Xpert
11-27-2010, 02:02 AM
MIDTERM EXAMINATION
Spring 2010
MGT402- Cost & Management Accounting (Session - 2)
Question No: 1 ( Marks: 1 ) - Please choose one
Which of the following product cost is Included in prime cost and conversion cost?
► Direct labor
► Manufacturing overhead
► Direct material
► Work in Process
Question No: 2 ( Marks: 1 ) - Please choose one
file:///C:/DOCUME%7E1/rabnol/LOCALS%7E1/Temp/msohtml1/01/clip_image002.gifOver which of the following is the manager of the Profit center likely to have control?
I. Selling process
II. Controllable costs
III. Apportioned head office costs
IV. Capital investment in the center
► I, II and III
► I, II and IV
► I and II
► I, II, III and IV
Question No: 3 ( Marks: 1 ) - Please choose one
Machine lubricant used on processing equipment in a manufacturing plant would be classified as a:
► Period cost (manufacturing overhead)
► Period cost (Selling, General & Admin)
► Product cost (manufacturing overhead)
► Product cost (Selling, General & Admin)
Question No: 4 ( Marks: 1 ) - Please choose one
Which of the following costs would NOT be a period cost?
► Indirect materials
► Administrative salaries
► Advertising costs
► Selling costs
Question No: 5 ( Marks: 1 ) - Please choose one
Which of the following is CORRECT to calculate cost of goods manufactured?
► Direct labor costs plus total manufacturing costs
► The beginning work in process inventory plus total manufacturing costs and subtract the ending work in process inventory
► Beginning raw materials inventory plus direct labor plus factory overhead
► Conversion costs and work in process inventory adjustments results in cost of goods manufactured
Question No: 6 ( Marks: 1 ) - Please choose one
While calculating the EOQ, carrying cost is taken as the:
► %age of unit cost
► %age of ordering cost
► %age of annual required units
► Total unit cost
Question No: 7 ( Marks: 1 ) - Please choose one
If, Wage rate Rs. 100/hr
Working hours 8 hours
Shift allowance Rs. 500
Total pay will be:
► Rs. 800
► Rs. 500
► Rs. 1,300
► Rs. 300
Question No: 8 ( Marks: 1 ) - Please choose one
All of the following are avoidable causes of labor turnover EXCEPT:
► Personal betterment of worker
► Dissatisfaction with job
► Bad working conditions
► Long and odd working hours
Question No: 9 ( Marks: 1 ) - Please choose one
The term cost allocation is described as:
► The costs that can be identified with specific cost centers.
► The costs that can not be identified with specific cost centers.
► The total cost of factory overhead needs to be distributed among specific cost centers.
► None of the given options
Question No: 10 ( Marks: 1 ) - Please choose one
Over applied FOH will always result when a predetermined FOH rate is applied and:
► Production is greater than defined capacity
► Actual overhead costs are less than budgeted
► Budgeted capacity is less than normal capacity
► Actual overhead incurred is less than applied Overhead
Question No: 11 ( Marks: 1 ) - Please choose one
Capacity Variance / Volume Variance arises due to
► Difference between Absorbed factory overhead and budgeted factory for capacity attained
► Difference between Absorbed factory overhead and absorption rate
► Difference between Budgeted factory overhead for capacity attained and FOH actually incurred
► None of the given options
Question No: 12 ( Marks: 1 ) - Please choose one
The difference over the period of time between actual and applied FOH will usually be minimal when the predetermined overhead rate is based on:
► Normal capacity
► Designed capacity
► Direct Labor hours
► Machine hours
Question No: 13 ( Marks: 1 ) - Please choose one
The cost that is subject to actual payment or will be paid for in future is called:
► Fixed cost
► Step cost
► Explicit cost
► Imputed cost
Question No: 14 ( Marks: 1 ) - Please choose one
Under perpetual Inventory system the Inventory is treated as:
► Assets
► Liability
► Income
► Expense
Question No: 15 ( Marks: 1 ) - Please choose one
During the year 60,000 units put in to process.55, 000 units were completed. Closing WIP were 25,000 units, 40% completed. How much the equivalent units of output would be produced?
