T. Y. B.

Com Cost Accounting Sem V

Questions A B C D Solution
Cost Accounting system is Financial
Management Management
developed for _____. institution Government Shareholders
Cost Accounting is an _____
Internal Internal
reporting system. External Government Financial
A location for which cost is
Cost centre Cost centre
incurred is a _____. Revenue centre Profit centre Production centre
Product cost is _____ cost. Fixed Prime Indirect Variable Variable

Cost which can be identified with

Direct Direct
the output is called as _____.
Product Fixed Indirect

Interest on capital is _____ cost. Imputed Imputed

Sunk Direct Indirect
Overheads incurred in connection
with factory is called _____ Factory Factory
overheads. Office Selling other
The cost which remains constant
irrespective of output is called Fixed Fixed
_____ cost. Variable Product Sunk
Direct labour and factory
Conversion Conversion
overheads is called _____ cost. Direct Packing Indirect
Cost of designing is _____
Direct Direct
expenses. Office Production Indirect
Halwai in confectionary unit is a
Direct Direct
_____ labour. Actual Production Indirect
Labour in pay roll depp. is an
Indirect Indirect
_____ labour. Direct Actual Production
Exciseduty based on output is
Direct Direct
_____ expenses. Indirect Production Distribution
Lubricating oil is a _____
Factory Factory
overhead. Prime cost Selling Office
_____ cost indicates what the cost
Standard Standard
should have been. Historical Estimated Variable
Relevant cost is _____ for decision
Relevant Relevant
making. Standard Product Urgent
The cost incurred by past decision
Historical Historical
is _____ cost. Estimated Standard Marginal
Fixed cost which continues to be
incurred even when plant is
Direct Shutdown Shutdown
temporarily shutdown is called as
_____ cost. Sunk Imputed

The cost which involves cash

Out of Pocket Cost Out of Pocket Cost
outlay is _____ _____ _____ cost.
Book cost Future cost Postponable cost
The cost of next best alternative is
opportunity cost opportunity cost
_____ _____. Cash cost Imputed cost None of the above
The cost which does not involve
Non Cash opportunity cost Non Cash
any cash outlay is _____ cost. Cash cost Imputed cost
Increase or decrease in total cost
due to charge in activity level is Differential Cost Differential Cost
_____ _____. Estimated cost Fixed cost Capacity cost
Current purchase price of an
identical asset is called as _____ Replacement cost Replacement cost
_____. Production cost Urgent cost Selling cost
The cost which cannot be avoided
Committed Discretion Shutdown Committed
is called as _____ cost. Imputed
The cost which can be avoided by
managerical decisions is called as Discretion Committed Shutdown Discretion
_____ cost. Marginal
Loss on sale of fixed asset is
_____ _____ item. Fixed Cost Standard Cost Variable Cost Non-Cost Non-Cost
Cost accounting is an important Financial
system developed for Shareholders Governmentt Management institutions Management
The resources that have been used
for attaining a particular objective
is Revenue Cost Profit Investment Cost
Cost accounting is a reporting
system Internal External Government Financial internal

The costing which determines cost Historical Standard Estimated Marginal historical
after it has been actually incurred is

Location for which location for which

A cost centre is a cost is incurred An organisation A unit of cost Profit centre cost is incurred
A segment of a business entity to
which both revenue & costs are Cost centre Revenue centre Profit centre Production centre profit centre
assigned is a
A cost centre which is engaged in Production cost Impersonal cost production cost
production activity is called centre Process cost centre centre Production unit centre
One of the following is not a
marginal costing
costing system Marginal costing Uniform costing Absorption costing Process costing
Ascertainment of ascertainment of
Cost ascertainment involves cost Control of cost Estimation of cost Fixation of price cost
Product cost means Variable cost Fixed cost Prime cost Indirect cost Variable cost

