III B.Com [ ] Semester V Core: Cost Accounting 502C Multiple Choice Questions.

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1 1 of 36 8/28/ :47 PM Dr.G.R.Damodaran College of Science (Autonomous, affiliated to the Bharathiar University, recognized by the UGC)Reaccredited at the 'A' Grade Level by the NAAC and ISO 9001:2008 Certified CRISL rated 'A' (TN) for MBA and MIB Programmes 1. Basic objective of cost accounting is. A. tax compliance. B. financial audit. C. cost ascertainment D. profit analysis. III B.Com [ ] Semester V Core: Cost Accounting 502C Multiple Choice Questions. 2. Direct cost incurred can be identified with. A. each department. B. each unit of output. C. each month. D. each executive. 3. Overhead cost is the total of. A. all indirect costs. B. all direct costs. C. indirect and direct costs. D. all specific costs. 4. Imputed cost is a. A. notional cost. B. real cost. C. normal cost. D. variable cost. 5. Operating costing is suitable for. A. job order business. B. contractors. C. sugar industries. D. service industries. 6. Process costing is suitable for. A. hospitals.

2 2 of 36 8/28/ :47 PM B. oil reefing firms. C. transport firms. D. brick laying firms. 7. Cost classification can be done in. A. two ways. B. three ways. C. four ways. D. several ways. 8. Costing refers to the techniques and processes of. A. ascertainment of costs. B. allocation of costs. C. apportion of costs. D. distribution of costs. 9. Cost accounting was developed because of the. A. limitations of the financial accounting. B. limitations of the management accounting. C. limitations of the human resource accounting. D. limitations of the double entry accounting. 10. Multiple costing is a technique of using two or more costing methods for ascertainment of cost by. A. the same firm. B. the several firms. C. the same industry. D. the several industries. 11. Wages paid to a labour who was engaged in production activities can be termed as. A. direct cost. B. indirect cost. C. sunk cost. D. imputed cost. 12. The cost which is to be incurred even when a business unit is closed is a. A. imputed cost. B. historical cost. C. sunk cost. D. shutdown cost. 13. Classification of cost is useful. A. to find gross profit. B. to find net profit.

3 3 of 36 8/28/ :47 PM C. to identify costs. D. to identify efficiency. 14. Elements of costs are. A. three types. B. four types. C. five types. D. seven types. 15. Direct expenses are also called. A. major expenses. B. chargeable expenses. C. overhead expenses. D. sundry expenses. 16. Indirect material used in production is classified as. A. office overhead. B. selling overhead. C. distribution overhead. D. production overhead. 17. Warehouse rent is a part of. A. prime cost. B. factory cost. C. distribution cost. D. production cost. 18. Indirect material scrap is adjusted along with. A. prime cost. B. factory cost. C. labour cost. D. cost of goods sold. 19. Which one of the following is not considered for preparation of cost sheet? A. Factory cost. B. Goodwill written off. C. Labour cost. D. Selling cost. 20. Sale of defectives is reduced from. A. prime cost. B. works cost. C. cost of production. D. cost of sales.

4 4 of 36 8/28/ :47 PM 21. Tender is an. A. estimation of profit. B. estimation of cost. C. estimation of selling price. D. estimation of units. 22. Cost of sales plus profit is. A. selling price. B. value of finished product. C. value of goods produced. D. value of stocks. 23. Prime cost includes. A. direct materials, direct wages and indirect expenses. B. indirect materials and indirect labour and indirect expenses. C. direct materials, direct wages and direct expenses. D. direct materials, indirect wages and indirect expenses. 24. Total of all direct costs is termed as. A. prime cost. B. works cost. C. cost of sales. D. cost of production. 25. Depreciation of plant and machinery is a part of. A. factory overhead. B. selling overhead. C. distribution overhead. D. administration overhead. 26. Audit fess is a part of. A. works on cost. B. selling overhead. C. distribution overhead. D. administration overhead. 27. Counting house salary is part of. A. factory overhead. B. selling overhead. C. distribution overhead. D. administration overhead.

