Cost and Managerial Accounting

581. The inventory method where the cost per unit is recomputed after every addition in the inventory is known as.

  1. Specific identification method.
  2. Moving average method.
  3. Last-in- First - Out method.
  4. First-in-First-Out method.
Correct answer: (B)
Moving average method.

582. Direct Labor is an element of:

  1. Prime cost
  2. Conversion cost
  3. Total production cost
  4. All of the given options
Correct answer: (D)
All of the given options

583. The capacity which is based on the long-term average of sales expectancy is known as:

  1. Theoretical capacity
  2. Operating capacity
  3. Normal capacity
  4. Derated capacity
Correct answer: (C)
Normal capacity

584. FOH absorption rate is calculated by the way of:

  1. Estimated FOH Cost/Direct labor hours
  2. Estimated FOH Cost/No of units produced
  3. Estimated FOH Cost/Prime Cost
  4. All of the given options
Correct answer: (D)
All of the given options

585. The term Maximum level represents:

  1. The maximum stock level indicates the maximum quantity of an item of material which can be held in stock at any time.
  2. The maximum stock level indicates the maximum quantity of an item of material which cannot be held in stock at any time.
  3. The average stock level indicates the maximum quantity of an item of material which can be held in stock at any time.
  4. The available stock level indicates the maximum quantity of an item of material which can be held in stock at any time.
Correct answer: (A)
The maximum stock level indicates the maximum quantity of an item of material which can be held in stock at any time.

586. Under Periodic Inventory system Purchase of inventory is treated as:

  1. Assets
  2. Expense
  3. Income
  4. Liability
Correct answer: (B)
Expense

587. The flux method of labor turnover denotes:

  1. Workers appointed against the vacancy caused due to discharge or quitting of the organization
  2. Workers appointed in replacement of existing employees
  3. Workers employed under the expansion schemes of the company
  4. The total change in the composition of labor force
Correct answer: (D)
The total change in the composition of labor force

588. If labor is satisfied with high wages it may ultimately lead to:

  1. Increased production and productivity
  2. Increased efficiency
  3. Reduced labor and overhead costs
  4. All of the given options
Correct answer: (D)
All of the given options

589. In cost Accounting, abnormal loss is charged to:

  1. Factory overhead control account
  2. Work in process account
  3. Income Statement
  4. Entire production
Correct answer: (B)
Work in process account

590. The first in, first out method of pricing raw material issues, exhibits which one of the following features?

  1. The issue price is recalculated each time new deliveries are made into stock.
  2. The issue price is always at the latest price.
  3. The goods are always issued strictly in the physical order in which they are received.
  4. The issue price is always at the earliest price.
Correct answer: (C)
The goods are always issued strictly in the physical order in which they are received.
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