Imputed cost
Notional cost is also known as Imputed cost Opportunity cost Out of pocket cost Variable cost
Cost which can be identified with
Product cost Direct cost Fixed cost Variable cost Product cost
the output is called as
Cost of designing is Production cost Indirect cost Direct material Direct charges Direct charges
Interest on capital is Imputed cost Sunk cost Direct cost Indirect cost Imputed cost
Payment to other parties is called
Out of pocket cost
as Out of pocket cost Book cost Future cost Postponable cost
Cost which is relevant for decision-
Relevant cost
making is Relevant cost Past cost Opportunity cost Imputed cost
Overheads which are incurred in
Factory overheads
connection with factory are Factory overheads Office overheads Selling overheads Prime cost
Cost which does not require current
Book cost
cash payment is Book cost Product cost Cash cost Opportunity cost
The cost which remains constant
irrespective of output upto capacity Fixed cost
limit is Fixed cost Product cost Variable cost Sunk cost
Variable cost is also known as Product cost Period cost Indirect cost Semi fixed cost Product cost
The cost which is directly
Direct cost
chargeable to the product is Indirect cost Direct cost Overheads Period cost
Primary packing is a Direct Materials Indirect material Overheads Selling cost Direct Materials
Cost of Grease & oil is a Direct cost Indirect material Packing cost Indirect labour Indirect material
Chargeable Chargeable
Cost of designing the product is expenses Indirect cost Sunk cost Fixed cost expenses
Cost determined in advance on the
basis of scientific analysis of Standard cost
circumstances is Estimated cost Standard cost Pre–determined cost Past cost
Direct labour & Administrative Direct labour &
Conversion cost includes Direct labour Selling overheads factory overheads overheads factory overheads
The cost which does not involve
Imputed cost
any cash outlay is Sunk cost Relevant cost Imputed cost Book cost
Raw material directly identifiable Production
Direct materials
with the product is Direct materials Indirect materials Process materials materials
Cost which can be identified easily
Direct cost
is called as : Indirect cost Direct cost variable cost Fixed cost

Wages paid to the workers in

Indirect labour
machinery department in an
engineering industry is called as : Indirect labour Direct labour Actual labour Production labour
Cost of designing and layout is an
Direct expenses
example of : Direct expenses Direct materials Indirect cost Production Cost
Royalty paid on use of patents is Production Distribution
Direct expenses
called as : Direct expenses Indirect expenses expenses expenses
The cost which relates to the inputs
like materials, labour and expenses
Engineered cost
directly connected with the product
is known as : Engineered cost Relevant cost Product cost Urgent cost
Cost which is related to capacity is
Capacity cost
called : Fixed cost Capacity cost Plant cost None of the above
Cost which is unaffected by the
Fixed cost
change in output is called as : Fixed cost Variable cost Period cost None of the above
The most important element of cost
Material Material
is _____. Overheads Labour Chargeable Exp.
Request to the supplier to supply
Purchase Order Purchase Order
material is an _____. re-order sale invoice None of the above
_____ _____ are fixed to control
Inventory Levels Inventory Levels
inventory. Maximum Level Minimum Level Re-Order Level

_____ _____ indicates maximum

Maximum Level Maximum Level
stock to be maintained.
Minimum Level Re-Order Level Danger Level
Economical size of order is called
EOQ EOQ
as _____. Production None of the above
_____ _____ _____ shows Minimim Stock Minimim Stock
Maximum Stock Average Stock
minimum stock to be maintained. Level Level
Level Level None of the above
Scientific purchasing begins with Selection of the
Indenting Indenting
_____. Inspection Ordering supplier
Goods received note is prepared by
Stores Stores
_____ _____. Purchase Finance Sales
_____ _____ shows stock position
EOQ ABC Bin Card Bin Card
at the bin. None of the above
_____ _____ _____ is decided on
Maximum Stock
the basis of ordering cost and EOQ Minimum Stock Average Stock EOQ
Level
carrying cost. Level Level
The most important element of cost
material
is material labour overheads chargeable Exp.
The function of Purchase Purchase of purchase of
Department is materials Sale of scrap Production of goods Sale of goods materials
Request to the Request to the request to the
supplier to supply supplier to verify Acknowledgement supplier to supply
Purchase order is a materials the stock of goods Sale invoice materials
Goods received note is normally
six copies
prepared in six copies five copies four copies five copies
economic size of economic order to maximum level of economic size of
EOQ is also known as order be placed stock to be fixed re-order level order
minimum stock to maximum stock to average stock to be minimum stock to
Minimum inventory level is
be maintained be maintained maintained danger level be maintained
Indenting for Selection of the Indenting for
Scientific purchasing begins with :
materials Ordering Inspection supplier materials
Purchase order is prepared
5 copies
generally in : 4 copies 5 copies 7 copies 2 copies
production purchase
Material requisition is signed : foreman
department department foreman accountant
Goods received note is prepared by purchase finance
stores department
: department stores department sales department department
Order should be placed with the
supplier when the inventory Re–order level
touches : maximum level Re–order level minimum level Danger level
Maximum Minimum Minimum
Minimum Inventory level shows :
inventory inventory Both (i) & (ii) None of the above inventory
More working Less working Average working More working
Maximum inventory locks up : capital capital capital None of the above capital

Opening inventory
Opening inventory
+ closing inventory
Average inventory is : Opening inventory Closing inventory + closing inventory None of the above

