Cost and Managerial Accounting

591. In ______________ costing the cost of a group of products is ascertained.

  1. Process
  2. Job
  3. Batch
  4. Service
  5. Marginal
Correct answer: (C)
Batch

592. Data of a company XYZ is given below
Particulars
Sales 15,00,000
Variable cost 9,00,000
Fixed Cost 4,00,000
Break Even Sales in ______________

  1. 1, 00,000
  2. 2, 00,000
  3. 13, 00,000
  4. None of the given options
Correct answer: (D)
None of the given options

593. When a manufacturing process requires mostly human labor and there are widely varying wage rates among workers, what is probably the most appropriate basis of applying factory costs to work in process?

  1. Machine hours
  2. Cost of materials used
  3. Direct labor hours
  4. Direct labor dollars
Correct answer: (C)
Direct labor hours

594. Annual requirement is 7800 units; consumption per week is 150 units. Unit price 5, order cost 10 per order. Carrying cost 1 per unit and lead time is 3 week, The Economic order quantity would be:

  1. 395 units
  2. 300 units
  3. 250 units
  4. 150 units
Correct answer: (B)
300 units

595. The period of time for which a work station is available for production but is not utilized due to shortage of tooling, materials, operators, etc. is known as:

  1. Down time
  2. Operation time
  3. Idle time
  4. Set-up time
Correct answer: (B)
Operation time

596. Merit rating helps the following except:

  1. Determining right worker for the right job/work
  2. Delinking rewards with merits
  3. Simplifying wage structure
  4. Improving labour relations and reducing labour turnover
Correct answer: (B)
Delinking rewards with merits

597. 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

598. XYZ Ltd has the following data relating to its assembly plant in the year ended 31 December 2012:’000
Direct material costs 500
Direct labour cost 250
Assembly plant indirect costs 100
In addition, the stores department has total costs of 30,000 and spends 50% of its time servicing the assembly plant. There were 50,000 labour hours worked and 25,000 machine hours run in the assembly plant in 2012.
The overhead cost per direct labour hour was:

  1. 2.0
  2. 4.0
  3. 2.3
  4. 4.6
Correct answer: (C)
2.3

599. When a business is faced with a limiting factor (one which limits the activity of an entity) and there is a choice to be made between options to follow, which of the following statements describes the optimal course of action?

  1. Choose the option which gives the highest unit profit.
  2. Choose the option which gives the highest unit contribution.
  3. Aim to achieve a balance of activities covering all of the options.
  4. Choose the option which gives highest contribution per unit of limiting factor.
Correct answer: (D)
Choose the option which gives highest contribution per unit of limiting factor.

60. ______________ costing is suitable for mines, quarries, cement works etc.

  1. Process
  2. Contract
  3. Batch
  4. Operation
  5. Job
Correct answer: (D)
Operation
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