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Thread: MGT402 Current Quizzes Material (100 Mcq's)

  1. #1

    MGT402 Current Quizzes Material (100 Mcq's)

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    Question # 1
    Which of the following is correct?
    Select correct option:
    Units sold=Opening finished goods units + Units produced – Closing finished goods units
    Units Sold = Units produced + Closing finished goods units - Opening finished goods units
    Units sold = Sales + Average units of finished goods inventory
    Units sold = Sales - Average units of finished goods inventory

    Question # 2
    PVC Company has ordering quantity 10,000 units. They have storage capacity 20,000 units, The average inventory would be:
    Select correct option:
    20,000
    5,000
    10,000
    25,000

    Question # 3
    ________ is the time worked over and above the employee's basic working week.
    Select correct option:
    Flex time
    Overtime
    Shift allowance
    Commission

    Question # 4
    Cost of Goods Manufactured can be calculated as follow
    Select correct option:
    Total factory Cost Add Opening Work in process inventory Less Closing Work in process inventory
    Total factory Cost Less Opening Work in process inventory Add Closing Work in process inventory
    Total factory Cost Less Opening Work in process inventory Less Closing Work in process inventory
    Total factory Cost Add Opening Work in process inventory Add Closing Work in process inventory

    Question # 5
    Which of the following statement is correct regarding reasons of variance?
    Select correct option:

    Difference between capacity level over which overhead absorption rate is calculated & capacity level attained.
    Difference between FOH cost budgeted or estimated over which overhead absorption rate and FOH actually incurred.
    Difference between the actual level which company achieved and budget level which company determined.
    All of the given



    Question # 6
    The component of Factory overhead are as follow
    Select correct option:
    Direct material + Indirect material + Direct expenses
    Indirect material + Indirect labor + Others indirect cost
    Direct material + Indirect expenses + Indirect labor
    Direct labor + Indirect labor + Indirect expenses

    Question # 7
    In which of the following would there be a difference between financial and managerial accounting?

    Select correct option:
    Users of the information
    Purpose of the information
    Flexibility of practices
    All of the given options

    Question # 8
    Over applied FOH will always result when a predetermined FOH rate is applied and:
    Select correct option:
    Production is greater than defined capacity
    Actual overhead costs are less than budgeted overhead
    Budgeted capacity is less than normal capacity
    Actual overhead incurred is less than applied Overhead

    Question # 9
    All of the following are cases of labor turnover EXCEPT:
    Select correct option:
    Workers appointed against the vacancy caused due to discharge or quitting of the organization
    Workers employed under the expansion schemes of the company
    The total change in the composition of labor force
    Workers retrenched

    Question # 10
    Under LIFO method the value of issues is close to:
    Select correct option:
    Second hand price
    Current market price
    Historical cost
    All of given options

    Question # 11
    Differential cost has the behavior of ?
    Select correct option:
    Fixed cost
    Step cost
    Variable/semi variable cost
    All of the given options

    Question # 12
    In furniture manufacturing use of nail, pins, glue, and polish which use to increase its esteem value that cost is treated as:
    Select correct option:
    Direct material cost
    Indirect material cost
    FOH cost
    Prime cost

    Question # 13
    A store ledger card is similar to the ______ .
    Select correct option:
    Stock ledger
    Bin card
    Material card
    Purchase requisition card

    Question # 14

    FOH absorption rate is calculated by the way of
    Select correct option:
    Estimated FOH Cost/Direct labor hours
    Estimated FOH Cost/No of units produced
    Estimated FOH Cost/Prime Cost
    All of the given options
    Explanation:
    ABSORPTION COSTING: Before diving into the specifics of variable costing, let's revisit the basic tenants of the traditional approach known as absorption costing (also known as "full costing"). Generally accepted accounting principles require absorption costing for external reporting, and it formed the basis for the discussion of inventory costing found in preceding chapters. Under absorption costing, normal manufacturing costs are considered product costs and included in inventory. As sales occur, the cost of inventory is transferred to cost of goods sold; meaning that the gross profit is reduced by all costs of manufacturing, whether those costs relate to direct materials, direct labor, variable manufacturing overhead, or fixed manufacturing overhead. Selling, general, and administrative costs (SG&A) are classified as period expenses.