Safety of
Minimum inventory is to ensure : minimum working Safety of maximum
production process
capital production process profitability None of the above
ABC analysis is a technique Inventory Finished stock
Inventory control
developed for : management Inventory control WIP control control
EOQ is the _____ size of the order
at that point ordering and carrying Optimum
costs are minimised. Optimum Maximum Minimum None of the above
In ABC analysis ‘C’ class items
Loose control
require : Loose control Tight control Moderate control None of the above
In ABC analysis ‘A’ class items
Tight control
require : Loose control Tight control Moderate control None of the above
Optimise Optimise Optimise
The objective of inventory investment in investment in Reduce inventory investment in
management is to : current assets inventory levels None of the above inventory
Average annual consumption of
material is 20,000 kgs at a price of
` 2 per kg. The holding cost is 16% 2500 kgs
and ordering cost is ` 50. How
much should be EOQ? 2500 kgs 3000 kgs 2000 kgs 1000 kgs
A factory required 1,000 units per
year. The cost of placing an order
200
is ` 60 and carrying cost is ` 3 p.a.
The EOQ is 200 150 600 450

A firm requires 16,000 units per

year. It purchases at ` 60 each. The
cost of placing an order is ` 120
800 units
and annual carrying cost is 10% of
the cost. To get maximum benefits,
the firm should place an order for
_____ at a time. 800 units 1,000 units 400 units 1,200 units
The annual usage of the particular
material is 2,00,000 units. The
EOQ is 20,000 units. Cost of
10,000 units
placing an order is ` 80. Invoice
cost is ` 500 per unitt. The average
inventory is 10,000 units 4,000 units 5,000 units 6,500 units

Refer the above question the ` 800

estimated annual ordering cost is ` 800 ` 400 ` 1,200 ` 1,600

In times of rising prices, the pricing

LIFO
of issues will be at a more recent
current market prices in FIFO Weighted Average LIFO Simple Average
The inventory is valued at the most
recent market prices and it is near
FIFO
to the valuation based on Base Stock
replacement cost in FIFO LIFO Weighted Average Method
According to the method of
Weighted Average
pricing, issues are close to current Highest In First FIFO LIFO
Price
economic values LIFO Out Price

In the method of pricing, cost lag Weighted Average FIFO

behind the current economic values LIFO Replacement Price FIFO Price
When prices fluctuate widely, the
method that will smooth out the Weighted Average
effect of fluctuations is Simple Average Weighted Average FIFO LIFO

both a & c
FIFO method is : Logical Illogical Recognised by AS2 both a & c
Under perpetual Inventory system At the end of the
Continuously
stock is ascertained : Periodically Continuously year None of the above
Dial Time recorder has _____
160
holes. 360 200 500 160
Workers who work outside the
factory premises are called as Out Job Out
_____ works. Casual Badli
_____ _____ accounting is
conncerned with computation of Pay roll Pay roll
wages. Muster roll Pay slip None of the above
_____ roll shows details of wages
Pay Pay
paid. Muster Both (A) & (B) None of the above

_____ sheet shows gross wages. Wage Wage

Net Deductions All of the above
_____ _____ is prepared for
Pay Pay
individual worker. Job Card Job Sheet All of the above
_____ labour cannot be readily
Indirect Indirect
identified. Direct Production Actual
Usually _____ workers are paid
Casual Casual
daily basis. Job Retrenched Sincere
_____ _____ is a periodic
Pay Roll Pay Roll
statement of wages. Pay slip Job Card Job Sheet
pension scheme can _____ labour
Decrease Decrease
turnover. Increase Maintain All of the above
Replacement cost is associated
Replacement Replacement
with _____ of labour. Appointment Termination All of the above
Cost of accident is _____ cost. Replacement Preventive Sunk cost All of the above Replacement
Low wages, Lack
Unavoidable cause of labour
Exit interview, of Training, Lack Death, Retirement, Death, Retirement,
turnover may be _____ _____
Better facilities, of Proper HR Marriage Marriage
_____ of employee.
Better pay Policies All of the above
Exit interview can _____ labour
Reduce Reduce
turnover. Increase Maintain None of the above
Labour Turnover can be reduced
by Better Pay. True False True

Labour turnover is Turnover of goods Turnover of labour Stock Turnover Debtor's Turnover Turnover of labour

Bad working Unscientific

Labour Turnover is caused by Low wages All of the above All of the above
conditions selection
Replacement
Labour Turnover is calculated by Separation method Flux method All of the above All of the above
method
In a firm, there were 750
employees on 1st April. During the
month 120 employees were left and
1,000 880 550 630 880
250 employees were appointed.
No. of the employees on 30th April
were
Labour Turnover leads to : High cost Low cost Low productivity (i) & (iii) (i) & (iii)