► 25,000 units
► 10,000 units
► 65,000 units
► 80,000 units
Question No: 16 ( Marks: 1 ) - Please choose one
The components of total factory cost are:
► Direct Material + Direct Labor
► Direct Labor + FOH
► Prime Cost only
► Prime Cost + FOH
Question No: 17 ( Marks: 1 ) - Please choose one
The FIFO inventory costing method (when using a perpetual inventory system) assumes that the cost of the earliest units purchased is allocated in which of the following ways?
► First to be allocated to the ending inventory
► Last to be allocated to the cost of goods sold
► Last to be allocated to the ending inventory
► First to be allocated to the cost of good sold
Question No: 18 ( Marks: 1 ) - Please choose one
Depreciation based on the number of units produced would be classified as:
► Out of pocket cost
► Differential cost
► Variable cost
► Fixed cost
Question No: 19 ( Marks: 1 ) - Please choose one
You are required to calculate number of units sold of ABC Fans Company for the first quarter of the year with the help of given information.
Inventory opening
Finished goods (100 fans)
Rs. 43000
Direct material
Rs. 268000
Inventory closing
Finished goods (200 fans)
Not known
Direct material
Rs. 167000
No of units manufactured
567 units
► 300 units
► 767 units
► 467 units
► 667 units
Question No: 20 ( Marks: 1 ) - Please choose one
Cost of material consumed under LIFO costing method is Rs. 6,000. Conversion Cost is Rs. 16,500. 1,000 units of the product were manufactured out of which 800 @ Rs. 30 units sold. There were no beginning and ending inventories of work in process and finished goods.
Required: Calculate per unit cost with the help of given information.
► Rs. 22.50
► Rs.16.50
► Rs. 6.00
► Rs. 28.13
Question No: 21 ( Marks: 1 ) - Please choose one
Who issues the Material Requisition form?
► Store incharge
► Work station incharge
► Supplier
► Manager
Question No: 22 ( Marks: 1 ) - Please choose one
Which of the following functions are fulfilled by Goods Received Note?
i. Provides information to update the inventory records on receipt of goods
ii. Provides information to check the quantity on the supplier’s invoice
iii. Provides information to check the price on the supplier’s invoice
► (i) only
► (i) and (ii) only
► (i) and (iii) only
► (ii) and (iii) only
Question No: 23 ( Marks: 1 ) - Please choose one
Inventory of Rs. 96,000 was purchased during the year. The cost of goods sold was Rs. 90,000 and the ending inventory was Rs. 18,000. What was the inventory turnover ratio for the year?
► 5.0 times
► 5.3 times
► 6.0 times
► 6.4 times
Question No: 24 ( Marks: 1 ) - Please choose one
Calculate total salary received with the given data.
Salary
Rs.5000
Per Piece commission
10 % per piece
Unit sold
700 pieces
Price per piece
Rs. 10
► Rs. 5,100
► Rs. 5,000
► Rs. 5,600
► Rs. 5,700
Question No: 25 ( Marks: 1 ) - Please choose one
Which of the given statement is CORRECT for Indirect Labor?
► It is charged to factory over head account
► It is charged to work in process
► It is entire production
► It is charged to administrative expenses
Question No: 26 ( Marks: 1 ) - Please choose one
A production worker paid salary of Rs. 700 per month plus an extra Rs. 5 for each unit produced during the month. This labor cost is best described as:
► A fixed cost
► A variable cost
► A semi variable cost
► A step fixed cost
Question No: 27 ( Marks: 1 ) - Please choose one
If absorbed factory overhead is Rs.155,000 and Budgeted factory overhead for actual volume is Rs. 110,000 then difference of both will be:
► Unfavorable Spending variance of Rs. 45,000
► Favorable Spending variance of Rs. 45,000
► Favorable Volume variance of Rs. 45,000
► Favorable Budget variance of Rs. 45,000
Question No: 28 ( Marks: 1 ) - Please choose one
In case of process costing, the output of existing department will be considered as _____________ for subsequent department.
