McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Management Studies (BMS) , Bachelor of Accounting and Finance (BAF) , Bachelor of Commerce (B Com) .
| 251. |
Cash Budget is a ……………….budget. |
| A. | Long term |
| B. | very long term |
| C. | short term |
| D. | very short term |
| Answer» C. short term | |
| 252. |
The primary difference between a fixed budget and a variable(flexible) budget is that a fixed budget: |
| A. | Includes only fixed costs, while a variable budget includes only variable costs. |
| B. | Is concerned only with future acquisitions of fixed assets, while a variable budget is concerned with expenses which vary with sales. |
| C. | Cannot be changed after the period begins, while a variable budget can be changed after the period begins. |
| D. | Is a plan for a single level of sales(or other measure of activity), while a variable budget consists of several plans, one for each of several levels of sales (or other measure of activity) |
| Answer» D. Is a plan for a single level of sales(or other measure of activity), while a variable budget consists of several plans, one for each of several levels of sales (or other measure of activity) | |
| 253. |
Sales budget is a |
| A. | Functional budget |
| B. | Master budget |
| C. | Expenditure budget |
| D. | none of these |
| Answer» A. Functional budget | |
| 254. |
In the case of plant, the limiting factor may be: |
| A. | Insufficient capacity |
| B. | shortage of experienced salesmen |
| C. | general shortage of power |
| D. | shortage of materials |
| Answer» A. Insufficient capacity | |
| 255. |
The difference between fixed and variable cost has a special significance in the preparation of |
| A. | Flexible budget |
| B. | master budget |
| C. | cash budget |
| D. | sales budget |
| Answer» A. Flexible budget | |
| 256. |
The budget that is prepared first of all is………….. |
| A. | Cash budget |
| B. | master budget |
| C. | budget for the key factor |
| D. | sales budget |
| Answer» C. budget for the key factor | |
| 257. |
In case of materials the key factor may be. |
| A. | Insufficient advertising |
| B. | restrictions imposed by quota |
| C. | low market demand |
| D. | shortage of power |
| Answer» B. restrictions imposed by quota | |
| 258. |
The budget which commonly takes the form of budgeted profit and loss account and balance sheet is |
| A. | cash budget |
| B. | master budget |
| C. | flexible budget |
| D. | fixed budget |
| Answer» B. master budget | |
| 259. |
Standard cost is a …………..cost |
| A. | Predetermined |
| B. | historical |
| C. | actual |
| D. | final |
| Answer» A. Predetermined | |
| 260. |
The limitations of …………………………has led to the development of standard costing system. |
| A. | Historical costing system |
| B. | cost accounting |
| C. | management accounting |
| D. | none of these |
| Answer» A. Historical costing system | |
| 261. |
Standard costing is more widely applied in…………………industries. |
| A. | Process and engineering |
| B. | jobbing industries |
| C. | construction industry |
| D. | all of these |
| Answer» A. Process and engineering | |
| 262. |
Three types of standards are………….. |
| A. | Current standard, basic standard and normal standard |
| B. | Currency standard, basel standard and actual standard |
| C. | Actual standard, estimated standard and expected standard |
| D. | Expected standard, ideal standard and current standard |
| Answer» A. Current standard, basic standard and normal standard | |
| 263. |
The deviation of the actual cost or profit or sales from the standard cost or profit or sale is known as ………… |
| A. | Difference |
| B. | Variance |
| C. | Discrepancy |
| D. | Inconsistency |
| Answer» B. Variance | |
| 264. |
Management by exception is exercising control over……….. |
| A. | Costs |
| B. | Favourable items |
| C. | Unfavourable items |
| D. | all of these |
| Answer» C. Unfavourable items | |
| 265. |
Material price variance is the difference between standard and actual prices of materials used multiplied by……………….. |
| A. | Actual quantity of materials used |
| B. | Budgeted quantity of materials used |
| C. | Standard quantity of materials used |
| D. | Either a or b |
| Answer» A. Actual quantity of materials used | |
| 266. |
Labour cost variance is the difference between standard cost of labour and……….. |
| A. | Budgeted cost of labour |
| B. | Estimated cost of labour |