Cost of labour turnover may be : Preventive cost Replacement cost Both (i) & (ii) none of the above Both (i) & (ii)

Medical services cost is : Replacement cost Preventive cost Both (i) & (ii) none of the above Preventive cost

Cost of welfare services is a : Preventive cost Replacement cost Both (i) & (ii) none of the above Preventive cost

_____ _____ system is suitable

when quality of work is more Time Rate Time Rate
important. Halsey Plan Piece Rate Rowan Plan

Under piecerate system wages are

Time Rate Fixed Rate Unit Fixed Rate Unit
paid at a _____ _____ per _____.
Standard time None of the above

Under _____ _____ system time

Piece rate Time Rate Piece rate
spent on job is not considered.
Halsey Plan Halsey Plan
_____ _____ _____ system
provides incentives to efficient Time Rate Piece Rate Piece Rate
workers. Halsey Plan None of the above
_____ _____ system reduces
Time Rate Piece Rate Piece Rate
tendency of workers to go slow. Halsey Plan Rowan Plan
_____ _____ system is suitable
where task can be readily Time Rate Piece Rate Piece Rate
measured. Rowan Plan Halsey Plan

_____ _____ system is suitable

Piece Rate Halsey Plan Time Rate Time Rate
when quality of work is important.
None of the above
Under _____ _____ bonus is paid
to the workers on the basis of time Time Rate Halsey Plan Piece Rate Halsey Plan
saved. None of the above

Under _____ _____ bonus is paid

to the workers in proportion to time Rowan Plan Halsey Plan Piece Rate Time Rate Rowan Plan
saved and time allowed.

Under _____ _____ _____ _____ Taylor’s Piece

Halsey Plan Taylor’s Piece Rate
plan two rates are fixed. Rate Rowan Plan None of the above
Merrick Merrick
Under _____ _____ _____ _____ Taylor’s Different
Differencial Piece Differencial Piece
plan three piece rates are fixed. Piece Rate
Rate Co-partnership Bedeaux plan Rate

_____ _____ _____ _____ plan Merrick Merrick

Taylor’s Different
does not penalise the workers who Differencial Piece Differencial Piece
Piece Rate
produces below standard output. Rate Rate
Rowan Plan None of the above
The method of remuneration to
give stability of labour cost of the measured day work
employers is straight piece work premium bonus measured day work None of the above
to facilitate to facilitate
The following is the most relevant to measure payment for the payment for the
use of the clock card employee time spent on the to calculate bonus time spent on the
efficiency work premises payment None of the above work premises
Under Halsey Premium Plan, ____
% of time saved is shared by 50
employer 110 115 50

A worker has a time rate of ` 15 per

hour. He makes 720 units of a
component (standard time 5
` 864
minutes per unit) in a week of 48
hours. His total wages including
Rowan Bonus for the week is
` 792 ` 820 ` 840 ` 864

The standard time required per unit

of a product is 20 minutes. In a day
of 8 working hours, a worker gives
` 180
an output of 30 units. If he gets a
time rate of ` 20 per hour, his total
earnings under Halsey Plan was
` 200 ` 192 ` 180 ` 160

Out of the following which wage

system is not treated as an Co–partnership
Taylor's different Merrick's multiple
Individual incentive wage system?
Bedeaux plan piece rate plan rate system Co–partnership

Aasharam completes a work in 8

hours instead of 10 hours. Labour
` 48
rate per hour is ` 5. What he will
earn as per Rowan plan?
` 40 ` 48 ` 50 ` 45
"(Actual hours worked ` Rate per
hour) + (Time saved ` 50% rate per
hour)". Out of the following in Halsey plan
which system the amount of wages
is calculated? Halsey plan Rowan plan Piece Rate System Taylor's plan

The difference between hours paid

Idle time
and hours worked is called :
Idle time Standard time Normal time Time saved
The flux rate method of labour Employees joined & Employees Employees joined
turnover considers : Employees left Employees joined left replaced & left
Overtime is paid to workers for
extra time worked than _____ Normal
working hours specified. Extra Additional Normal Idle
A worker who does not work in the
factory premises but works at his outworker contract temporary casual outworker
home is called is :
The method which does not
differentiate between efficient and Time rate method
inefficient worker is : Time rate method Piece rate method Halsey Plan None of the above
The method which differentiate
between efficient and inefficient Piece rate
workers is : Time rate Piece rate Rowan plan None of the above
The method acceptable to labour
Time rate
union is : Time rate Piece rate Rowan plan Halsey plan
The method required to improve
Piece rate
productivity is : Time rate Piece rate Rowan plan Halsey plan
Under Taylor’s Differential Piece
Rate Plan, the different rates fixed 2
are : 2 3 4 5
Under Taylor’s Differential Piece
120% of normal
Rate plan efficient workers are paid 100% of normal 120% of normal 150% of normal
rate
: rate rate rate None of the above
Taylor’s Differential piece rate
Inefficient workers
plan penalises : Efficient workers Inefficient workers Average workers None of the above
Efficiency of workers is measured None of the
Time taken
on the basis of : Time taken Standard time Time allowed allowed