► Finished product
► Raw material
► Purchases
► Inventory
Question No: 29 ( Marks: 1 ) - Please choose one
With reference to cost of production report, which of the following is NOT included in Quantity Schedule?
► Unit put into process
► Equivalent units produced
► Units transferred out to subsequent department
► Units reconceived from preceding department
Question No: 30 ( Marks: 1 ) - Please choose one
Which of the given cost is NOT required to prepare Cost of Production Report?
► Period cost
► Material cost
► Labour cost
► Factory overhead cost
Question No: 31 ( Marks: 1 ) - Please choose one
Which of the given is CORRECT for accounting entry of closing balance of Work In Process (WIP)?
► WIP a/c Dr and Inventory a/c Cr
► Inventory a/c Dr and WIP a/c Cr
► WIP a/c Dr and payroll a/c Cr
► There is no accounting entry for closing balance of WIP
Question No: 32 ( Marks: 1 ) - Please choose one
Accounting entry of closing balance can be recorded for:
► Income a/c and Expenses a/c
► Liability a/c and Owner’s equity a/c
► Asset a/c and Liability a/c
► Liability a/c and Expenses a/c
Question No: 33 ( Marks: 1 ) - Please choose one
Identify units transferred out with the help of given data:
Units
Units still in process (100%material, 75% conversion )
4,000
Lost units
2,000
Units started in process
50,000
► 6,000 units
► 44,000 units
► 52,000 units
► 56,000 units
Question No: 34 ( Marks: 1 ) - Please choose one
You are required to identify how many good units were outputs from the process.
Units
Units put in process
4,000
Lost units
500
Units in process
200
► 3,300 units
► 4,000 units
► 4,200 units
► 4,500 units
Question No: 35 ( Marks: 3 )
Write a short note on Equivalent Production.
Equivalent Production is a very important part of cost of production report. We prepare it in process costing system. It is thenumber of partially completed units considered to be equivalent to a greater number of fully completed units. This is used to calculate per unit cost.
Question No: 36 ( Marks: 5 )
Started in process, 9,200 units, Completed and on hand, 700 units, in process at end of period, 1,000 units, complete as to materials and labor & factory overhead 4/10. Transferred 7,500 units to next department
Required: Compute the Quantity schedule and equivalent production units.
Quantity Schedule:
Units Put into Process: 9200
Transferred to Next Department: 7500
Completed but in hand 700
Units still in process 1000
9200
Calculation of Equivalent Units Produced:
(100% of completed units + % of units in process)
Direct Material: 7500+700+(1000x100%) = 9200
Labor & FOH : 7500+700+(1000x4/10) = 8600
Question No: 37 ( Marks: 5 )
Calculate pre-determined factory overhead rate based on:
iv. Units of output
v. Direct labour hours
vi. Direct labour cost
vii. Direct material
viii. Prime cost
The necessary data are as follows:
Budgeted over head:
Fixed
Variable
Total
Rs. 100,000
Rs. 250,000
Rs. 350,000
Budgeted material cost
Rs. 150,000
Budgeted labour cost
Rs. 275,000
Budgeted direct labour hours
150,000
Budgeted machine hours
60,000
Budgeted units of output
150,000
i. Units of output
Budgeted Overhead / Budgeted Units of Output
350,000/150,000 = 2.3333
ii. Direct labour hours
Budgeted Overhead / Budgeted Direct Labour Hours
350,000/150,000 = 2.3333
iii. Direct labour cost
Budgeted Overhead / Budgeted Direct Labour Cost
350,000/275,000 = 1.2727
iv. Direct material
Budgeted Overhead / Budgeted Direct Material Cost
350,000/150,000 = 2.3333
v. Prime cost
Budgeted Overhead / Budgeted Prime Cost
350,000/(150,000+275000) = 0.8235
Spring 2010
MGT402- Cost & Management Accounting (Session - 2)
Question No: 1 ( Marks: 1 ) - Please choose one
Which of the following product cost is Included in prime cost and conversion cost?