5 5 of 36 8/28/ :47 PM 28. Factory overhead can be charged on the basis of. A. material cost. B. labour cost. C. prime cost. D. direct expenses. 29. Office and administrative expenses can be charged on the basis of. A. material cost. B. labour cost. C. prime cost. D. factory cost. 30. Selling and distribution expenses can be charged on the basis of. A. material cost. B. labour cost. C. prime cost. D. factory cost. 31. One of the most important tools in cost planning is. A. direct cost. B. budget. C. cost sheet. D. marginal costing. 32. The purpose of financial accounting is to provide information for. A. fixing prices. B. controlling cost. C. locating factors leading to wastages and losses. D. assessing the profitability and financial position of the firm. 33. An example of variable cost is. A. property tax. B. interest on capital. C. direct material cost. D. depreciation of machinery. 34. Cost accounting concepts include all the following except. A. planning. B. controlling. C. profit sharing. D. product costing. 35. Toy manufacturing industry should use. A. unit costing.

6 6 of 36 8/28/ :47 PM B. process costing. C. batch costing. D. multiple costing. 36. Job costing used in. A. paper mills. B. chemical works C. printing works. D. textile mill. 37. When premises are owned, a charge for rent is. A. production cost. B. imputed cost. C. marginal cost. D. cost of sales. 38. A document which provides for the detailed cost centre and cost unit is. A. tender. B. cost sheet. C. invoice. D. profit statement. 39. Cost unit of a sugar industry can be. A. per litre. B. per tonne. C. per acre. D. per metre. 40. The ascertainment of costs after they have been incurred is known as. A. marginal costing. B. historical costing. C. sunk cost. D. notional cost. 41. Direct material is a. A. fixed cost. B. variable cost. C. semi variable cost. D. semi fixed cost. 42. Direct material is a. A. manufacturing cost. B. administrative cost. C. selling cost.

7 7 of 36 8/28/ :47 PM D. distribution cost. 43. The most important element of cost in manufacturing industries is. A. material. B. labour. C. direct costs. D. indirect costs. 44. Which of the following is considered to be the normal loss of material? A. Loss due to accident. B. Pilferage. C. Loss due to breaking the bulk. D. Loss due to careless handling of materials. 45. According to which method of pricing issues is close to current economic values? A. Last In First Out. B. First In First Out C. Highest In First Out. D. weighted average price. 46. Continuous stock taking is a part of. A. annual stock taking. B. perpetual inventory. C. ABC analysis. D. VED analysis. 47. Which of the following methods of stock control aims at concentrating efforts on selected items of material? A. Perpetual inventory system. B. Material turnover ratio. C. Level setting. D. ABC analysis. 48. In which of the following methods issues of materials are priced at a predetermined rate? A. Inflated price method. B. Standard price method. C. Replacement price method. D. Specific price method. 49. In which of the following methods issues of materials are priced at the price prevailing at the time of issue? A. Inflated price method. B. Standard price method. C. Replacement price method.

8 8 of 36 8/28/ :47 PM D. Specific price method. 50. In base stock method of pricing the material issues, the term base stock represents the. A. quantity of stock being issued. B. stock in balance. C. minimum stock. D. maximum stock 51. Material consumed is Rs. 5,00,000 Opening stock of raw material is Rs. 50,000 and Closing stock of raw material is Rs. 25,000. What is the cost of raw material purchased? A. Rs. 4,50,000. B. Rs. 4,75,000. C. Rs. 5,25,000. D. Rs. 5, 50, If selling price is Rs. 25,000 and profit is Rs. 5,000 then what is the percentage of profit on cast? A. 20%. B. 25%. C %. D. 35%. 53. Material control involves. A. consumption of material. B. issue of material. C. purchase of material. D. purchase, storage and issue of material. 54. Material requisition is meant for. A. purchase of material. B. supply of material from stores. C. sale of material. D. storage of material. 55. Stock control through stock levels and EOQ is called. A. demand and supply method. B. perpetual inventory system. C. control by important and exception D. automatic order method. 56. ABC analysis is. A. At Best Control. B. Always Better Control. C. Average better Control. D. All best control.