A worker has a time rate of ` 15

per hour. He makes 720 units of a
component (standard time 5
` 864
minutes per unit) in a week of 48
hours. His total wages including
Rowan bonus for the week is
` 840 ` 792 ` 820 ` 864
The standard time required per unit
of a product is 20 minutes. In a day
of 8 working hours a worker gives
an output of 30 units. If he gets a ` 180
time rate of ` 20 per hour his total
earning under Halsey bonus
scheme is ` 200 ` 192 ` 180 ` 160

A worker is allowed 60 hours to

complete a job on a guaranteed
wage of ` 10 per hour. He ` 540
completes the job in 48 hours. How
much will he under Halsey Plan?
` 540 ` 450 ` 640 ` 700

Standard time per piece is 12

minutes normal rate per hour (in 8
hours a day) ` 20. Mr. A produced ` 122.84 ` 125 ` 130 ` 140 ` 122.84
37 units this earning under Taylor’s
differential piece plan is

_____ time is paid by the

Idle Time Idle Time
employer. Overtime Normal time Abnormal time
Idle time is caused by _____ Machine
Power Failure Power Failure
_____. breakdown Waiting for work All of the above
Normal Idle Time wages are
Factory Factory
charged to _____ overheads. Direct Indirect None of the above
_____ time causes excess labour
Over Time Idle Time Over Time
cost. Normal time Abnormal time
Wages in normal idle time should Distribution
Factory overheads
be charged to Office overheads Factory overheads Selling overheads overheads
Causes excess Increases Increases labour Causes excess
Overtime
labour cost productivity turnover all of the above labour cost
Abnormal Idle
Tea and lunch break is : Normal Idle time
Normal Idle time Time Overtime none of the above
Abnormal Idle
Time spent to overcome fatigue is : Normal Idle Time
Normal Idle Time Time Overtime none of the above
Abnormal Idle
Machine setting time is : Normal Idle Time
Normal Idle Time Time Overtime none of the above
Travelling time from one job to Abnormal Idle
Normal Idle Time
another job is : Normal Idle Time Time Overtime none of the above
Abnormal Idle Abnormal Idle
Machine breakdown is :
Normal Idle Time Time Overtime All of the above Time

Waiting for tools is : Abnormal Idle time

Abnormal Idle time Normal Idle time Overtime All of the above
Abnormal Idle Abnormal Idle
Strikes and lockout is :
Normal Idle time Time Overtime none of the above Time
Abnormal Idle Abnormal Idle
Power failure is :
Time Normal Idle Time Overtime None of the above Time
Overtime premium at Normal Rate
Direct labour
is treated as : Direct labour Indirect labour Factory overheads none of the above
Overtime premium paid due to
negligence of a worker is charged Department
to the concerned : Worker Department Overheads All of the above
Overtime premium due to Financial P & L
Costing P & L A/c
abnormal causes is charged to : A/c Costing P & L A/c Balance sheet All of the above
Depreciation of P Efficiency of the Depreciation of P
Overtime increases : None of the above
&M Productivity organisation &M
Chargeable
Indirect cost is known as _____. overheads overheads
Indirect overheads Work overheads overheads
Cost incurred to secure orders is
selling overheads selling overheads
_____. Office overheads Variable overheads None of the above
Material which cannot be charged
indirect material overheads indirect material
directly _____. Direct material None of the above
Rent of building is _____
fixed overhead fixed overhead
overheads. Indirect overheads Direct overheads None of the above
Cost which can be controlled is
controllable controllable
_____ cost. chargeable overheads None of the above
Cost of abnormal idle time is
abnormal abnormal
_____ overheads. normal Production None of the above
Depreciation on machinery is
factory overheads factory overheads
charged under _____ overheads. Office overheads Direct overheads Indirect overheads
Royalty on production is a _____
direct direct
charge. Indirect overheads None of the above
Costing department expenses are administrative administrative
Production Selling overheads
considered as _____ overheads. overheads overheads
overheads Office overheads
Stationery in production dept is
Indirect Indirect
_____ material. Direct Fixed None of the above
Salary of office clerk is _____
Indirect Indirect
labour. Office Direct Factory

