Final Term Current MGT402 Cost & Management Accounting 15 August 2010

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FINALTERM EXAMINATION
Fall 2010
MGT402- Cost & Management Accounting (Session - 1)
These were mcq's and short quest I noted today's paper 15-08-2010
copied from other material. Please confirm answer from your own source.


Time: 90 min
Marks: 69


When closing stock is over valuate, what would its effect on profit?
► Can not determined with given statement
► It will Increase the profit
► It will decrease the profit
► No effect on profit


firm sells bags for Rs. 14 each. The variable cost for each unit is Rs. 8. What is the contribution margin per unit?
► Rs. 6
► Rs. 12
► Rs. 14
► Rs. 8


Which of the following is a process by which managers analyze options available to set courses of action by the organization?
► Heuristics method
► Decision making
► The Delphi technique
► Systematic error


short term decision making which of the following is not concerned?
► Cash flows
► Time value of money
► Pay back period
► Capital investments

All of the following are features of a relevant cost EXCEPT:
► They affect the future cost
► They cause an increment in cost
► Relevant cost is a sunk cost
► They affect the future cash flows


Which of the following statement is TRUE about historical cost?
► It is always relevant to decision making
► It is always irrelevant to decision making
► It is always an opportunity cost
► It is always realizable value




cost accounting, unavoidable loss is charged to which of the following?

► Factory over head control account
► Work in process control account
► Marketing overhead control account
► Administration overhead control account


average cost is also known as:
► Variable cost
► Unit cost
► Total cost
► Fixed cost

Which of the following loss is not included as part of the cost of transferred or finished goods, but rather treated as a period cost?
► Operating loss
► Abnormal loss
► Normal loss
► Non-operating loss

While constructing a Break even chart, the gap between sales line and variable cost line shows which of the following?
► Fixed cost
► Break even point
► Contribution margin
► Variable cost


firm is using activity-based budgeting, the firm would use this in place of which of the following budgets?
► Direct labor budget
► Direct materials budget
► Revenue budget
► Manufacturing overhead budget


Which of the following is NOT a relevant cost to decision making?

► Opportunity costs
► Relevant benefits
► Avoidable costs
► Sunk costs




What would be the attitude of the management in treating Sunk costs in decision making?
► A periodic investment of cash resources that has been made and should be relevant for decision making
► It is a past cost which is not directly relevant in decision making
► Management will treat it as variable cost each time in decision making
► None of the given options


Which of the following item is NOT included in FOH cost budget?
► Indirect material cost
► Indirect labor cost
► Power and fuel
► Direct material cost

Which of the following budget includes an item of indirect labor cost?
► FOH cost budget
► Direct labor cost budget
► Direct material cost budget
► None of the given options


Income Statement Budget include(s) all of the following EXCEPT:
► Selling & distribution expenses budget
► General & administrative expenses budget
► Financial charges budget
► Cash budget


Deficit budget can be compensated through:

► Expenses
► Borrowings
► Revenues
► Investments


Variable costing is also known as:
► Direct Costing
► Marginal Costing
► Both Direct Costing & Marginal Costing
► Indirect Costing


short term decision making which of the following is not concerned?
► Cash flows
► Time value of money
► Pay back period
► Capital investments


Which of the following costs would NOT be a period cost?
► Indirect materials
► Administrative salaries
► Advertising costs
► Selling costs

In cost Accounting, normal loss is/are charged to:
► Factory overhead control account
► Work in process account
► Income Statement
► All of the given options


Production budget is an example of which of the following budget?
► Functional budget
► Master budget
► Cost of goods sold budget
► Sales budget


In a make or buy situation with no limiting factors, which of the following would be the relevant costs for the decision?

► Opportunity costs
► Differential costs between the two options
► Sunk costs
► Implied costs


Income approach is used for the costing of which of the following?
► Joint products
► By-products
► Both Joint products and By-products
► None of the given options



Which of the following is an element of cost?
► Direct Labour Cost
► Cost of goods sold
► Cost of goods manufactured
► Mark up


If, units of goods to be sold are 800, closing finished goods units are 200 and opening finished goods units are 100. What is the required production?

► 900 units
► 1,000 units
► 700 units
► 600 units


Profit under absorption costing will be higher than under marginal costing if:

► Produced units > Units sold
► Produced units < Units sold
► Produced units =Units sold
► Profit cannot be determined with given statement

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An average cost is also known as:
► Variable cost
► Unit cost
► Total cost
► Fixed cost


Production budget is an example of which of the following budget?

► Functional budget
► Master budget
► Cost of goods sold budget
► Sales budget


Which of the following cost (‗s) will be considered as controllable cost (‗s)? ► Direct material
► Direct labor
► Variable overhead
► All of the given options



Short Question


5 marks 

Mention only financial and Administrative expenses

Salaries of Employ ?
Interest paid on debt ?
Utility Bills ?
Depreciation of office Equipments ?
Interest paid on depenture ?





Q 2
5 marks

What is a breakeven chart? What is its use?




Q3
5 marks

Study hs been conducted to determine if an department of sparrow company should be discontinued the contribution margin in the department is 150,000 per year. Fixed expenses charged to the department 130,000 per year. It is estimated that Rs. 120,000 of these expenses could be eliminated of the department it discontinue.

1-if the department discontinue what will be the effect on the company overall net operating income?

2-which cost are irrelevant to this decision?