► Direct labor
► Manufacturing overhead
► Direct material
► Work in Process
Question No: 2 ( Marks: 1 ) - Please choose one
file:///C:/DOCUME%7E1/rabnol/LOCALS%7E1/Temp/msohtml1/01/clip_image002.gifOver which of the following is the manager of the Profit center likely to have control?
I. Selling process
II. Controllable costs
III. Apportioned head office costs
IV. Capital investment in the center
► I, II and III
► I, II and IV
► I and II
► I, II, III and IV
Question No: 3 ( Marks: 1 ) - Please choose one
Machine lubricant used on processing equipment in a manufacturing plant would be classified as a:
► Period cost (manufacturing overhead)
► Period cost (Selling, General & Admin)
► Product cost (manufacturing overhead)
► Product cost (Selling, General & Admin)
Question No: 4 ( Marks: 1 ) - Please choose one
Which of the following costs would NOT be a period cost?
► Indirect materials
► Administrative salaries
► Advertising costs
► Selling costs
Question No: 5 ( Marks: 1 ) - Please choose one
Which of the following is CORRECT to calculate cost of goods manufactured?
► Direct labor costs plus total manufacturing costs
► The beginning work in process inventory plus total manufacturing costs and subtract the ending work in process inventory
► Beginning raw materials inventory plus direct labor plus factory overhead
► Conversion costs and work in process inventory adjustments results in cost of goods manufactured
Question No: 6 ( Marks: 1 ) - Please choose one
While calculating the EOQ, carrying cost is taken as the:
► %age of unit cost
► %age of ordering cost
► %age of annual required units
► Total unit cost
Question No: 7 ( Marks: 1 ) - Please choose one
If, Wage rate Rs. 100/hr
Working hours 8 hours
Shift allowance Rs. 500
Total pay will be:
► Rs. 800
► Rs. 500
► Rs. 1,300
► Rs. 300
Question No: 8 ( Marks: 1 ) - Please choose one
All of the following are avoidable causes of labor turnover EXCEPT:
► Personal betterment of worker
► Dissatisfaction with job
► Bad working conditions
► Long and odd working hours
Question No: 9 ( Marks: 1 ) - Please choose one
The term cost allocation is described as:
► The costs that can be identified with specific cost centers.
► The costs that can not be identified with specific cost centers.
► The total cost of factory overhead needs to be distributed among specific cost centers.
► None of the given options
Question No: 10 ( Marks: 1 ) - Please choose one
Over applied FOH will always result when a predetermined FOH rate is applied and:
► Production is greater than defined capacity
► Actual overhead costs are less than budgeted
► Budgeted capacity is less than normal capacity
► Actual overhead incurred is less than applied Overhead
Question No: 11 ( Marks: 1 ) - Please choose one
Capacity Variance / Volume Variance arises due to
► Difference between Absorbed factory overhead and budgeted factory for capacity attained
► Difference between Absorbed factory overhead and absorption rate
► Difference between Budgeted factory overhead for capacity attained and FOH actually incurred
► None of the given options
Question No: 12 ( Marks: 1 ) - Please choose one
The difference over the period of time between actual and applied FOH will usually be minimal when the predetermined overhead rate is based on:
► Normal capacity
► Designed capacity
► Direct Labor hours
► Machine hours
Question No: 13 ( Marks: 1 ) - Please choose one
The cost that is subject to actual payment or will be paid for in future is called:
► Fixed cost
► Step cost
► Explicit cost
► Imputed cost
Question No: 14 ( Marks: 1 ) - Please choose one
Under perpetual Inventory system the Inventory is treated as:
► Assets
► Liability
► Income
► Expense
Question No: 15 ( Marks: 1 ) - Please choose one
During the year 60,000 units put in to process.55, 000 units were completed. Closing WIP were 25,000 units, 40% completed. How much the equivalent units of output would be produced?
