E COST AND MANAGEMENT ACCOUNTING PRACTICE TEST PAPER (This test paper is for practice and self study only and not to be sent to the institute) Time allowed: 3 hours Maximum marks : 100 [Attempt all questions. Each question carries 1 mark. There is no negative mark for incorrect answers.] Q.1. Which of these is not an objective of Cost Accounting? (a) Ascertainment of Cost (b) Determination of Selling Price (c) Cost Control and Cost reduction (d) Assisting Shareholders in decision making Q.2. A profit centre is a centre (a) Where the manager has the responsibility of generating and maximising profits (b) Which is concerned with earning an adequate Return on Investment (c) Both of the above (d) Which manages cost Q.3. Responsibility Centre can be categorised into: (a) Cost Centres only (b) Profit Centres only (c) Investment Centres only (d) Cost Centres, Profit Centres and Investment Centres Q.4. Cost Unit is defined as: (a) Unit of quantity of product, service or time in relation to which costs may be ascertained or expressed (b) A location, person or an item of equipment or a group of these for which costs are ascertained and used for cost control. (c) Centres having the responsibility of generating and maximising profits (d) Centres concerned with earning an adequate return on investment Q.5. Fixed cost is a cost: (a) Which changes in total in proportion to changes in output (b) which is partly fixed and partly variable in relation to output (c) Which do not change in total during a given period despise changes in output Test Papers 561 (d) which remains same for each unit of output Q.6. Uncontrollable costs are the costs which be influenced by the action of a specified member of an undertaking. (a) can not (b) can (c) may or may not (d) must Q.7. Element/s of Cost of a product are: (a) Material only (b) Labour only (c) Expenses only (d) Material, Labour and expenses Q.8. Abnormal cost is the cost: (a) Cost normally incurred at a given level of output (b) Cost not normally incurred at a given level of output (c) Cost which is charged to customer (d) Cost which is included in the cost of the product Q.9. Conversion cost includes cost of converting……….into…….. (a) Raw material, WIP (b) Raw material, Finished goods (c) WIP, Finished goods (d) Finished goods, Saleable goods Q.10. Sunk costs are: (a) relevant for decision making (b) Not relevant for decision making (c) cost to be incurred in future (d) future costs Q.11. Describe the method of costing to be applied in case of Nursing Home: (a) Operating Costing (b) Process Costing (c) Contract Costing (d) Job Costing Q.12. Describe the cost unit applicable to the Bicycle industry: 562 EP-CMA (a) per part of bicycle (b) per bicycle (c) per tonne (d) per day Q.13. Calculate the prime cost from the following information: Direct material purchased: Rs. 1,00,000 Direct material consumed: Rs. 90,000 Direct labour: Rs. 60,000 Direct expenses: Rs. 20,000 Manufacturing overheads: Rs. 30,000 (a) Rs. 1,80,000 (b) Rs. 2,00,000 (c) Rs. 1,70,000 (d) Rs. 2,10,000 Q. 14. Total cost of a product: Rs. 10,000 Profit: 25% on Selling Price Profit is: (a) Rs. 2,500 (b) Rs. 3,000 (c) Rs. 3,333 (d) Rs. 2,000 Q.15. Calculate cost of sales from the following: Net Works cost: Rs. 2,00,000 Office & Administration Overheads: Rs. 1,00,000 Opening stock of WIP: Rs. 10,000 Closing Stock of WIP: Rs. 20,000 Closing stock of finished goods: Rs. 30,000 There was no opening stock of finished goods. Selling overheads: Rs. 10,000 (a) Rs. 2,70,000 (b) Rs. 2,80,000 (c) Rs. 3,00,000 (d) Rs. 3,20,000 Q.16. Calculate value of closing stock from the following: Opening stock of finished goods (500 units) : Rs. 2,000 Test Papers 563 Cost of production (10000 units) : Rs. 50,000 Closing stock (1000 units):? (a) Rs. 4,000 (b) Rs. 4,500 (c) Rs. 5,000 (d) Rs. 6,000 Q. 17. Which of these is not a Material control technique: (a) ABC Analysis (b) Fixation of raw material levels (c) Maintaining stores ledger (d) Control over slow moving and non moving items Q.18. Out of the following, what is not the work of purchase department: (a) Receiving purchase requisition (b) Exploring the sources of material supply (c) Preparation and execution of purchase orders (d) Accounting for material received Q.19. Bin Card is a (a) Quantitative as well as value wise records of material received, issued and balance; (b) Quantitative record of material received, issued and balance (c) Value wise records of material received, issued and balance (d) a record of labour attendance Q.20. Stores Ledger is a: (a) Quantitative as well as value wise records of material received, issued and balance; (b) Quantitative record of material received, issued and balance (c) Value wise records of material received, issued and balance (d) a record of labour attendance Q.21. Re-order level is calculated as: (a) Maximum consumption x Maximum re-order period (b) Minimum consumption x Minimum re-order period (c) 1/2 of (Minimum + Maximum consumption) (d) Maximum level - Minimum level Q.22. Economic order quantity is that quantity at which cost of holding and carrying inventory is: (a) Maximum and equal 564 EP-CMA (b) Minimum and equal (c) It can be maximum or minimum depending upon case to case. (d) Minimum and unequal Q.23. ABC analysis is an inventory control technique in which: (a) Inventory levels are maintained (b) Inventory is classified into A, B and C category with A being the highest quantity, lowest value. (c) Inventory is classified into A, B and C Category with A being the lowest quantity, highest value (d) Either b or c. Q.24. Which one out of the following is not an inventory valuation method? (a) FIFO (b) LIFO (c) Weighted Average (d) EOQ Q.25. In case of rising prices (inflation), FIFO method will: (a) provide lowest value of closing stock and profit (b) provide highest value of closing stock and profit (c) provide highest value of closing stock but lowest value of profit (d) provide highest value of profit but lowest value of closing stock Q.26. In case of rising prices (inflation), LIFO will: (a) provide lowest value of closing stock and profit (b) provide highest value of closing stock and profit (c) provide highest value of closing stock but lowest value of profit (d) provide highest value of profit but lowest value of closing stock Q.27. Calculate Re-order level from the following: Consumption per week: 100-200 units Delivery period: 14-28 days (a) 5600 units (b) 800 units (c) 1400 units (d) 200 units Q.28. Calculate EOQ (approx.) from the following details: Annual Consumption: 24000 units Ordering cost: Rs. 10 per order Test Papers 565 Purchase price: Rs. 100 per unit Carrying cost: 5% (a) 310 (b) 400 (c) 290 (d) 300 Q.29. Calculate the value of closing stock from the following according to FIFO method: 1st January, 2014: Opening balance: 50 units @ Rs. 4 Receipts: 5th January, 2014: 100 units @ Rs. 5 12th January, 2014: 200 units @ Rs. 4.50 Issues: 2nd January, 2014: 30 units 18th January, 2014: 150 units (a) Rs. 765 (b) Rs. 805 (c) Rs. 786 (d) Rs. 700 Q.30. Calculate the value of closing stock from the following according to LIFO method: 1st January, 2014: Opening balance: 50 units @ Rs. 4 Receipts: 5th January, 2014: 100 units @ Rs. 5 12th January, 2014: 200 units @ Rs. 4.50 Issues: 2nd January, 2014: 30 units 18th January, 2014: 1
Posted on: Mon, 08 Sep 2014 16:39:32 +0000
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