    Question # 15
    Which of the following is / are element / s of production payroll?
    Select correct option:
    Direct labor force wages
    Administrative wages
    Selling wages
    All of the given options
    Labor costs constitute an important part of production cost. Labor cost is and element of total payroll expense of an entity. Payroll expense consists of
    • Labor cost
    • Administrative staff expenses
    • Selling and distribution staff expenses
    Question # 16
    Which of the following costs is part of the prime cost for manufacturing company?
    Select correct option:
    Cost of transporting raw materials from the suppliers premises
    Wages of factory workers engaged in machine maintenance
    Depreciation of truck used for deliveries to customers
    Cost of indirect production materials

    Question # 17
    All Indirect cost is charged/record in the head of
    Select correct option:
    Prime cost
    FOH cost
    Direct labor cost
    None of the given options

    Question # 18
    Direct material opening inventory add net purchases is called
    Select correct option:
    Material consumed
    Material available for use
    Total material purchased
    Material ending inventory


    Question # 19
    The journal entry of purchase of stock under periodic inventory system would be?
    Select correct option:
    Inventory to Cash
    Cash to Purchases
    Purchases to Inventory
    None of the given options

    http://business-accounting-guides.com/p ... inventory/
    Question # 20
    Which of the following statement measures the financial position of the entity on particular time?
    Select correct option:
    Income Statement
    Balance Sheet
    Cash Flow Statement
    Statement of Retained Earning

    Question # 21
    The Process of cost apportionment is carried out so that:
    Select correct option:
    Cost may be controlled
    Cost unit gather overheads as they pass through cost centers
    Whole items of cost can be charged to cost centers
    Common costs are shared among cost centers

    Question # 22
    Net sales = Sales less:
    Select correct option:

    Sales returns
    Sales discounts
    Sales returns & allowances
    Sales returns & allowances and sales discounts
    Ref: http://www.cliffsnotes.com/study_guide/ ... 21036.html

    Question # 23
    Where the applied FOH cost is greater than the actual FOH cost it is:
    Select correct option:

    Unfavorable variance
    Favorable variance
    Normal variance
    Budgeted variance


    Question # 24
    Merrick Differential system uses --------- rates.
    Select correct option:

    Two
    Three
    Four
    Five

    Question # 25
    FOH applied rate of Rs. 5.60 per machine hour. During the year the FOH to Rs.275,000 and 48,000 machine hours were used. Which one of following statement is correct?
    Select correct option:

    Overhead was under-applied by Rs.6,200
    Overhead was over-applied by Rs.6,200
    Overhead was under-applied by Rs.7,200
    Overhead was over-applied by Rs.7,200
    Explanation:
    FOH = 275000
    48000*5.60 = 268800
    275000 - 268800 = 6200
    as the predetermined FOH is greater than actual so it will be Over-applied


    Question # 26
    Under/Over applied FOH cost can be adjusted in which of the following:
    Select correct option:

    Entire Production
    Cost of Good sold
    Net Profit
    All of given options

    Question # 27
    A cost centre is
    Select correct option:

    A unit of product or service in relation to which costs are ascertained
    An amount of expenditure attributable to an activity
    A production or service location, function, activity or item of equipment for which costs are accumulated
    A centre for which an individual budget is drawn up

    Question # 28
    All of the following are essential requirements of a good wage system EXCEPT:
    Select correct option:

    Reduced overhead costs
    Reduced per unit variable cost
    increased production
    Increased operating costs

    Question # 29
    Increase in material Inventory means:
    Select correct option:

    The ending inventory is greater than opening inventory
    The ending inventory is less than opening inventory
    Both ending and opening inventories are equal
    Can not be determined


    Question # 30
    Which of the following is sales force payroll incentive?
    Select correct option:

    Commission
    Shift allowance
    Over time payment
    Bonus

    Question # 31
    A worker is paid Rs. 0.50 per unit and he produces 18 units in 7 hours. Keeping in view the piece rate system, the total wages of the worker would be:
    Select correct option:

    18 x 7 x 0.50 = Rs. 63
    18 x 0.50 = Rs. 9 (piece rate= unit * rate)
    18 x 7 = Rs. 126
    7 x 0.5 = Rs. 3.5

    Question # 32
    If a predetermined FOH rate is not applied and the volume of production is reduced from the planned capacity level, the cost per unit expected to:
    Select correct option:

    Remain unchanged for fixed cost and increase for variable cost
    Increase for fixed cost and remain unchanged for variable cost
    Increase for fixed cost and decrease for variable cost
    Decrease for both fixed and variable costs

    Question # 33
    Which of the following cost is used in the calculation of cost per unit?
    Select correct option:

    Total production cost
    Cost of goods available for sales
    Cost of goods manufactured
    Cost of goods Sold
    http://www.ehow.com/how_5100715_calcula ... -unit.html


    Question # 34
    Net Income before Interest and tax is also called:
    Select correct option:

    Operating Income/Profit
    Gross Profit
    Marginal Income
    Other Income

    Question # 35
    Which of the following is an example of Statutory deductions:
    Select correct option:
    Deduction as Income Tax
    Deduction as social security
    Subscriptions to a trade union
    None of the given

    Question # 36
    Direct material opening inventory add net purchases is called
    Select correct option:
    Material consumed
    Material available for use
    Total material purchsed
    Material ending inventory

    Question # 37
    Inventory turnover ratio can be calculated as follow?
    Select correct option:
    Cost of goods sold/Average inventory
    Gross profit/Average inventory
    Cost of goods sold/sale
    Cost of goods sold/Gross profit


    Question # 38
    Cost accounting concepts include all of the following EXCEPT:
    Select correct option:
    Planning
    Controlling
    Sharing
    Costing

    Question # 39
    Overtime that is necessary in order to fulfill customer orders is called:
    Select correct option:
    Avoidable overtime
    Unavoidable overtime
    Premium Overtime
    Flex time

    Question # 40
    If opening inventory of material is Rs.20,000 and closing inventory is Rs. 40,000.the Average inventory amount will be:
    Select correct option:
    Rs. 40,000
    Rs. 30,000
    Rs. 20,000
    Rs. 10,000

    Question # 41
    In which of the following center FOH cost NOT incurred
    Select correct option:
    Production Center
    Service Center
    General Cost Center
    Head Office

    Question # 42
    If labor is satisfied with high wages it may ultimately lead to:
    Select correct option:
    Increased production and productivity
    Increased efficiency
    Reduced labor and overhead costs
    All of the given options


    Question # 43
    Byer produced 20,000 units and their total factory cost was Rs. 450,000,other cost like property tax on factory bulding was Rs. 10,000 included in that cost till year ended the cost of per unit would be:
    Select correct option:
    Rs.22.5
    Rs.23.5
    Rs.24.5
    Rs.26.5

    Question # 44
    Which of the following best describes the manufacturing costs?
    Select correct option:
    Direct materials, direct labor and factory overhead
    Direct materials and direct labor
    Direct materials, direct labor, factory overhead, and administrative overhead
    Direct labor and factory overhead

    Question # 45
    The Term Minimum Level Represents.
    Select correct option:
    This represents the quantity below which the stock of any item should not be allowed to fall
    This represents the quantity below which the stock of any item should be allowed to fall
    This is the estimated time period in number of days or in weeks or in months.
    This is the Lead time period in number of days or in weeks or in months.

    Question # 46
    Which of the following is to be called product cost
    Select correct option:

    Material cost
    Labor cost
    FOH cost
    All of the given options

    Question # 47
    The components of the prime cost are:
    Select correct option:

    Direct Material + Direct Labor + Other Direct Cost
    Direct Labor + Other Direct Cost + FOH
    Direct Labor + FOH
    None of the given options

    Question # 48
    Store in charge after receiving the material as per the goods received note, places the material at its location and makes an entry in_______ .
    Select correct option:

    Sponsored Links


    Bin Card page 64
    Store Ledger Card
    Stock Ledger
    None of the given options

    Question # 49
    Working hours of labor can be calculated with the help of all except:
    Select correct option:

    Smart card
    Time sheet
    Clock card
    Store card page 70

    Question # 50
    A cost unit is
    Select correct option:

    The cost per hour of operating a machine
    The cost per unit of electricity consumed
    A unit of product or services in relation to which costs are ascertained
    A measure of work output in a standard hour

    Question # 51
    A Blanket Rate is:
    Select correct option:

    A single rate which used throughout the organization departments
    A double rates which used throughout the organization departments
    A single rates which used in different departments of the organization
    None of the given options

    Question # 52
    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?
    Select correct option:

    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 # 53
    A company has calculated that volume variance for a given month was unfavorable. This could have been caused by which of the following factors?
    Select correct option:

    The number of rejected units was higher than normal
    Machine breakdowns were higher than normal
    Delays were experienced in the issuing of material to production
    All of the given options

    Question # 54
    A method by which the good used are priced out at average cost is known as:
    Select correct option:

    BCVO
    AVCO
    c.FIFO
    LIFO

    Question # 55
    Under Periodic Inventory system Purchase of inventory is treared as:
    Select correct option:

    Assets
    Expense
    Income
    Liability

    Question # 56
    In order to ensure efficient functioning of the stores department and steady flow of materials to the production departments, the restocking of stores is duty of:
    Select correct option:

    Managers
    Storekeeper page 50
    Production In charge
    Sales supervisor

    Question # 57
    If, COGS = Rs. 50,000 GP Margin = 25% of sales What will be the value of Sales?
    Select correct option:

    Rs. 200,000
    Rs. 66,667
    Rs. 62,500
    None of the given options

    Sales = Gross profit * 100%/ 25%
    Gross profit = COGS * 25% /75% = 16667
    Sales = 16667*100%/ 25%= 66668


    Question # 58
    If, COGS = Rs. 70,000 GP Margin = 30% of sales What will be the value of Sales?
    Select correct option:
    Rs. 200,000
    Rs. 66,667
    Rs. 100,000
    Rs. 62,500

    Gross profit = 30000
    Sales =30000 *100%/ 30%= Rs. 100,000
    Page 33 and 34

    Question # 59
    If, Gross profit = Rs. 40,000 GP Margin = 25% of sales What will be the value of cost of goods sold?
    Select correct option:
    Rs. 160,000
    Rs. 120,000
    Rs. 40,000
    Can not be determined
    COGS = Gross profit * 75%/ 25%= Rs. 120,000

    Question # 60
    The abbreviation LIFO is:
    Select correct option:
    Large integrated financial organization
    Least interesting financial option
    The last in first out method
    None of the given options

    Question # 61
    Which of the following is/are not associated with ordering costs?
    Select correct option:
    Interest
    Insurance
    Opportunity costs
    All of the given options

    Question # 62
    The supervisor salary is treated as:
    Select correct option:
    Direct labor cost
    Indirect labor cost
    Conversion cost
    None of the given options

    Question # 63
    Cost of finished goods inventory is calculated by:
    Select correct option:
    Multiplying units of finished goods inventory with the cost per unit
    Dividing units of finished goods inventory with the cost per unit
    Dividing per unit cost with finished goods inventory
    Deducting total cost from finished goods inventory

    Question # 64
    The main purpose of cost accounting is to
    Select correct option:
    Maximize profits
    Help in inventory valuation
    Provide information to management for decision making
    Aid in the fixation of selling price


    Question # 65
    The flux method of labor turnover denotes:
    Select correct option:

    Workers appointed against the vacancy caused due to discharge or quitting of the organization
    Workers appointed in replacement of existing employees
    Workers employed under the expansion schemes of the company
    The total change in the composition of labor force


    Question # 66
    While calculating the EOQ, number of orders is calculated by:
    Select correct option:

    Multiplying the required units with cost per order
    Dividing required unit by ordered quantity
    Multiplying the required units with ordered quantity
    Multiplying the ordered quantity with cost per order

    Question # 67
    Which of the following statement is TRUE about FOH applied rates?
    Select correct option:

    They are used to control overhead costs
    They are based on actual data for each period
    They are predetermined in advance for each period
    None of the given