► 25,000 units
► 10,000 units
► 65,000 units
► 80,000 units
Question No: 16 ( Marks: 1 ) - Please choose one
The components of total factory cost are:
► Direct Material + Direct Labor
► Direct Labor + FOH
► Prime Cost only
► Prime Cost + FOH
Question No: 17 ( Marks: 1 ) - Please choose one
The FIFO inventory costing method (when using a perpetual inventory system) assumes that the cost of the earliest units purchased is allocated in which of the following ways?
► First to be allocated to the ending inventory
► Last to be allocated to the cost of goods sold
► Last to be allocated to the ending inventory
► First to be allocated to the cost of good sold
Question No: 18 ( Marks: 1 ) - Please choose one
Depreciation based on the number of units produced would be classified as:
► Out of pocket cost
► Differential cost
► Variable cost
► Fixed cost
Question No: 19 ( Marks: 1 ) - Please choose one
You are required to calculate number of units sold of ABC Fans Company for the first quarter of the year with the help of given information.
Inventory opening
Finished goods (100 fans)
Rs. 43000
Direct material
Rs. 268000
Inventory closing
Finished goods (200 fans)
Not known
Direct material
Rs. 167000
No of units manufactured
567 units
► 300 units
► 767 units
► 467 units
► 667 units
Question No: 20 ( Marks: 1 ) - Please choose one
Cost of material consumed under LIFO costing method is Rs. 6,000. Conversion Cost is Rs. 16,500. 1,000 units of the product were manufactured out of which 800 @ Rs. 30 units sold. There were no beginning and ending inventories of work in process and finished goods.
Required: Calculate per unit cost with the help of given information.
► Rs. 22.50
► Rs.16.50
► Rs. 6.00
► Rs. 28.13
Question No: 21 ( Marks: 1 ) - Please choose one
Who issues the Material Requisition form?
► Store incharge
► Work station incharge
► Supplier
► Manager
Question No: 22 ( Marks: 1 ) - Please choose one
Which of the following functions are fulfilled by Goods Received Note?
i. Provides information to update the inventory records on receipt of goods
ii. Provides information to check the quantity on the supplier’s invoice
iii. Provides information to check the price on the supplier’s invoice
► (i) only
► (i) and (ii) only
► (i) and (iii) only
► (ii) and (iii) only
Question No: 23 ( Marks: 1 ) - Please choose one
Inventory of Rs. 96,000 was purchased during the year. The cost of goods sold was Rs. 90,000 and the ending inventory was Rs. 18,000. What was the inventory turnover ratio for the year?
► 5.0 times
► 5.3 times
► 6.0 times
► 6.4 times
Question No: 24 ( Marks: 1 ) - Please choose one
Calculate total salary received with the given data.
Salary
Rs.5000
Per Piece commission
10 % per piece
Unit sold
700 pieces
Price per piece
Rs. 10
► Rs. 5,100
► Rs. 5,000
► Rs. 5,600
► Rs. 5,700
Question No: 25 ( Marks: 1 ) - Please choose one
Which of the given statement is CORRECT for Indirect Labor?
► It is charged to factory over head account
► It is charged to work in process
► It is entire production
► It is charged to administrative expenses
Question No: 26 ( Marks: 1 ) - Please choose one
A production worker paid salary of Rs. 700 per month plus an extra Rs. 5 for each unit produced during the month. This labor cost is best described as:
► A fixed cost
► A variable cost
► A semi variable cost
► A step fixed cost
Question No: 27 ( Marks: 1 ) - Please choose one
If absorbed factory overhead is Rs.155,000 and Budgeted factory overhead for actual volume is Rs. 110,000 then difference of both will be:
► Unfavorable Spending variance of Rs. 45,000
► Favorable Spending variance of Rs. 45,000
► Favorable Volume variance of Rs. 45,000
► Favorable Budget variance of Rs. 45,000
Question No: 28 ( Marks: 1 ) - Please choose one
In case of process costing, the output of existing department will be considered as _____________ for subsequent department.
