost is 81.25, then total cost at this output level is:

  1. 93.75.
  2. 97.78.
  3. 750.
  4. 880.
Correct answer: (C)
750.

515. For exercising control over selling and distribution overheads, the following techniques may be used:

  1. Comparison with past results
  2. Budgetary control
  3. Standard costing
  4. All of the above
Correct answer: (D)
All of the above

516. Types of maintenance include the following except:

  1. Routine
  2. Overhaul
  3. Emergency
  4. Periodic
Correct answer: (B)
Overhaul

517. Which of the following is not a possible method of accounting for administration overheads?

  1. Include as part of production overheads
  2. Apportion to production, selling and distribution functions
  3. Treat administration as a separate entity and treat the costs as such
  4. Transfer to costing profit and loss account
Correct answer: (A)
Include as part of production overheads

518. Overtime premium may be treated, depending on the circumstances, as:

  1. Part of direct wages
  2. Part of production overheads
  3. Part of capital order
  4. All of the above
Correct answer: (D)
All of the above

519. Preventive costs of labour turnover include the following except:

  1. Cost of recruitment and training
  2. Medical services
  3. Welfare
  4. Gratuity and pension
Correct answer: (A)
Cost of recruitment and training

520. Cost of production is equal to

  1. Prime costs+ other manufacturing costs.
  2. Production costs + Administration expenses.
  3. Prime costs + Manufacturing costs + Opening W.I.P - Closing W.I.P.
  4. None of the above.
Correct answer: (D)
None of the above.
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