    Question # 68
    EOQ is a point where:
    Select correct option:

    Ordering cost is equal to carrying cost
    Ordering cost is higher than carrying cost
    Ordering cost is lesser than the carrying cost
    Total cost is maximum

    Question # 69
    Opportunity cost is the best example of:
    Select correct option:

    Sunk Cost
    Standard Cost
    Relevant Cost
    Irrelevant Cost

    Question # 70
    From employer point of view, the total cost of wages and salaries is a combination of which of the following?
    Select correct option:

    Gross wages and salaries+employer's provident fund contributions
    Gross wages and salaries+employee's provident fund contributions
    Gross wages and salaries + Income Tax deductions
    Gross wages and salaries + pension scheme payments

    Question # 71
    Generally, the danger level of stock is fixed ______ the minimum level.
    Select correct option:
    Below
    Above
    Equal
    Danger level has no relation to minimum level

    Question # 72
    A standard rate is paid to the employee when he completed his job:
    Select correct option:
    In time less than the standard
    In standard time
    In time more than standard
    Both in standard time and more than the standard time

    Question # 73
    If, Sales = Rs. 600,000 Markup = 20% of cost What would be the value of Gross profit?
    Select correct option:
    Rs. 200,000
    Rs. 100,000
    Rs. 580,000
    Rs. 740,000

    Question # 74
    Period costs are
    Select correct option:
    Expensed when the product is sold
    Included in the cost of goods sold
    Related to specific Period
    Not expensed

    Question # 75
    The Inventory Turn over ration is 5 times and numbers of days in a year is 365.Inventory holding period in days would be
    Select correct option:
    100 days
    73 days
    50 days
    10 days

    Question # 76
    If labor is satisfied with high wages it may ultimately lead to:
    Select correct option:
    Increased production and productivity
    Increased efficiency
    Reduced labor and overhead costs
    All of the given options


    Question # 77
    Gross pay includes which of the following items?
    Select correct option:
    Basic pay + bonus pay
    Overtime payment + shift allowances
    Rent and conveyance allowances
    All of the given options

    Question # 78
    The Economic order quantity can be calculated by:
    Select correct option:
    Formula Method
    Table Method
    Graph Method
    All of the given

    Question # 79
    Merrick Differential Piece Rate System:
    Select correct option:
    worker is not penalized even if his performance does not exceed 80 per cent of the High Task.
    worker is not penalized even if his performance does not exceed 70 per cent of the High Task.
    worker is not penalized even if his performance does not exceed 50 per cent of the High Task.
    worker is not penalized even if his performance does not exceed 30 per cent of the High Task.


    Question # 80
    Production volume of 1,200 units cost incurred Rs. 10,000 and production volume of 1,400 units cost incurred Rs.20, 000. The variable cost per unit would be?
    Select correct option:
    Rs. 50.00 per unit
    Rs. 8.33 per unit
    Rs. 14.20 per unit
    Rs. 100 per unit

    Question # 81
    Cost of goods sold can be calculated as follow
    Select correct option:

    Cost of goods manufactured Add Opening finished goods inventory Less Closing finished goods inventory
    Cost of goods manufactured Less Opening finished goods inventory Less Closing finished goods inventory
    Cost of goods manufactured Less Opening finished goods inventory Add Closing finished goods inventory
    Cost of goods manufactured Add Opening finished goods inventory Add Closing finished goods inventory


    Question # 82
    Sales are Rs. 450,000. Beginning finished goods were Rs. 23,000. Ending finished goods are Rs. 30,000. The cost of goods sold is Rs. 300,000. What is the cost of goods manufactured?
    Select correct option:

    Rs. 323,000
    Rs. 330,000
    Rs. 293,000
    None of the given options

    Question # 83
    By useing table method where-------------- is equal,that point is called Economic order quanity.
    Select correct option:

    Ordering cost
    Carrying cost
    Ordering and carrying cost
    Per unit order cost

    Question # 84
    Which of the following is called Non Statutory deductions:
    Select correct option:

    Subscriptions to a trade union
    Contributions by the employee to a pension scheme
    Contributions by the employer to a pension scheme
    All of the given

