Cost and Managerial Accounting

541. Out of pocket payment involves payment to

  1. Managers
  2. Promoters
  3. Directors
  4. Shareholders
  5. Outsiders
Correct answer: (E)
Outsiders

542. Material control aims at achieving effective ______________ management.

  1. Marketing
  2. Production
  3. Organization
  4. Material
  5. None of these
Correct answer: (D)
Material

543. Raymond Corporation estimates factory overhead of 345,000 for next fiscal year. It is estimated that 60,000 units will be produced at a material cost of 575,000. Conversion will require 34,500 direct labor hours at a cost of 10 per hour, with 25,875 machine hours.
FOH rate on the bases on Budgeted Production would be?

  1. 5.75 per unit
  2. 6.65 per unit
  3. 6.0 per unit
  4. 1 per unit
Correct answer: (A)
5.75 per unit

544. Interest on own capital is a:

  1. Cash cost
  2. Notional cost
  3. Sunk cost
  4. Part of prime cost
Correct answer: (B)
Notional cost

545. Which of the following is/are the basic object/s of job analysis?

  1. Determination of wage rates
  2. Ascertain the relative worth of each job
  3. Breaking up job into its basic elements
  4. All of the given options
Correct answer: (B)
Ascertain the relative worth of each job

546. Which of the following is not a production cause of idle capacity?

  1. Set-up and change-over time
  2. Lack of supervision and instruction
  3. Lack of materials and tools
  4. Strike
Correct answer: (D)
Strike

547. The unavoidable causes of labour turnover include the following except:

  1. Personal betterment
  2. Dissatisfaction with the job
  3. Illness
  4. Retirement
Correct answer: (B)
Dissatisfaction with the job

548. Labour cost control embraces the following activities except:

  1. Recruitment and promotion
  2. Formulation of wage policy and payment and accounting for wages
  3. Allocation of cost
  4. Preparation of financial statement
Correct answer: (D)
Preparation of financial statement

549. Group bonus schemes are generally suitable where:

  1. Output depends on individual efforts
  2. Output of individual workers can be measured easily
  3. It is necessary to create a collective interest in the work
  4. Normal loss rate is high
Correct answer: (C)
It is necessary to create a collective interest in the work

550. Which of the following inventory valuation methods shows higher profits during the period of rising prices?

  1. FIFO method.
  2. LIFO method.
  3. Weighted average method.
  4. Simple average method.
Correct answer: (A)
FIFO method.
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