| C. | Actual cost of labour |
| D. | None of these |
| Answer» C. Actual cost of labour | |
| 267. |
Idle time variance is…………. |
| A. | Idle time x actual labour |
| B. | Idle time x standard rate |
| C. | Idle time x budgeted labour rate |
| D. | Idle time x historical cost |
| Answer» B. Idle time x standard rate | |
| 268. |
Volume variance is divided into…………… |
| A. | Capacity variance, calendar variance andExpenditure variance |
| B. | Capacity variance, calendar variance and efficiency variance |
| C. | Capacity variance, expenditure variance and efficiency variance |
| D. | Calendar variance, expenditure variance and efficiency variance |
| Answer» B. Capacity variance, calendar variance and efficiency variance | |
| 269. |
Standards set provide yardsticks against which………….are compared. |
| A. | Budgeted costs |
| B. | Estimated costs |
| C. | Actual costs |
| D. | None of these |
| Answer» C. Actual costs | |
| 270. |
The technique of standard costing may not be applicable in case of |
| A. | Large concerns |
| B. | Small concerns |
| C. | All concerns |
| D. | Both b & c |
| Answer» D. Both b & c | |
| 271. |
Total Material cost variance = |
| A. | Standard cost of materials-actual cost of materials |
| B. | Budgeted cost of materials- actual cost of materials |
| C. | Standard cost of materials-budgeted cost of materials |
| D. | Actual cost of materials- budgeted cost of materials |
| Answer» A. Standard cost of materials-actual cost of materials | |
| 272. |
Material Usage Variance=Material Mix Variance +………….. |
| A. | Material Yield Variance |
| B. | Material cost variance |
| C. | Material price variance |
| D. | Material quantity variance |
| Answer» A. Material Yield Variance | |
| 273. |
Material Price Variance = Actual Usage (……………) |
| A. | Standard price |
| B. | Standard unit price-actual unit price |
| C. | Actual price |
| D. | Standard usage |
| Answer» B. Standard unit price-actual unit price | |
| 274. |
Material usage variance = standard price(……………….) |
| A. | Standard usage-actual usage |
| B. | Standard unit price-actual unit price |
| C. | Standard quantity |
| D. | Actual quantity |
| Answer» A. Standard usage-actual usage | |
| 275. |
Material mix variance = standard cost of standard mix - ……………….. |
| A. | Actual cost of actual mix |
| B. | Actual cost of standard mix |
| C. | Standard cost of actual mix |
| D. | Standard cost of budgeted mix |
| Answer» C. Standard cost of actual mix | |
| 276. |
Total Labour cost variance = |
| A. | Standard cost of labour - actual cost of labour |
| B. | Standard rate(standard time for actual output-actual time worked) |
| C. | Standard rate (standard time for actual output- actual time paid for) |
| D. | Actual time taken (standard rate-actual rate) |
| Answer» A. Standard cost of labour - actual cost of labour | |
| 277. |
Volume Variance = |
| A. | Standard rate (Actual output-budgeted output) |
| B. | Actual output x standard rate-budgeted fixed overheads |
| C. | Standard rate per hour(standard hours produced-actual hours) |
| D. | All of the above |
| Answer» D. All of the above | |
| 278. |
A favourable variance will arise when capital revenues are………..than expected. |
| A. | More |
| B. | Less |
| C. | Lesser |
| D. | None of the above |
| Answer» A. More | |
| 279. |
An unfavourable material price variance occurs because of: |
| A. | Price increase in raw materials |
| B. | Price decrease in raw materials |
| C. | Less than anticipated normal wastage in the manufacturing process |
| D. | More than anticipated normal wastage in the manufacturing process |
| Answer» A. Price increase in raw materials | |
| 280. |
The type of standard best suitable for cost control purpose is |
| A. | Basic standard |
| B. | Ideal standard |
| C. | Normal standard |
| D. | Expected standard |
| Answer» D. Expected standard | |
| 281. |
An unfavourable material usage arises because of: |
| A. | Price increase in raw materials |
| B. | Price decrease in raw mateials |
| C. | Less than anticipated normal wastage in the manufacturing process |
| D. | More than anticipated normal wastage in the manufacturing process |
| Answer» D. More than anticipated normal wastage in the manufacturing process | |
| 282. |
Volume variance arises because of : |
| A. | Increase in overhead rate per hour |
| B. | Decrease in overhead rate per hour |