9 9 of 36 8/28/ :47 PM 57. JIT inventory system is. A. Just In Time. B. Just Inventory Time. C. Job In Time. D. Job Inventory Time. 58. Perpetual inventory system involves. A. bincard and stores ledger. B. bill of material and material requisition. C. purchase requisition and purchase order. D. inward and outward invoices. 59. FIFO is. A. Fast Investment in Future Order. B. First In First Out. C. Fast In Fast Out D. Fast Issue Of Fast Order. 60. LIFO method of pricing of materials is more suitable when. A. material prices are rising. B. material prices are falling. C. material prices are constant. D. material prices are fluctuating. 61. Average method of pricing the material issues is useful when. A. material prices are rising. B. material prices are falling. C. material prices are constant. D. material prices are fluctuating. 62. Scrap is. A. residue of material. B. wastage of material. C. surplus material. D. abnormal loss of material. 63. Material is issued by store keeper against. A. material requisition. B. material order C. goods received note. D. purchase requisition.

10 10 of 36 8/28/ :47 PM 64. EOQ stands for. A. Economic Order Quantity. B. Essential Order Quantity. C. Economic Output Quantity. D. Essential Output Quantity. 65. The document which is prepared after receiving and inspecting material. A. material record note B. goods received note. C. bill of material. D. inventory record. 66. VED is a technique for. A. the control of materials. B. the control of labour. C. the control of direct expenses. D. the control of overhead. 67. Defectives. A. cannot be rectified and made into good units. B. can be rectified and mad made into good units. C. can be a part of finished product. D. can be termed as spoilage. 68. Bin card is maintained by. A. costing department. B. stores department. C. finance department. D. accounting department. 69. Labour turnover is. A. productivity of labour. B. efficiency of the labour C. change in labour force. D. total cost of the labour. 70. Time study is for. A. measurement of work. B. fixation of standard time C. ascertainment of actual hours. D. ascertainment of labour cost. 71. Idle time is. A. time spent by workers in factory.

11 11 of 36 8/28/ :47 PM B. time spent by workers in office. C. time spent by workers off their work. D. time spent by workers on their job 72. Over time is. A. actual hours being more than normal time. B. actual hours being more than standard time. C. standard hours being more than actual hours. D. actual hours being less than standard time. 73. Time keeping refers to. A. time spent by worker on their job. B. time spent by workers in the factory. C. time spent by workers without work. D. time spent by workers off their job. 74. Time booking refers to. A. time spent by worker on their job. B. time spent by workers in the factory C. time spent by workers without work. D. time spent by workers off their job. 75. Difference between attendance time and job time is. A. job time. B. over time C. actual time. D. idle time. 76. Piece workers are paid on the basis of. A. output sold. B. output produced. C. output in stock. D. input received. 77. Time wages are paid on the basis of. A. actual time. B. standard time. C. time saved. D. overtime. 78. Differential piece wages means. A. different wages for different level of performance. B. different wages for different time consumed. C. different wages for different level of output

12 12 of 36 8/28/ :47 PM D. different wages for different types of industries. 79. For calculation of labour turnover under separation method. A. only the no. of employees left from the organization is considered. B. only the no. of employees replaced are considered. C. only the no. of employees retrenched are considered. D. only the no. of employees who are new to the organization is considered. 80. Those cost which is incurred to prevent the labour turnover. A. management cost. B. replacement cost. C. preventive cost. D. compensation cost. 81. Normal idle time. A. can be avoided. B. can be minimized. C. cannot be avoided. D. can be controlled. 82. An employee is eligible for getting overtime wage if he/she works for more than. A. 6 hrs a day. B. 8 hrs a day. C. 9 hrs a day. D. 12 hrs a day. 83. Which of the following methods of wage payment is most suitable where quality and accuracy of work is of primary importance? A. Piece rate system. B. Time rate system. C. Differential piece rate system. D. Halsey premium plan. 84. Cost of idle time arising due to non availability of raw material is. A. charged to costing profit and loss account. B. charged to financial profit and loss account. C. charged to factory overhead. D. recovered by inflating the wage rate 85. Labour productivity can NOT be measured by comparing. A. actual time with standard time B. total output with total man hours. C. added value for the product with total wage cost. D. total wage and total output.

