Management Accounting - 5

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Multiple Choice Multiple Answer
Question
The selection of the supplier may depend upon the following aspects:
Correct Answer
Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier
Your Answer
Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier

Multiple Choice Single Answer
Question
Net book value of loose tools as on 1st April, 2003 was Rs.45,000/-. As on 31st March, 2004 the management felt that the real worth of these loose tools is only Rs.30,000/-. What can be done to achieve the desired reduction in the net book value of loose tools?
Correct Answer
By providing depreciation to the extent of Rs.15,000/-
Your Answer
By providing depreciation to the extent of Rs.15,000/-

True/False
Question
Overhead absorption rate will be different at different capacity levels.
Correct Answer
True
Your Answer
True

Select The Blank
Question
The budget that represents the funds investment for expansion, diversification, etc. is known as ________.
Correct Answer
Capital expenditure budget
Your Answer
Capital expenditure budget

Select The Blank
Question
The ________ variance is the difference between the actual variable overhead incurred and the standard variable overhead charged to production.
Correct Answer
Total variable overhead
Your Answer
Total variable overhead

Multiple Choice Single Answer
Question
The cost that indicates historical cost, which is incurred in past, is known as
Correct Answer
Sunk cost
Your Answer
Sunk cost

Select The Blank
Question
Information as to the cost and profit / loss associated with the firm's operations is provided to the ________ by Management accounting.
Correct Answer
Management
Your Answer
Management

Select The Blank
Question
Factory cost of a product is Rs.335,000/-, if the selling overheads are charged @25% of factory cost, then the amount of selling overheads should be Rs.________/-
Correct Answer
83750
Your Answer
83750

Select The Blank
Question
Uniform costing is not a separate method of ________.
Correct Answer
cost accounting
Your Answer
cost accounting

Multiple Choice Multiple Answer
Question
Which of the following budgets may be termed as a long term budget?
Correct Answer
Capital expenditure budget , Research and Development expenditure budget , Budget of a transportation company
Your Answer
Capital expenditure budget , Research and Development expenditure budget

Multiple Choice Single Answer
Question
The following figures relate to a company manufacturing a varied range of products : Year 2003 Total sales Rs.22,23,000/- and total cost Rs.19,83,600/-. Year 2004 : Total sales Rs.24,51,000/- and Total cost Rs.21,43,200/-. Assuming stability in prices, calculate the profit volume ratio
Correct Answer
0.3
Your Answer
0.3

Multiple Choice Single Answer
Question
The cost of idle time incurred by employees that is considered normal for the production process should be charged to :
Correct Answer
Factory overheads
Your Answer
Direct labour

Select The Blank
Question
Creche expenses may be appropriately approtioned on the basis of ________.
Correct Answer
Number of female workers
Your Answer
Number of female workers

Multiple Choice Single Answer
Question
Opening stock of Rs.1,80,000/-, purchases Rs.8,00,000/-, freight inward Rs.35,000/-, closing stock Rs.2,00,000/-, direct wages Rs.2,35,000/-. Calculate the prime cost.
Correct Answer
Rs.10,50,000/-
Your Answer
Rs.10,70,000/-

Multiple Choice Multiple Answer
Question
Limitations of Management Accounting includes-------------------
Correct Answer
Its wide scope , Possibility of intuitive decision , Requires elaborate organizational structure
Your Answer
Its wide scope , Possibility of intuitive decision , Requires elaborate organizational structure

Select The Blank
Question
Indirect Cost is termed as ________.
Correct Answer
Overhead
Your Answer
Overhead

Multiple Choice Multiple Answer
Question
Features of Financial Accounting includes-----------------
Correct Answer
It is a legal requirement , It protects the interest of outsiders , It considers historical transactions
Your Answer
It is a legal requirement , It protects the interest of outsiders , It considers historical transactions

Multiple Choice Multiple Answer
Question
Identify the budgets for which the production manager sould be held responsible :
Correct Answer
Production budget , Production overheads budget , Plant utilisation budget
Your Answer
Production budget , Production overheads budget , Plant utilisation budget

Multiple Choice Single Answer
Question
A group of 10 men and 20 women workers were expected to produce 400 units of a product in an 8 hour day. The standard hourly rate was fixed at Rs.25/- and Rs.15/-, respectively.Actually, a group of 15 men and 10 women workers was deployed and paid for 8 hours a day at an hourly rate of Rs.22/- and Rs.18/-, respectively. Two hours were wasted for the entire group due to power failure and only 300 units were produced. Calculate labour rate variance.
Correct Answer
Rs.120/- (Favourable)
Your Answer
Rs.150/- (Favourable)

Multiple Choice Multiple Answer
Question
Techniques of management accounting include:
Correct Answer
Marginal costing , Budgetary control , Standard costing
Your Answer
Cost control , Budgetary control , Standard costing

True/False
Question
A grinding machine is an example of impersonal cost centre
Correct Answer
True
Your Answer
True

True/False
Question
Profitability statement indicates the amount of assets & liabilities.
Correct Answer
False
Your Answer
False