Rent is _____ expense. Fixed Indirect Fixed

Direct None of the above
Overheads are classified on the
Fixed, Variable, Fixed, Variable,
basis of behaviour as _____ _____ Indirect
Semi-variable Semi-variable
_____. Direct None of the above
Overheads are classified on the
Factory, Office & Factory, Office & S
basis of function as _____ _____ Purchase, Sales, Production,
S&D &D
_____. Labour Material , Overhead None of the above

Cost of catelogues is _____ _____. Indirect Material Indirect Material

Direct material Work cost None of the above
Rent of premises is _____
Fixed Fixed
overheads. Direct Indirect None of the above
Telephone charges is _____ _____
Semi-Variable Semi-Variable
overheads. fixed overhead Variable overheads None of the above
Actual benefit received by the
department is _____ of Principle Principle
apportionment of overheads. No of employees None of the above

Compensation to workers is
Wages Wages
apportioned on the basis of _____.
Overheads Materials None of the above
Store keeping expenses are
apportioned on the basis of _____ Indirect Indirect
material. Direct Variable None of the above

Indirect costs cannot be identified

a method of
with a particular cost centre are
a method of a method of apportionment
shared between cost centre using
apportionment allocation a recovery rate None of the above
The method of apportionment
suitable for allocating rent of number of floor area
building between cost centres employees machine hours KWH floor area
The allotment of whole items of overhead
cost allocation
cost to cost unit is called cost allocation cost apportionment cost classification absorption
Administrative overheads are
works cost
recovered as a percentage of direct materials prime cost works cost None of the above

Selling and distribution overheads

percentage on percentage on any of these
are absorbed on the basis of
rate per unit works cost selling price any of these
Depreciation on machine is
machine cost
apportioned on the basis of machine cost machine hours labour hours labour cost
machine hours of
Power is allocated on the basis of H.P. of machines
H.P. of machines cost of machines machine labour hours
Employee welfare expenses are number of number of
allocated on the basis of employees labour hours machine hours prime cost employees
Electricity charges are allocted on number of light number of light
the basis of points cost of machines labour hours factory cost points
Charging overheads to invidual
absorption
unit is known as : allocation apportionment absorption collection
Chargeable Chargeable
Direct expenses are also known as :
expenses Prime cost Variable cost Period cost expenses
The process of arranging items into
groups accoridng to their degree of Classification
similarity is called : Classification Analysis Identification Ascertainment
The cost directly attributable to a
Allocation
department is called as : Allotment Allocation Recovery Charging

The process of re–distribution of

Secondary
overheads of support department to
Secondary primary distribution
production departmnet is called as :
distribution distribution Repeat distribution none of the above
Total of indirect material, indirect
labour and indirect expenses is Overheads cost
called as : indirect overheads Overheads cost works overheads Chargeable cost
The process of charging the
Overheads
traceable overheads to cost centres Overheads Overheads Overheads
allocation
is called as : allocation charging allotment None of the above
Production Production
Research cost should be treated as :
overheads Period cost Variable cost None of the above overheads
Storekeeping expenses are No. of material No. of material
allocated on the basis : requisitions Area Direct labour hours None of the above requisitions

Salary of works manager is a : Factory overheads

Office overheads Factory overheads Selling overheads All of the above
Semi–variable
Insurance is a : Fixed overheads
Fixed overheads Variable overheads overheads None of the above
Assigning code numbers to a group
Codification
of overheads is called as : Classification Codification Analysis None of the above
The process of charging cost to a
Absorption Absorption
cost unit is _____. Allocation Apportionment Allotment
Labour hour rate is followed in Different groups of
Labour Machine Labour
_____ intensive industry. machine None of the above
Machine hour rate is followed in Different groups of
Machine Labour Machine
_____ intensive industry. machine None of the above
Recovery of overheads in costing
less than actual is _____ of Under Absorption Over Absorption Under Absorption
overheads. Application None of the above
Recovery of overheads in costing
more than actual is _____ of Over Absorption Under Absorption Over Absorption
overheads. Application None of the above

Factory overheads are recovered as

Direct Wages Direct Wages
a % of _____ wages.
Indirect Wages None of the above
Office overheads are recovered as a
Factory Cost Factory Cost
% of _____ _____ cost. Variable cost Production cost None of the above
Overheads, Labour Overheads, Direct Labour, Overheads, Labour
Labour hour rate = _____.
Hours Machine Hours Machine Hours None of the above Hours
 Overheads, Direct Materials, Direct Labour, Overheads,
Machine hour rate = _____.
Machine hours Machine Hours Machine Hours None of the above Machine hours
Depreciation of machine is _____
Machine Machine
expense. Power Salary None of the above
Repairs and maintenance is _____
Indirect Machine Machine
expense. Direct Selling