| C. | Increase or decrease in actual output as compared to the budgeted output. |
| D. | Difference in budgeted overheads and actual overheads. |
| Answer» C. Increase or decrease in actual output as compared to the budgeted output. | |
| 283. |
Labour rate variance is computed by multiplying the |
| A. | Standard labour rate with the difference between standard labour hours and actual labour hours |
| B. | Actual labour hours with the difference between standard labour hours and actual labour hours |
| C. | Actual labour rate with the difference between standard labour rate and actual labour hours. |
| D. | None of the above |
| Answer» D. None of the above | |
| 284. |
……………..is an example of long-term budget |
| A. | Cash budget |
| B. | Capital expenditure budget |
| C. | Research and development budget |
| D. | Both b & c |
| Answer» D. Both b & c | |
| 285. |
……………..is an example of short-term budget |
| A. | Cash budget |
| B. | Capital expenditure budget |
| C. | Material budget |
| D. | Both a & c |
| Answer» D. Both a & c | |
| 286. |
The main objective of cost accounting is: |
| A. | Ascertainment of cost |
| B. | Control of cost |
| C. | Determination of selling price |
| D. | All of the above |
| Answer» D. All of the above | |
| 287. |
The expected return or benefit foregone in rejecting one course of action for the other is known as |
| A. | sunk cost |
| B. | opportunity cost |
| C. | conversion cost |
| D. | differential cost |
| Answer» B. opportunity cost | |
| 288. |
Costs which are ascertained after they have been incurred are called |
| A. | imputed costs |
| B. | sunk costs |
| C. | historical costs |
| D. | marginal costs |
| Answer» C. historical costs | |
| 289. |
A cost centre is |
| A. | a production or service location, function, activity or item of equipment whose costs may be attributed to cost units |
| B. | acentre for which an individual budget is drawn-up |
| C. | acentre where cost is classified on the basis of variability |
| D. | an amount of expenditure attributable to an activity |
| Answer» A. a production or service location, function, activity or item of equipment whose costs may be attributed to cost units | |
| 290. |
These accounts are obligatory to be prepared according to the legal requirements of Companies Act and Income Tax Act. |
| A. | Cost Accounting |
| B. | Financial Accounting |
| C. | Management Accounting |
| D. | All of the above |
| Answer» B. Financial Accounting | |
| 291. |
The cost unit for a cement industry is |
| A. | Kilogram |
| B. | Dozen |
| C. | Tonne |
| D. | Square foot |
| Answer» C. Tonne | |
| 292. |
Hypothetical costs which are specially computed outside the accounting system for the purpose of decision making are called |
| A. | Replacement Cost |
| B. | Imputed Cost |
| C. | Marginal Cost |
| D. | Future Cost |
| Answer» B. Imputed Cost | |
| 293. |
Direct material + Directlabour + direct expenses = |
| A. | Prime Cost |
| B. | Works Cost |
| C. | Cost of Production |
| D. | Total Cost |
| Answer» A. Prime Cost | |
| 294. |
Costing is a technique of ascertaining: - |
| A. | Cost |
| B. | Profit |
| C. | Loss |
| D. | Standard |
| Answer» A. Cost | |
| 295. |
The cost can be controlled by: |
| A. | Standard Costing |
| B. | Budgetary Control |
| C. | Proper presentation |
| D. | All of these |
| Answer» D. All of these | |
| 296. |
It is a device for the purpose of breaking up cost into smaller sub-divisions:- |
| A. | Cost Unit |
| B. | Cost Control |
| C. | Cost center |
| D. | Prime cost |
| Answer» A. Cost Unit | |
| 297. |
Elements of cost are:- |
| A. | Direct materials |
| B. | Direct labors |
| C. | Overheads |
| D. | All of thesew |
| Answer» D. All of thesew | |
| 298. |
These types of costs are partly fixed & partly variable is relation to output:- |
| A. | Fixed Cost |
| B. | Variable Cost |
| C. | Semi-variable Cost |
| D. | Works Cost |
| Answer» C. Semi-variable Cost | |
| 299. |
Cost accounting has been developed because of limitation in:- |
| A. | Financial a/c |
| B. | Management a/c |
| C. | Prime Cost |
| D. | None of these |
| Answer» A. Financial a/c | |
| 300. |
The cost which is to be incurred even when a business unit is closed is a ____ cost. |
| A. | Imputed |
| B. | Historical |
| C. | Opportunity |
| D. | Shutdown |
| Answer» D. Shutdown | |
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