13 13 of 36 8/28/ :47 PM 86. Wage sheet is prepared by. A. time keeping department. B. personnel department. C. payroll department. D. cost accounting department. 87. Time and motion study is conducted by. A. time keeping department. B. personnel department. C. payroll department. D. engineering department. 88. Under Gantts task and bonus plan no bonus is payable to a worker if his efficiency is less than. A. 50%. B. 60%. C. 83.5%. D. 100%. 89. When standard output is 10 units per hour and actual output is 12 units per hour, the efficiency is. A. 75%. B. 80%. C. 90%. D. 120%. 90. Given that for a job standard time is 8 hrs, actual time taken is 6 hrs and the time rate is Rs. 2 per hr. What is the total wages under Halsey premium plan? A. Rs. 12. B. Rs. 14. C. Rs. 16. D. Rs Comparing Rowan plan and Halsey plan, it is seen that when the time saved is less than 50% of the standard time. A. Rowan plan allows more wages to a worker than Halsey plan. B. Rowan plan allows less wages to a worker than Halsey plan. C. Rowan and Halsey plan allow equal wages to a worker. D. Rowan plan and Halsey plan are equal to ordinary time wage. 92. Bonus under Halsey plan is paid. A. at 50% of time saved. B. at 75% of time saved

14 14 of 36 8/28/ :47 PM C. at 80% of time saved. D. at 90% of time saved. 93. Halsey premium plan is. A. individual incentive scheme. B. group incentive scheme. C. time and piece wage system. D. differential piece wage system. 94. Bonus under Rowan scheme is paid. A. as a proportion of standard time to actual time. B. as a proportion of actual time to standard time. C. as a proportion of time saved to standard time. D. as a proportion of time saved to standard time. 95. Labour cost is the second element of. A. cost. B. profit. C. sales. D. task. 96. Number of methods available for calculation of Labour turnover is. A. two. B. three. C. four. D. five. 97. Over time premium is paid. A. at normal rate. B. below the normal rate. C. at 50% of the normal rate. D. at double normal rate. 98. Merricks multiple piece rate system has. A. two rates. B. three rates. C. four rates. D. five rates. 99. How many rate are used to calculate wages under Taylorss differential piece rate system? A. two. B. three. C. four. D. five.

15 15 of 36 8/28/ :47 PM 100. Overhead is also known as. A. on cost. B. basic cost. C. extra cost. D. chargeable expenses Reorder level =. A. maximum level - minimum level. B. maximum consumption X maximum reorder period. C. minimum consumption x minimum reorder period. D. normal consumption X normal reorder period Overhead can be classified according to function-wise as. A. fixed o/h, variable o/h and semi-variable o/h. B. controllable o/h and uncontrollable o/h. C. manufacturing o/h, administration o/h and selling & distribution o/h. D. past cost and future cost Allotment of overhead incurred for a particular cost centre to that specific cost centre is. A. allocation. B. allotment. C. primary distribution. D. secondary distribution Establishment of costing system in India is essential. A. in the case of all industrial concerns. B. for all companies having a paid up capital of Rs. 25 lakhs. C. in the case of such companies as may be required to maintain costing records by the central Govt. under section 209 of the companies act. D. in case the concerned firm is covered by the MRTP act Cost accounting. A. like financial accounting is exact and precise. B. necessarily works on the basis of estimates and therefore has to be satisfied with reasonable accuracy. C. deals only with future costs and ignores historical cost. D. analyses historical cost A former producing only wheat for which price is fixed by government should have a costing system in order to. A. ascertain the profit earned by him. B. establish the cost per quintal of wheat produced by him. C. control the various cost incurred. D. ascertain the marginal cost.

