MCQs:

Please write the correct option:

32.

Which of the following is least likely to be the basis of cost apportionment may relate to rent, heating and lighting?Required to answer. Single choice.

(2 Points)

area

number of employees

weight of the products

number of products

33.

let suppose you have opened a juice bar. There are 2 major processes.

Process-1 consists of fruit processing involves peeling, grading, cutting. Average input 10KG costing 500 RS, after process-1 you are expected to get 7000 grams (7 kg) of processed fruit. At the same time labor input costs 500 per hour, overheads cost 500 Rs per hour and is based upon pre-determined overhead absorption rate. The whole process requires 2 hours. The cost of fruit per Kg is 500.

What should be the cost allocated to normal losses at the end of process-1?Required to answer. Single choice.

(2 Points)

Zero

2100

2000

1500

34.

Both favorable and unfavorable variances need to be investigated:Required to answer. Single choice.

(2 Points)

True

False

35.

You are working as a trainee at ICU manufacturers and a product BBA has standard cost specifications time 1 hour per unit and cost Rs 50 per labour. At the of the period the results indicate that actual production hours were 10,400 and idle time 400 hours. The total BBA manufactured were 10,200.

The Labour labour efficiency variance should be.Required to answer. Single choice.

(4 Points)

Favorable 40000

Favorable 80,000

Unfvaorable 30,000

Unfvaorable 35,000

Niether favorable nor unfavorable

36.

Would you like 5 extra marks?Required to answer. Single choice.

(5 Points)

Yes

No

Maybe

37.

Marginal costing is also known as:Required to answer. Single choice.

(2 Points)

Direct costing

Both a and b

Variable costing

None of the above

38.

Which of the following best describes volume variance:Required to answer. Single choice.

(3 Points)

There is a rise in overhead rate per hour

There is a decrease or increase in actual output compared to the budgeted output

There is a decline in overhead rate per hour

None of the above

39.

Which is the most important factor to consider in order to try to maximize profit?Required to answer. Single choice.

(3 Points)

contribution per unit of the product

variable cost per unit of the product

product unit selling price

contribution per unit of limiting factor

40.

The over absorption occurs when the actual production exceeds the budgeted productionRequired to answer. Single choice.

(2 Points)

The actual production is equal to budgeted production

The actual production is less then budgeted production

The actual production exceeds the budgeted production

None of the above

41.

Which method of costing values inventory at the variable production cost(only including variable production overheads) of a product?Required to answer. Single choice.

(2 Points)

Absorption Costing

Target Costing

Activity Based Costing

none of above

42.

let suppose you have opened a juice bar. There are 2 major processes.

Process-1 consists of fruit processing involves peeling, grading, cutting. Average input 10KG costing 500 RS, after process-1 you are expected to get 7000 grams (7 kg) of processed fruit. At the same time labor input costs 500 per hour, overheads cost 500 Rs per hour and is based upon pre-determined overhead absorption rate. The whole process requires 2 hours. The cost of fruit per Kg is 500.

What should be the total cost of process-1?Required to answer. Single choice.

(3 Points)

5000

5500

none of above

7000

43.

Using the marginal costing method, the contribution is equal to total sales revenue lessRequired to answer. Single choice.

(2 Points)

total costs

fixed costs

direct labour costs

variable costs

none of above

44.

The process or point at which the two products come into being or become distinct is known as:Required to answer. Single choice.

(2 Points)

All of the above

EPU

None of the above

Break-Up Point

Split-Off point

45.

Which of one of the following costing systems can be termed as best aid for decision makingRequired to answer. Single choice.

(3 Points)

ABC costing

Absorbtion costing

Target costing

Marginal costing

46.

One of the best ways to allocate overhead cost should be allocated on the basis of?Required to answer. Single choice.

(2 Points)

Direct labor hours

Direct labor costs

An activity basis which relates to cost incurrence

Machine hours

47.

Which of the following costs cannot be considred as relevant in decision-making?

(This question has more than one correct answer, you need to select all of the correct answers to gain marks)Required to answer. Multiple choice.

(5 Points)

Salary of CEO

Deperication of Building

Additional fixed cost resulting from decesion

Historical cost of an asset

Increase in variable cost as result of the decesion

Loss of revnues due to decesion

Accounting profits

48.

Which of the following cannot be considered as a limitation of activity-based costing?

(This question has more than one correct answer, you need to select all of the correct answers to gain marks)Required to answer. Multiple choice.

(6 Points)

Activity-based costing relies on the assumption that the cost in each cost pool is strictly proportional to its cost measure

A variety of activity measures are used

Costs are accumulated by each major activity

All costs in an activity cost pool pertain to a single activity

49.

CAB4ME Ltd operates a personal transportation business that specializes in contracts to provide cars dedicated to specific corporate customers. One of the CAB4ME vehicles, which originally cost 52,800, has an estimated life of 10 years and is depreciated at the rate of 5,280 a year.

A contract has now been proposed, which would require the use of the vehicle for ten months.

The current net realizable value of the vehicle is 22,000. If the vehicle is used for this contract its value is expected to fall to 10,000. The netbook value of the vehicle at present is 29,000.

Routine maintenance of the vehicle currently costs 7000 for the whole period. For this contract, these costs including fuel and driver costs would increase to 18000 a month.

What are the relevant costs of using the vehicle for this contract should beRequired to answer. Single choice.

(4 Points)

28000

35000

33000

20000

None of above