Accounting for Business Decisions | Chapter 3 | Part 1 | MBA MCQs | ABD

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1. Which of these is not an objective of Cost Accounting?
   1.   Ascertainment of Cost
   2.   Determination of Selling Price
   3.   Cost Control and Cost reduction
   4.   Assisting Shareholders in decision making
2. Fixed cost is a cost:
   1.   Which changes in total in proportion to changes in output
   2.   Which is partly fixed and partly variable in relation to output
   3.   Which do not change in total during a given period despise changes in output
   4.   Which remains same for each unit of output
3. Uncontrollable costs are the costs which be influenced by the action of a specified member of an undertaking.
   1.   can not
   2.   can
   3.   may or may not
   4.   must
4. Element/s of Cost of a product are:
   1.   Material only
   2.   Labour only
   3.   Expenses only
   4.   Material, Labour and expenses
5. Abnormal cost is the cost:
   1.   Cost normally incurred at a given level of output
   2.   Cost not normally incurred at a given level of output
   3.   Cost which is charged to customer
   4.   Cost which is included in the cost of the product
6. Conversion cost includes cost of converting..........into........
   1.   Raw material, WIP
   2.   Raw material, Finished goods
   3.   WIP, Finished goods
   4.   Finished goods, Saleable goods
7. Sunk costs are:
   1.   relevant for decision making
   2.   Not relevant for decision making
   3.   cost to be incurred in future
   4.   Future costs
8. Calculate the prime cost from the following information:
   Direct material purchased: Rs. 1,00,000
   Direct material consumed: Rs. 90,000
   DIMR
   Direct labour: Rs. 60,000
   Direct expenses: Rs. 20,000
   Manufacturing overheads: Rs. 30,000
   1.   Rs. 1,80,000
   2.   Rs. 2,00,000
   3.   Rs. 1, 70,000
   4.   Rs. 2,10,000
9. Total cost of a product: Rs. 10,000
   Profit: 25% on Selling Price Profit is:
   1.   Rs. 2,500
   2.   Rs. 3,000
   3.   Rs. 3,333
   4.   Rs. 2,000
10. Calculate cost of sales from the following: Net Works cost: Rs. 2,00,000
    Office & Administration Overheads: Rs. 1,00,000
    Opening stock of WIP: Rs. 10,000
    Closing Stock of WIP: Rs. 20,000 Closing stock of finished goods: Rs. 30,000
    There was no opening stock of finished goods.
    Selling overheads: Rs. 10,000
    1.   Rs. 2,70,000
    2.   Rs. 3,00,000
    3.   Rs. 2,80,000
    4.   Rs. 3,20,000
11. ______________ provides a specialized technique, which provides prompt and accurate information regarding the cost of producing and selling an article.
    1.   Cost Accounting
    2.   Financial Accounting
    3.   Management Accounting
    4.   Cost & Financial Accounting
12. The amount of expenditure incurred on, or attributable to a given thing is called as ______________.
    1.   Cost
    2.   Price
    3.   Expense
    4.   Fixed Cost
13. The techniques and process of ascertaining cost is called as ______________.
    1.   Costing
    2.   Accounting
    3.   Financing
    4.   Management Accounting
14. With the help of ______________, we can control the cost.
    1.   Costing Methods
    2.   Cost Accounting
    3.   Management Accounting
    4.   Costing Techniques
15. With the help of ______________, we can find out the cost.
    1.   Costing Methods
    2.   Cost Accounting
    3.   Management Accounting
    4.   Costing Techniques
16. The total of Direct Material + Direct Labour + Direct Expenses is called as ______________.
    1.   Total Cost
    2.   Factory Cost
    3.   Prime Cost
    4.   Main Cost
17. Direct Expenses are also called as ______________.
    1.   Chargeable Expenses
    2.   Factory Expenses
    3.   Works Expenses
    4.   General Expenses
18. Depreciation is an example of ______________.
    1.   Direct Expenses
    2.   Factory Expenses
    3.   General Expenses
    4.   Indirect Expenses
19. The aggregate of all indirect expenses is ______________.
    1.   Total Cost
    2.   Total Expense
    3.   Overheads
    4.   Factory Overheads
20. Factory Cost is also called as ______________.
    1.   Total Cost
    2.   Cost of Production
    3.   Works Cost
    4.   Factory Overheads