Cost and Managerial Accounting

531. What is the company's break-even in units?

  1. 48,000 units
  2. 72,000 units
  3. 80,000 units
  4. None of the given options
Correct answer: (D)
None of the given options

532. The contribution margin ratio is calculated by using which one of the given formula?

  1. (Sales - Fixed Expenses)/Sales
  2. (Sales - Variable Expenses)/Sales
  3. (Sales - Total Expenses)/Sales
  4. None of the given options
Correct answer: (B)
(Sales - Variable Expenses)/Sales

533. Which of the following represents a CVP equation?

  1. Sales = Contribution margin (Rs.) + Fixed expenses + Profits
  2. Sales = Contribution margin ratio + Fixed expenses + Profits
  3. Sales = Variable expenses + Fixed expenses + profits
  4. Sales = Variable expenses -Fixed expenses + profits
Correct answer: (C)
Sales = Variable expenses + Fixed expenses + profits

534. ______________ method assumes that the goods received most recently in the stores or produced recently are the first ones to be delivered to the requisitioning department.

  1. FIFO
  2. Weighted average method
  3. Most recent price method
  4. LIFO
Correct answer: (D)
LIFO

535. Which of the following are the characteristics of management accounting?

  1. It must follow generally accepted accounting principles.
  2. It is concerned with information for the internal use of management.
  3. It emphasizes relevance and flexibility of data.
  1. (1) and (2)
  2. (1) and (3)
  3. (2) and (3)
  4. (1), (2) and (3)
Correct answer: (C)
(2) and (3)

536. Time study serves the following purposes except:

  1. Standardizing jobs, operation etc.
  2. Assessing labour time
  3. Fixation of factory overhead rate
  4. Fixation of wage rates and introduction of incentive schemes
Correct answer: (C)
Fixation of factory overhead rate

537. The purposes served by preparation of payroll or wages sheet include:

  1. Spreading the volume of work to be done
  2. Computation of labour rate for each department
  3. Comparing actual wages with budgeted wages for control
  4. All of the above
Correct answer: (D)
All of the above

538. Sales commissions are classified as

  1. Prime costs
  2. Period costs
  3. Product costs
  4. Indirect labour
Correct answer: (B)
Period costs

539. A variable cost is?

  1. One which varies in proportion to the level of fixed cost incurred.
  2. One which tends to vary with the level of activity.
  3. One which changes over time.
  4. One which cannot be estimated with any great degree of accuracy.
Correct answer: (B)
One which tends to vary with the level of activity.

540. In automobile industry cost unit is

  1. Number
  2. Automobile quality
  3. Number of automobile industry
  4. Either (a) or (c)
  5. None of these
Correct answer: (B)
Automobile quality
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