1. The The components of the prime cost are
a) Direct Material + Direct Labor + Other Direct Cost
b) Direct Labor + Other Direct Cost + FOH
c) Direct Labor + FOH
d) None of the given options
2. For which one of the following industry would you recommend a Job Order Costing system?
a) Oil Refining
b) Grain dealing
c) Beverage production
d) Law Cases
3. Which of the following represents a CVP equation?
a) Sales = Contribution margin (Rs.) + Fixed expenses + Profits
b) Sales = Contribution margin ratio + Fixed expenses + Profits
c) Sales = Variable expenses + Fixed expenses + profits
d) Sales = Variable expenses - Fixed expenses + profits
4. Inventory control aims at ______________
a) Achieving optimization
b) Ensuring against market fluctuations
c) Acceptable customer service at low capital investment
d) Discounts allowed in bulk purchase
5. 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?
a) Machine hours
b) Cost of materials used
c) Direct labor hours
d) Direct labor dollars
6. Wh When prices are rising over time, which of the following inventory costing methods will result in
the lowest gross margin/profits?
a) FIFO
b) LIFO
c) Weighted Average
d) Cannot be determined
7. Cost accounting concepts include all of the following EXCEPT ______________
a) Planning
b) Controlling
c) Sharing
d) Delegating.
8. Prime cost + Factory overhead cost is ______________
a) Conversion cost.
b) Production cost.
c) Total cost.
d) None of given option.
9. If 120 units produced, 100 units were sold @ Rs. 200 per unit. Variable cost related to production &
selling is Rs. 150 per unit and fixed cost is Rs. 5,000. If the management wants to increase sales price by
10%, what will be increasing sales profit of company by increasing unit sales price? (Cost & volume profit
analysis keep in mind while solving)
a) Rs.2,000
b) Rs. 5,000
c) Rs. 7,000
d) None of the given options
10. In the case of plant, the limiting factor may be:
a) Insufficient capacity
b) shortage of experienced salesmen
c) general shortage of power
d) shortage of materials