Cost Accounting MCQs End Term

Chp 5 & 8
Q1. Selling price is 200 RS ,variable cost is 140 Rs,fixed cost=2L -1mark
a.find contribution
Answer: 60
Solution: S - V = 200 -140 = 60
Q2. Selling price is 120 RS ,variable cost is 80 Rs,fixed cost=2L

a.find PV ratio - 1mark
Answer: 33.33%
Solution: PV Ratio = (S – V)/ S x 100
(40/ 120 ) x 100 = 33.33%
Q3 Selling price is 80 RS ,variable cost is 50 Rs,fixed cost=2L

a.find BEP in Units and Rupees 3mark
Answer: 6667 unit and Rs. 533360
Solution: unit = 200000 / 30 = 6666.6667 units
rs 6666.66666 x 80 = 533360
Q4. Selling price is 120 RS ,variable cost is 80 Rs,fixed cost=2L a.find BEP in units and rupees -3mark
BEP Units = F/C per unit
Solution: BEP Units = 200,000/ 120 – 80 = 5000 units
Bep Rs. = 5000 unit X 120 = 6,00,000
Q5. Contribution p u at present is Rs15 FC Rs 300000 Desired profit Rs360000

if VC are increased by 2.5 pu then what will be the desired sale to get same profit
Ans = ? units
Desired sales Units= FC + Desired profit/ contribution per unit
Solution: (300000+360000)/(15-2.5)
660000/12.5 =52800 units
Q6. selling price is 100 rs, variable cost is 50,fixed expense is 10000pa
find the sales units to earn a profit of 10000.
Ans =? units
DS = F + P/ Contribution pu
= (10000 +10000)/ 50
= 400
Q7. Pv ratio is 50%,margin of safety is 280000 calculate the profit-3marks

Solution:
Margin of safety = profit/pv ratio
(280000*50)/100
Answer: Rs.140,000
Q8. The capacity for the prodn for the comapny is 500 units pm VC is Rs 100 pu
SP is Rs 150 pu Fixed cost is Rs 9000 p.a Find the value of profit if the sales units is 300 units
Solution : desired sales = FC + Desired profit/ contribution per unit
Answer 300 = (9000 + P/L)/150 - 100 = 6000
Q9 Company sold 26000 units goods Op stock is 14000 units cl stock is 18000 units how much the company need to
produce to satisfy the given sale
Sol : Sale unit = Op. Stk + prodn - Cls. Stk
26000 = 14000 + prodn - 18000
= 30000
Q10 .BEP is 10000 units,the variable cost at this level is 3 Lac fixed cost is 2Lac
contribution per unit is 20 find the selling price per unit
Solution:
v = 300000/10000 = 30
C=S-V
20 = S - 30
Answer = Rs. 50
Q11. Unit produced is 10,000 ,Variable cost is 60 Rs,Fixed cost is 20,000. What will be cost of closing stock as per
Marginal costing and traditional Costing
as per marginal costing = 60 x 10000 = 600000;
as per traditional costing = 600000+20000 = 620000
Ans. Rs. 6,00,000 and Rs. 6,20,000
Q12. To produce Product P the component required are

A 4units @ 5
B 6 units @ 2
The production is expected to be 20000unit of Product P
Calculate the material Cost?
A. 450000
B. 640000
C. 600000
D. 500000
Answer: B
Solution = ( 20,000 x 4 x5) + ( 20,000 x 6 x 2 )
= 4,00,000 + 2,40,000
= 6,40,000
Q13. Product is sold at a price of 250. its
V.C is 190 p.u.
F.C. p.a. 1,50,000
if the companys sells 2,500 units, what will be the profit ?
a) 1,50,000
b) loss 1,50,000
c) no loss no profit
d) none of the above
Answer: DS = F + P or L / Contribution
2500 = 150000 + P or L / 60
2500*60 = 150000 + P or L
150000 = 150000
Therefore option C no profit no loss
Q14. To produce product A, material cost is 425