► Finished product
► Raw material
► Purchases
► Inventory
Question No: 29 ( Marks: 1 ) - Please choose one
With reference to cost of production report, which of the following is NOT included in Quantity Schedule?
► Unit put into process
► Equivalent units produced
► Units transferred out to subsequent department
► Units reconceived from preceding department
Question No: 30 ( Marks: 1 ) - Please choose one
Which of the given cost is NOT required to prepare Cost of Production Report?
► Period cost
► Material cost
► Labour cost
► Factory overhead cost
Question No: 31 ( Marks: 1 ) - Please choose one
Which of the given is CORRECT for accounting entry of closing balance of Work In Process (WIP)?
► WIP a/c Dr and Inventory a/c Cr
► Inventory a/c Dr and WIP a/c Cr
► WIP a/c Dr and payroll a/c Cr
► There is no accounting entry for closing balance of WIP
Question No: 32 ( Marks: 1 ) - Please choose one
Accounting entry of closing balance can be recorded for:
► Income a/c and Expenses a/c
► Liability a/c and Owner’s equity a/c
► Asset a/c and Liability a/c
► Liability a/c and Expenses a/c
Question No: 33 ( Marks: 1 ) - Please choose one
Identify units transferred out with the help of given data:
Units
Units still in process (100%material, 75% conversion )
4,000
Lost units
2,000
Units started in process
50,000
► 6,000 units
► 44,000 units
► 52,000 units
► 56,000 units
Question No: 34 ( Marks: 1 ) - Please choose one
You are required to identify how many good units were outputs from the process.
Units
Units put in process
4,000
Lost units
500
Units in process
200
► 3,300 units
► 4,000 units
► 4,200 units
► 4,500 units
Question No: 35 ( Marks: 3 )
Write a short note on Equivalent Production.
Equivalent Production is a very important part of cost of production report. We prepare it in process costing system. It is thenumber of partially completed units considered to be equivalent to a greater number of fully completed units. This is used to calculate per unit cost.
Question No: 36 ( Marks: 5 )
Started in process, 9,200 units, Completed and on hand, 700 units, in process at end of period, 1,000 units, complete as to materials and labor & factory overhead 4/10. Transferred 7,500 units to next department
Required: Compute the Quantity schedule and equivalent production units.
Quantity Schedule:
Units Put into Process: 9200
Transferred to Next Department: 7500
Completed but in hand 700
Units still in process 1000
9200
Calculation of Equivalent Units Produced:
(100% of completed units + % of units in process)
Direct Material: 7500+700+(1000x100%) = 9200
Labor & FOH : 7500+700+(1000x4/10) = 8600
Question No: 37 ( Marks: 5 )
Calculate pre-determined factory overhead rate based on:
iv. Units of output
v. Direct labour hours
vi. Direct labour cost
vii. Direct material
viii. Prime cost
The necessary data are as follows:
Budgeted over head:
Fixed
Variable
Total
Rs. 100,000
Rs. 250,000
Rs. 350,000
Budgeted material cost
Rs. 150,000
Budgeted labour cost
Rs. 275,000
Budgeted direct labour hours
150,000
Budgeted machine hours
60,000
Budgeted units of output
150,000
i. Units of output
Budgeted Overhead / Budgeted Units of Output
350,000/150,000 = 2.3333
ii. Direct labour hours
Budgeted Overhead / Budgeted Direct Labour Hours
350,000/150,000 = 2.3333
iii. Direct labour cost
Budgeted Overhead / Budgeted Direct Labour Cost
350,000/275,000 = 1.2727
iv. Direct material
Budgeted Overhead / Budgeted Direct Material Cost
350,000/150,000 = 2.3333
v. Prime cost
Budgeted Overhead / Budgeted Prime Cost
350,000/(150,000+275000) = 0.8235