Chapters
| 1. |
An example of a production overhead would be: |
| A. | Material. |
| B. | Rent |
| C. | Labour cost. |
| D. | Supervisory cost |
| Answer» D. Supervisory cost | |
| 2. |
All such expenses which are incurred for creating and enhancing the demands for the products are |
| A. | Selling expenses |
| B. | Administrative expenses |
| C. | Distribution expenses |
| D. | All of the above |
| Answer» D. All of the above | |
| 3. |
To control costs it is essential to keep control on |
| A. | Prime cost |
| B. | Overheads |
| C. | Indirect materials and tools cost. |
| D. | All of the above |
| Answer» B. Overheads | |
| 4. |
A cost that is easily traceable to a cost object is known as: |
| A. | Direct cost |
| B. | Indirect cost |
| C. | Variable cost |
| D. | Fixed cost |
| Answer» A. Direct cost | |
| 5. |
Which of the following best describes a fixed cost? A cost which: |
| A. | Represents a fixed proportion of total costs |
| B. | Remains at the same level up to a particular level of output |
| C. | Has a direct relationship with output. |
| D. | Remains at the same level when output increases. |
| Answer» A. Represents a fixed proportion of total costs | |
| 6. |
Which of the following is a valid classification of the salary paid to the foreman in charge of the packing department? |
| A. | Indirect departmental cost |
| B. | Direct product cost |
| C. | Direct departmental cost |
| D. | Service department cost. |
| Answer» D. Service department cost. | |
| 7. |
A cost that changes in total dollar amount with the change in the level of activity is known as: |
| A. | Direct cost |
| B. | Indirect cost |
| C. | Variable cost |
| D. | Fixed cost |
| Answer» C. Variable cost | |
| 8. |
Which of the following costs is treated as indirect labour? |
| A. | Idle time |
| B. | Overtime premium |
| C. | Fringe benefits |
| D. | All of the above |
| Answer» D. All of the above | |
| 9. |
Which definition best describes indirect costs? |
| A. | Indirect costs are those costs which are not controlled directly by a manager. |
| B. | Indirect costs are those costs which cannot be directly associated with a product or service. |
| C. | Indirect costs are always fix |
| Answer» B. Indirect costs are those costs which cannot be directly associated with a product or service. | |
| 10. |
What would be the most appropriate way of apportioning depreciation costs across different manufacturing departments in a business? |
| A. | Floor space |
| B. | Numbers of personnel |
| C. | Value of buildings and equipment |
| D. | Administration costs |
| Answer» C. Value of buildings and equipment | |
| 11. |
Which of the following cost is also known as overhead cost or on cost: |
| A. | Cost of direct labour |
| B. | Cost of direct material |
| C. | Direct expenses |
| D. | Indirect expenses |
| Answer» D. Indirect expenses | |
| 12. |
Which of the following calculate the actual cost of product: |
| A. | Cost estimation |
| B. | Costing |
| C. | Both a and b |
| D. | None of these |
| Answer» D. None of these | |
| 13. |
Costing is specialized branch of accounting which deals with: |
| A. | Classification, recording, allocation, and control of asset |
| B. | Classification, processing, allocation and directing |
| C. | Classification, recording, planning and control of asset |
| D. | Classification, recording, allocation and directing |
| Answer» D. Classification, recording, allocation and directing | |
| 14. |
In cinema halls, composite cost unit is ________________: |
| A. | A seat per show |
| B. | Cost of screening |
| C. | Salary of staff |
| D. | Rent of cinema hall |
| Answer» A. A seat per show | |
| 15. |
The stage of production at which separate products are identified is known as _______________: |
| A. | Process costing |
| B. | Reverse cost method |
| C. | Subsequent cost |
| D. | Equivalent production |
| Answer» A. Process costing | |
| 16. |
What item is not included in cost accounting? |
| A. | Product costing |
| B. | Profit-sharing |
| C. | Planning |
| D. | Controlling |
| Answer» B. Profit-sharing | |
| 17. |
A total of all the direct costs is known as |
| A. | Cost of production |
| B. | Cost of sales |
| C. | Prime cost |
| D. | Works cost |
| Answer» C. Prime cost | |
| 18. |
Which of the following is not included in functional classification of overheads? |
| A. | Repairs and maintenance |
| B. | Lubricating oil |
| C. | Consumable stores |
| D. | Chargeable expenses |
| Answer» D. Chargeable expenses | |
| 19. |
The process of distribution of overheads allotted to a particular department or cost center over the units produced is called: |
| A. | Allocation |
| B. | Apportionment |
| C. | Absorption |
| D. | Departmentalization |
| Answer» C. Absorption | |
| 20. |
A product with a high gross profit could be an unprofitable product. |
| A. | True |
| B. | False |
| C. | none |
| D. | none |
| Answer» B. False | |
| 21. |
To control costs it is essential to keep control on |
| A. | Prime cost |
| B. | Overheads |
| C. | Indirect materials and tools cost |
| D. | All of the above |
| Answer» D. All of the above | |
| 22. |
The overhead cost for a particular job = |
| A. | man hour rate x man hours spent on that job |
| B. | man hour rate / man hours spent on that job |
| C. | man hour rate + man hours spent on that job |
| D. | man hour rate – man hours spent on that jab |
| Answer» A. man hour rate x man hours spent on that job | |
| 23. |
The following method is an improvement over the percentage on direct labour cost method. |
| A. | Machine hour rate |
| B. | Percentage on prime cost |
| C. | Percentage on direct material cost |
| D. | Man hour rate |
| Answer» D. Man hour rate | |
| 24. |
Which of the following is/are the basic object/s of job analysis? |
| A. | Determination of wage rates |
| B. | Ascertain the relative worth of each job |
| C. | Breaking up job into its basic elements |
| D. | All of the given options |
| Answer» A. Determination of wage rates | |
| 25. |
An overhead absorption rate is used to: |
| A. | Share out common costs over benefiting cost canters |
| B. | Find the total overheads for a cost centre |
| C. | Charge overheads to products |
| D. | Control overheads |
| Answer» C. Charge overheads to products | |