1. Calculate re-order level from the following:
Safety stock: 1000 units
Consumption per week: 500 units
It takes 12 weeks to reach material from the date of ordering.
a) 1000 units
b) 6000 units
c) 3000 units
d) 7000 units
2. Which of the following is not an avoidable cause of labour turnover:
a) Dissatisfaction with Job
b) Lack of training facilities
c) Low wages and allowances
d) Disability, making a worker unfit for work
3. Calculate the labour turnover rate according to Separation method from the following:
No. of workers on the payroll:
- At the beginning of the month: 500
- At the end of the month: 600
During the month, 5 workers left, 20 workers were discharged and 75 workers were recruited. Of these,
10 workers were recruited in the vacancies of those leaving and while the rest were engaged for an
expansion scheme.
a) 4.55%
b) 1.82%
c) 6%
d) 3%
4. Most suitable basis for apportioning insurance of machine would be:
a) Floor Area
b) Value of Machines
c) No. of Workers
d) No. of Machines
5. Which of the following is not a reason for an idle time variance?
a) Wage rate increase
b) Machine breakdown
c) Illness or injury to worker
d) Non- availability of material
6. The actual output of 162,500 units and actual fixed costs of Rs. 87000 were exactly as budgeted.
However, the actual expenditure of Rs 300,000 was Rs. 18,000 over budget.
What was the budget variable cost per unit?
a) Rs 1.20
b) Rs 1.31
c) Rs1.42
d) Rs 1.50
7. S produces and sells one product, P, for which the data are as follows:
Selling price Rs 28
Variable cost Rs 16
Fixed cost Rs 4
The fixed costs are based on a budgeted production and sales level of 25,000 units for the next period.
Due to market changes both the selling price and the variable cost are expected to increase above the
budgeted level in the next period.
If the selling price and variable cost per unit increase by 10% and 8% respectively, by how much must
sales volume change, compared with the original budgeted level, in order to achieve the original
budgeted profit for the period?
a) 10.1% decrease
b) 11.2% decrease
c) 13.3% decrease
d) 16.0% decrease
8. A company calculates the prices of jobs by adding overheads to the prime cost and adding 30% to
total costs as a profit margin. Job number Y256 was sold for Rs1690 and incurred overheads of Rs 694.
What was the prime cost of the job?
a) Rs 489
b) Rs 606
c) Rs 996
d) Rs 1300
9. A company makes a single product and incurs fixed costs of Rs. 30,000 per annum. Variable cost per
unit is Rs. 5 and each unit sells for Rs. 15. Annual sales demand is 7,000 units. The breakeven point is:
a) 2,000 units
b) 3,000 units
c) 4,000 units
d) 6,000 units
10. The cost per unit of a product manufactured in a factory amounts to Rs. 160 (75% variable) when the
production is 10,000 units. When production increases by 25%, the cost of production will be Rs. per
unit
a) Rs. 145
b) Rs. 150
c) Rs. 152
d) Rs. 140