    Question # 85
    Which of the following is a point of differentiation between blanket rates and department rates?
    Select correct option:

    Blanket rate is a single overhead rate established for the entire factory
    Department rates are separate overhead rates for all departments of factory through which the products pass
    Department rate is a single overhead rate established for the entire factory
    Blanket rates are separate overhead rates for all departments of factory through which the product passes

    Question # 86
    Which of the following is true when piece rate system is used for wage determination?
    Select correct option:

    worker is paid on the basis of time taken by him to perform the work
    worker is paid on the basis of production page84
    Piece rate system is more beneficial than a guaranteed minimum wage system
    None of the given options

    Question # 87
    Where the applied FOH cost is less than the actual FOH cost it is:
    Select correct option:

    Unfavorable variance
    Favorable variance
    Normal variance
    Budgeted variance

    Question # 88
    Factory Over head cost includes
    Select correct option:

    Factory Rent
    Property Tax
    Salaries of Factory Clerk
    All of the given

    Question # 89
    _____ are future costs that effect the current management decision.
    Select correct option:

    Sunk Cost
    Standard Cost
    Relevant Cost
    Irrelevant Cost


    Question # 90
    Which of the following is considered as basic systems of remunerating labor?
    Select correct option:

    Time rate system
    Piece rate system
    Halsey Premium plan
    Both time rate and piece rate system

    Question # 91
    While deducting Income Tax from the gross pay of the employee, the employer acts as a (an) _________________for Income Tax Department.
    Select correct option:

    Agent of his own Company
    Paid tax collection agent
    Unpaid tax collection agent
    None of the given options

    Question # 92
    When FOH is under applied and charged to Net profit , the treatment would be:
    Select correct option:

    Under applied Add net profit
    Under applied Less net profit
    Under applied Less operating expense
    None of the given options

    Question # 93
    According to IASB framework, Financial statements exhibit to its users the:
    Select correct option:

    Financial position
    Financial performance
    Cash inflow and outflow analysis
    All of the given options


    Question # 94
    A spending variance for factory overhead is the difference between actual factory overhead cost and factory overhead cost that should have been incurred for actual hours worked and results from:
    Select correct option:



    Price difference of FOH costs

    Quantity differences of FOH costs

    Price and quantity differences for FOH costs

    Difference caused by production volume variations


    Question # 95
    EOQ is the order quantity that _________ over our planning horizon
    Select correct option:



    Minimizes total ordering costs

    Minimizes total carrying costs

    Minimizes total inventory costs

    Minimize the required safety stock




    Question # 96 1
    In a repeated distribution method:
    Select correct option:



    Each service department in turn does not re-allocate its costs to all departments

    Each service department in turn and re-allocates its costs to all departments

    Each service department in turn and allocates its costs to all departments

    Only one service department in turn and re-allocates its costs to all departments





    Question # 97
    Loss by fire is an example of:
    Select correct option:



    Normal Loss

    Abnormal Loss

    Incremental Loss

    Can not be determined

    Question # 98
    Which of the following is not true
    Select correct option:



    Managerial accounting information is prepared for internal users

    Preparation of Managerial accounting information is not a legal requirement

    There are specific standards of acceptability for managerial accounting

    The structure of managerial accounting practice is relatively flexible

    Question # 99
    Manufacturing entities classified the inventory in which of three kinds?
    Select correct option:



    Material inventory,WIP inventory,Finished goods inventory

    Material inventory,purchased good inventory,WIP inventory

    Material inventory,purchased good inventory,Finished goods inventory

    WIP inventory,Finished goods inventory,purchased good inventory

    Question # 100
    Which of the following is correct for maximum level?
    Select correct option:



    Reorder level – (Minimum consumption x Lead time) + EOQ

    (Maximum consumption x Lead time) – (Minimum consumption x Lead time) + EOQ

    [(Maximum consumption - Minimum consumption) Lead time]+ EOQ

    All of the given options

  2. #2
    thnks 4 sharing.....

  3. #3
    Senior Member viki's Avatar
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    really sweet and fruit full sharing
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