Lubricating oil is a _____ expense. Machine

Machine Direct Indirect Labour
Machine hour rate takes into
Time Fact Time Fact
account _____ _____. Cost Fact Place Fact None of the above
The process by which cost items
are charged direct to a cost unit is allocation
called absorption apportionment allocation allotment

A common absorption rate used

through out the following for all
jobs and units of output machine hour rate
irrespective of the department in
department overall absorption blanket absorption
which they were produced is called
machine hour rate absorption rate rate rate
When allocating service
department costs to production
departments, the method that does simple rate method
not consider different cost
behaviour pattern is the step method reciprocal method simple rate method dual rate method

Machine hour rate is followed most of the work is

most of the work is most of the work is overall absorption blanket absorption
when done by machine
done by machine done by labour rate rate

Labour hour rate is followed when

different groups of labour
most of the work is done by
labour machines machines None of the above
When overheads recovered in
costing are less than actual underabsorption
overheads incurred it is called : underabsorption over absorption recovery none of the above
When overheads recovered in
costing are more than actual over absorption
overheads incurred it is called : underabsorption over absorption application all of the above
Factory overheads are recovered as % of cost of
% of Direct wages
a: % of Direct wages production % of sales None of the above
Office overheads are recovered as a
Factory cost
% of : Direct materials Direct wages Factory cost None of the above
Insurance is apportioned on Insured value of Invoice price of Insured value of
machines on the basis of : each machine each machine Area Cost of machine each machine
Depreciation on Salary of Depreciation on
Machine expenses are :
machine Rent of premises supervisors All of the above machine
Depreciation of Repairs &
Machine expenses are : both (ii) & (iii)
Building maintenance Power both (ii) & (iii)
XYZ Ltd. budgeted overheads in
the last year was ` 2,40,000. It’s the
same period were ` 3,60,000 and ` Under absorption `
3,90,000 respectively. What is the 30,000
amount of over at under absorption
Under absorption ` Over absorption ` Under absorption ` Over absorption `
of overheads?
30,000 1,20,000 25,000 1,00,000

Overheads are ` 36,000 and direct

labour hours 36,000, material used
` 54,000, Direct wages ` 45,000 66.67%
hours of machine operation 30,000.
The overheads based on material is
66.67% 60% 70% 80%

Refer to Question No. 16. the

80%
overheads based on direct labour is
80% 70% 69% 75%

Refer to Question No. 16. the

`2
overheads based on labour hour is
`2 `1 `5 `4
Refer to Question No. 16. the
overheads based on machine hour ` 1.20
is ` 1.20 `2 `3 ` 4.50

_____ cost is imputed cost. Interest on Capital Interest on Capital

Variable Out of pocket Opportunity
Interest on capital is _____. Overheads Cost Imputed Cost Sunk Cost Avoidable Cost Imputed Cost
Drawing office salaries _____
Factory Factory
overheads. Office Selling Distribution
Prime cost is _____ cost. Direct Cost Indirect Cost Factory Cost Production Cost Direct Cost
Overheads are _____ cost. Direct Cost Indirect Cost Production Cost Variable Cost Indirect Cost
Factory Cost is = Prime Cost +
Factory Overheads Factory Overheads
_____. Direct Cost Cost of Production None of the above
Cost of Production is = Factory
Office overheads Office overheads
Cost + _____. Factory Overheads Direct Cost Prime Cost
Cost of Sales = Cost of Production
Selling Overheads Selling Overheads
+ _____. Direct Cost Factory Overheads Factory Overheads
Sales = Total _____ + Profit. Production Price Cost Overheads Cost
In costing stock valuation is done Cost,Finished
Cost, Production Cost, Material Cost, Production
at _____ of _____. Goods Cost, Sale
Cost of rectification is _____
Factory Factory
overheads. Selling Office Direct Cost
Stock of WIP is adjusted to _____
Factory
overheads. Office Factory Selling Direct Material
Sale of scrap of material is
Materials Materials
deducted from cost of _____. Production Selling None of the above

Sale of factory scrap is deducted

Factory Factory
from _____ overheads.
Selling Office None of the above
Profit on sale of asset is a _____
Non Cost Non Cost
_____ item. Indirect Cost Direct Cost Variable Cost
Prelim-Expenses written off is a
Non Cost Non Cost
_____ _____ item. Indirect Cost Variable Cost Direct Cost