Multiple Choice Single Answer
Question
Uniform costing system is useful in the following areas
Correct Answer
Classification of cost accounts
Your Answer
Preparing financial statements

Multiple Choice Multiple Answer
Question
The features of multiplicity of key factors are as follows :
Correct Answer
More than one key factors , Refers to a complex situation , Can be resolved by using linear programming technique
Your Answer
More than one key factors , Refers to a complex situation , Can be resolved by using linear programming technique

True/False
Question
Balance sheet indicates the expenditure & income from the business.
Correct Answer
False
Your Answer
False

True/False
Question
Interim dividend paid by the company should be debited to the profit and loss appropriation account.
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer
Question
A materials requisition form normally contains the following aspects:
Correct Answer
Quantity requisitioned , Per unit material cost , Job number
Your Answer
Quantity requisitioned , Job number

Multiple Choice Multiple Answer
Question
The production budget may be prepared in terms of :
Correct Answer
Units produced , Production cost , Material cost, labour cost and overheads
Your Answer
Units produced , Production cost , Material cost, labour cost and overheads

Multiple Choice Single Answer
Question
Panna Ltd. temporarily has excess production capacity. The idle plant facilties can be used to manufacture a low-margin item. The low-margin item should be produced if it can be sold for more than its:
Correct Answer
Variable costs
Your Answer
Variable costs

Multiple Choice Multiple Answer
Question
If the sales forecast is less than the past sales but the top management insists upon a certain amount of additional profits, then following steps can be taken to achieve the target profit
Correct Answer
Increase the selling price , Reduce cost of sales , Increase the selling efforts
Your Answer
Increase the selling price , Increase the sales volume , Reduce cost of sales

True/False
Question
Receipts and payments method of cash budget is useful for preparing long term estimates.
Correct Answer
False
Your Answer
False

Multiple Choice Multiple Answer
Question
Select the advantages of standard cost system.
Correct Answer
Provides reliable basis for budgeting , Facilitates delegation of authority , Promotes economy and efficiency
Your Answer
Provides reliable basis for budgeting , Facilitates delegation of authority

True/False
Question
The sales mix variance highlights the fact that the actual mix of sales has been in the same ratio as budgeted.
Correct Answer
False
Your Answer
False

Select The Blank
Question
In case of seasonal industry, the budget period may be taken as ________.
Correct Answer
One season
Your Answer
One season

True/False
Question
Lack of efficient control on various aspects related to raw-material increases the material cost component of the finished product.
Correct Answer
True
Your Answer
True

True/False
Question
Due to compensating errors the arithmetical accuracy of the trial balance is affected.
Correct Answer
False
Your Answer
False

Multiple Choice Single Answer
Question
Material price variance for a job is Rs.800/- (Favourable). Actual quantity of material used is 100 kg whereasthe standard quantity of material is 120% of actual quantity. Actual price paid for the material is 80% of the standard price. Calculate material cost variance.
Correct Answer
Rs.1,600/- (Favourable)
Your Answer
Rs.800/- (Favourable)

Select The Blank
Question
The process of recording the business transactions in a defined set of records is referred to as ________.
Correct Answer
Balance sheet
Your Answer
Profit and Loss Account

Match The Following
Question
Correct Answer
Your Answer
Daily Time sheets
Time spent by worker on job is recorded
Time spent by worker on job is recorded
Time Keeping Department
Recording of workers time
Recording of workers time
Time booking department
Jobwise booking of time.
Jobwise booking of time.
Time Recording Clock Method
Ticket number & clock card allotted to worker
Ticket number & clock card allotted to worker

True/False
Question
Purchased goods by paying Rs.35,000/-: In this case, the cash account should be debited.
Correct Answer
True
Your Answer
True

Select The Blank
Question
If the customer is not likely to pay the amount receivable from him, this amount should to be treated as ________.
Correct Answer
Bad debts
Your Answer
Bad debts

True/False
Question
Accounting is an art of recording, classifying & summarizing in a significant manner.
Correct Answer
True
Your Answer
True

Match The Following
Question
Correct Answer
Your Answer
Book-Keeping
Books of Accounts
Books of Accounts
Financial statement
Profitability statement & Balance-sheet
Profitability statement & Balance-sheet
Accounting
Process of analyzing & interpretation
Process of analyzing & interpretation
Profitability statement
Indicates the amount of profit earned
Indicates the amount of profit earned
Balance-sheet
Financial status
Financial status

True/False
Question
The problem of multiple key factors can be solved with the help of techniques like linear programming, operations research, etc.
Correct Answer
True
Your Answer
True

Select The Blank
Question
The ________ books are preferred when the volume of transactions is very large.
Correct Answer
Subsidiary
Your Answer
Journal

Multiple Choice Multiple Answer
Question
If you are required to enforce uniform costing system in your industry, how would you proceed ?
Correct Answer
Collecting data from all units of your industry , Ensuring that the data collected is complete and correct , Maintaining secrecy of the data collected
Your Answer
Collecting data from all units of your industry , Ensuring that the data collected is complete and correct , Allowing free access to all the units to the collected data

True/False
Question
All costs are controllable.
Correct Answer
False
Your Answer
False