Cost and Managerial Accounting

571. Stores ledger is maintained in the ______________ department.

  1. Cost accounting
  2. Stores
  3. Purchase
  4. Production
  5. None of these
Correct answer: (A)
Cost accounting

572. About 50 items are required every day for a machine. A fixed cost of 50 per order is incurred for placing an order. The inventory carrying cost per item amounts to Re. 0.02 per day. The lead period is 32 days. Compute reorder level.

  1. 1,200 items
  2. 1,400 items
  3. 1,600 items
  4. 1,800 items
Correct answer: (C)
1,600 items

573. Normal stores losses are:

  1. Part of prime cost
  2. Part of production overheads
  3. Part of selling and distribution overheads
  4. Written-off to costing and profit and loss account
Correct answer: (B)
Part of production overheads

574. Depreciation is a:

  1. Measure of consumption of assets
  2. Process of allocation and not of valuation
  3. Wear and tear due to use and/or lapse of time
  4. All of the above
Correct answer: (D)
Wear and tear due to use and/or lapse of time

575. Regular maintenance expenses are:

  1. Capitalized
  2. Part of manufacturing overheads
  3. Written-off to costing profit and loss account
  4. Part of prime cost
Correct answer: (B)
Part of manufacturing overheads

576. Productive causes of idle time include the following except:

  1. Power failure
  2. Fall in demand
  3. Machine breakdown
  4. Waiting for materials, tools, instructions, etc.
Correct answer: (B)
Fall in demand

577. At the start of the quarter there were 14,630 workers. 750 employees left during the quarter while 600 joined the organization during the same period. Using the flux method, the labour turnover was:

  1. 5.13%
  2. 9.23%
  3. 9.32%
  4. 9.28%
Correct answer: (D)
9.28%

578. The cost of goods sold is equal to

  1. Total Purchases - Total Sales.
  2. Opening stock + Total Purchase.
  3. Opening stock - Total Purchases +Closing Stock+ Direct Costs.
  4. Opening stock + Total Purchases - Closing Stock + Direct Costs.
Correct answer: (D)
Opening stock + Total Purchases - Closing Stock + Direct Costs.

579. Favorable conditions for the operation of piece rates include:

  1. Homogeneous products
  2. Long, uninterrupted run of production
  3. Inspection
  4. High proportion of indirect labour
Correct answer: (B)
Long, uninterrupted run of production

580. 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
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