Notional cost is known as : Imputed cost

Imputed cost Variable cost Opportunity cost Out of pocket cost
Unavoidable cost is called as : Urgent cost Inexcapable cost Implicit cost Explicit cost Inexcapable cost
Interest on capital on : Imputed cost Sunk cost overheads cost avoidable cost Imputed cost
Cost incurred in closing down a
Abandonment cost
department is called as : Abandonment cost Sunk cost shutdown cost urgent cost
The cost involve payment to other
out of pocket cost
parties is called as : out of pocket cost book cost sunk cost urgent cost

Cost which must be incurred to

urgent cost
continue the operations is called :
urgent cost opportunity cost Implicit cost Traceable cost
Dock charges is a : Direct cost Indirect cost Urgent cost Production cost Direct cost
Distribution
Drawing office salaries is a : Factory overheads
Factory overheads Office overheads Selling overheads overheads

Prime cost is equal : Direct cost + Direct cost

Direct cost Factory overheads Factory cost Cost of production

Cost of rectification is a : Factory overheads

Factory overheads office overheads selling overheads direct cost

Stock of WIP is adjusted to : Factory overheads

Office overheads Factory overheads Selling overheads Direct materials
In costing closing stock is valued at
Cost of production
: Cost of production Factory cost Market price Realisable value
Opening stock of material is `
5,000 purchases ` 30,000 closing
` 33,000
stock of materials ` 2,000. Cost of
material used is ` 33,000 ` 30,000 ` 35,000 ` 40,000
Cost of material used is ` 50,000
opening stock of materials is `
4,000 and closing stock of ` 52,000
materials is ` 6,000 purchase of
material is ` 50,000 ` 52,000 ` 60,000 ` 48,000

Cost of production is ` 20,64,070

opening stock of finished goods is `
45,280 and closing stock of ` 20,59,110
finished goods is ` 50,240 Cost of
goods sold is
` 20,59,110 ` 25,00,000 ` 23,00,000 ` 22,00,000
Total cost is ` 23,07,930, profit is
` 25,3/8,723
10% on cost. The sales is ` 25,000 ` 25,3/8,723 ` 23,80,000 ` 20,25,000
Total cost is ` 36,12,000 profit is
` 45,15,000
10% on selling price. Sales is ` 45,15,000 ` 45,50,000 ` 50,00,000 ` 40,25,000
Prime cost is ` 10,00,000, works
overheads is ` 6,63,400. Factory ` 16,63,400
cost is ` 16,63,400 ` 14,50,000 ` 12,40,000 ` 10,25,000

_____ facilitates internal control. reconciliation reconciliation

Overvaluation Computation None of the above
Dividend received is shown in
financial financial
_____ accounts only. Cost Balance Sheet Ignored

Overheads recovered in costing is

overabsorption underabsorption overabsorption
more than actual it is called _____.
Both a & b None of the above
Less overheads recovered in
underabsorption overabsorption underabsorption
costing is called _____. Both a & b None of the above
Donations paid reduces _____
financial profit financial profit
profit. Ignored in costing costing profit Both a & b
Interest on capital reduces
financial profit financial profit
_________ profit. Costing profit Assets None of the above

Underabsorption of overheads in
costing costing
costing increases _____ profit.
financial Assets None of the above
Premium on issue of shares is
Financial costing Financial
shown in _____ P & L A/c. Ignored None of the above
Notional Rent is taken in _____ P
Costing Costing
& L A/c. financial Ignored None of the above
Interest on investment increases
Financial Financial
_____ profit. Costing Assets None of the above

Over valuation of closing stock in

Financial Costing
costing increases_____ profit.
Assets Costing None of the above

Under valuation of closing stock in

Financial Costing Costing
costing decreases _____ profit.
Assets None of the above
Over absorption of overheads in
Costing Financial Costing
costing decreases _____ profit. Assets None of the above

Under absorption of overheads in

Costing Financial Costing
costing increases _____ profit.
Assets None of the above
Dividend paid on shares is debited
Costing Financial Financial
to _____ P & L A/c. Ignored None of the above
Donation paid is debited to _____
Financial Financial
P & L A/c. Ignored in costing Both a & b Costing
Over valuation of closing stock in Increases costing Increases financial Decreases costing Decreases Increases costing
Cost Accounts profit profit profit financial profit profit
Credited in Debited in
Credited in
Interest on Bank Deposits is Credited in costing financial P & L Debited in costing P Financial P & L
financial P & L A/c
P & L A/c A/c & L A/c A/c
Debited to Credited to
Debited to financial
Dividend paid on share capital is Debited to costing financial P & L Credited to costing financial P & L
P & L A/c
P & L A/c A/c P & L A/c A/c
Financial profit is ` 40,000 over
absorption of overheads ` 15,000 55,000
costing profit is 55,000 25,000 30,000 22,000