Labour cost is 225/unit
Variable overhead= 150
and fixed overhead is 100rs/unit
The company purchase manager gave the quotation of 760 /unit for product A for market.
Should the company make or buy the product.
Solution: Material cost = 425+225+100 = 800 > 760 hence, buy
Q15 A joiner charges customer Rs15 per hour, each hour incurring an estimated variable cost of Rs6. Total fixed cost for
next year is estimated at Rs6000 for clerical support and Rs3000 for rent of premises.What is the joiner's breakeven point?
A. 1000
B. 1500
C. 2250
D. 5000
Solution:
BEP = F / Contribution per unit
= 6000 + 3000 / (15 - 6)
= 9000 / (15-6)
= 9000 – 9
= 1000
Q16. H Limited manufactures and sells two products - J and K. Annual sales are expected to be in the ratio of J: 1 K: 3.
Total annual sales are planned to be Rs420 000. Product J has a contribution to sales ratio of 40% whereas that of product K is
50%. Annual fixed costs are estimated to be Rs120 000.The budgeted breakeven sales value (to the nearest Rs1000)?
A. 196000
B. 253000
C. 255000
D. 200000
Solution: Sale for J = 1,05,000 and For K = Rs. 3,15,000
Contr for J 1,05,000 x 40 % contr for K = 3,15,000 x 50%
Total Contri = 1,99,500
p/v ratio = 1,99,500/ 4,20,000 x 100 =47.5%
BEP = F/ PV Ratio
= 1,20,000/ 47.5%= 252631.57
= 2,53,000
Chp 7
Q17. Atul LTD gives u the following details:

Standard Hours - 75000hrs
Actual hours worked - 72000hrs
Find out the capacity ratio.
Answer: (Actual hours worked / Standard Hours) × 100
= (72000 / 75000) × 100
= 0.96 × 100
= 96%
Q18. Find overhead variance

Budgeted Actual
Output 10000 13000
overhead 500000 600000
a) 100000 F
b) 100000A
c) 50000 F
d) 50000 A
Answer: C
Q19. Find overhead variance
Budgeted Actual
Output 10000 10000
overhead 800000 600000
a) 200000 F
b) 200000A
c) 50000 F
d) 50000 A
Ans. A
Q20. Standard(for one unit)

Material A 10kg @ 7/kg
B 12kg @ 5/kg
Actual (100units)
Mat A 800kg @8
B 1400kg @4
Find price variance of A &B
A 800 F and 1400 A
B 1400 F and 800 A
C 800 A and 1400 F
D 1400 F and 800 A
Mat A = ( 7 – 8 ) x800 = 800 A
Mat B = (5 – 4)x 1400 = 1400 F
Q21. Standard(for one unit)

Material A 10kg @ 7/kg
B 12kg @ 5/kg
Actual (100units)
Mat A 800kg @8
B 1400kg @4
Find Usage variance of A
MUV= (SQ - AQ ) xSP

OutPut SQ
1 10 Kg A
100 X
( 1000 - 800 )x7 = 1400 F
Ans for Usage Variance

(1400 ) x 5 = 1000 A
B - SQ for 100 units = 1200
(1200-1400)×5 = -1000
Q 22. Normal loss is 10 % input is 950 units, abnormal loss is 15 then output is
A 840
B 750
C 740
D 800
Ans A
Q 23. input 1100 units normal loss is 10% output is 970 what is Abnormal loss units
A 20
B 15
C 25
D 30
Ans A
Q 24. At 9000 direct labour hours the flexible budget for indirect material is 27000. if rs 28000 of indirect material cost are
incurred at 9200 direct labour hours, the flexible budget report shows the following difference for indirect material
a. 1k unfav,
b. 1k fav ,
c. 400 fav ,
d.400 unfav
Q25. XYZ Ltd. manufactures a single product P with a single grade of

labour. The sales budget and finished goods stock budget for the 1st quarter
ending 30.619X4 are as follows-
Sales -1400 units
Opening finished goods - 100 units
Closing finished goods-140 units
it is budgeted that 10-% of finished work will be scrapped
a) Budgeted Production ?
Answer:
Budgeted Production = 1600
BO AO
100 90
X 1440
b) The standard direct labour content of the product P is 3 hours. The budgeted productivity ratio for direct labour is
only 80%.
what is labour Budget ?
Solution:
1600 × 3 = 4800
c) The budgeted productivity ratio for direct labour is only 80%. The company employs 36 direct operatives, who are
expected to average 144 working hours each in the 1st quarter. whether there is shortage of labour or excess of
labour Hrs ?
36*144=5184
80%=4800
100%-4800*100/80=6000
So shoratge=6000-5184=816 hours

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Chp 5 & 8

Q2. Selling price is 120 RS ,variable cost is 80 Rs,fixed cost=2L

Q3 Selling price is 80 RS ,variable cost is 50 Rs,fixed cost=2L

Q5. Contribution p u at present is Rs15 FC Rs 300000 Desired profit Rs360000

Q7. Pv ratio is 50%,margin of safety is 280000 calculate the profit-3marks

Q12. To produce Product P the component required are

Q14. To produce product A, material cost is 425

Q17. Atul LTD gives u the following details:

Q18. Find overhead variance

Q20. Standard(for one unit)

Q21. Standard(for one unit)

MUV= (SQ - AQ ) xSP

( 1000 - 800 )x7 = 1400 F

Ans for Usage Variance

Q25. XYZ Ltd. manufactures a single product P with a single grade of

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