16 16 of 36 8/28/ :47 PM 107. The process of setting standards and comparing actual performance with standards with a view to control the cost is. A. cost reduction. B. cost control. C. cost allocation. D. cost ascertainment Under ABC method of material control, the material are classified according to. A. its value. B. its usage. C. its nature. D. its availability The use of several under takings of the same costing principles and/or practices are known as. A. marginal costing. B. historical costing. C. absorption costing. D. uniform costing 110. The loss which arises in manufacturing activity on account of inherent nature of the product is. A. normal loss. B. abnormal loss. C. net loss. D. gross loss Generally types of stores are classified into. A. two types. B. three types. C. four types. D. five types In order to avoid the stoppage of production due to shortage of material. A. maximum stock level is maintained. B. minimum stock level is maintained. C. re-order level is maintained. D. average stock level is maintained In order to avoid the cost of overstocking. A. maximum stock level is maintained. B. minimum stock level is maintained. C. re-order level is maintained.

17 17 of 36 8/28/ :47 PM D. average stock level is maintained This is a point at which the store keeper should initiate purchase requisition for fresh supply. It is. A. maximum stock level. B. minimum stock level C. reorder level. D. average stock level This is a level at which normal issue of material are stopped, but issued under special condition. It is. A. maximum stock level. B. minimum stock level. C. danger level. D. average stock level Discarded material substances having no value is called. A. waste. B. scrap. C. defectives. D. spoilage Discarded material substances having some value is. A. waste. B. scrap. C. defective. D. spoilage Annual usage is 6000 Rs. 20 per unit. Cost of placing an order is Rs. 60 and annual carrying cost of one unit is 10% of inventory value. EOQ =. A. 600 units. B. 750 units. C units. D units The method in which issue prices of material is computed by dividing total purchase cost of material in stock with total quantity in stock. A. Simple average method. B. weighted average method. C. periodical average method. D. periodic simple average method If Minimum stock level is 900 units and economic order quantity is 750 units, then average stock level =.

18 18 of 36 8/28/ :47 PM A. 825 units. B units. C units. D units Under which method the rate of wages are linked with the cost of living index? A. Flat time rate. B. High day rate. C. Measured day rate. D. Graduated time rate Under Halsey-Weir scheme, workers are paid. A. 25% of time saved. B. 30% of time saved. C. 35% of time saved. D. 50% of time saved Under which plan efficiency is shared by employee and employer equally? A. Time rate. B. Gantts task and bonus plan. C. Halsey plan. D. Rowan plan Which of the following method of wage payment is most suitable where the speed of production is beyond the control of worker? A. Time rate system. B. Piece rate system. C. Halsey premium system. D. Rowan premium plan Standard time for 10 units of production is 12 minutes. A worker produced 200 units in 3 hours. Time saved =. A. 1/2 hour. B. 1 hours. C. 1 1/2 hours. D. 21/2 hours Under which method of wage payment, wages are influenced by idle time? A. Straight piece rate. B. Differential piece rate. C. Premium and bonus plan. D. Time wage rate Standard time is 60 hours and guaranteed time rate is 50 paise per hour. What is the amount of wages

19 19 of 36 8/28/ :47 PM if job is completed in 40 hours? (Rowan plan is in use). A. Rs B. Rs C. Rs D. Rs The allotment of whole item of cost to cost centre or cost units is called. A. cost allocation. B. cost apportionment. C. cost absorption. D. cost disbursement Packing cost is. A. production cost. B. selling cost. C. administration cost. D. distribution cost Directors remuneration and expenses form part of. A. production overhead. B. administrative overhead. C. selling overhead. D. distribution overhead Salary of a foreman should be classified. A. fixed overhead. B. variable overhead. C. semi variable overhead. D. prime cost Charging to a cost centre those overheads that result solely from the existence of that cost centre is known as. A. allocation. B. apportionment. C. absorption. D. allotment Absorption means. A. charging overheads to cost centres. B. charging of overheads to cost units. C. charging of overheads to cost centres or cost units. D. allotment of overheads to different departments Which of the following is a service department?

20 20 of 36 8/28/ :47 PM A. Refining department. B. Machining department C. Receiving department. D. Finishing department 135. Which of the following is NOT a selling overhead? A. Insurance to cover sold goods while in transit. B. Royalty on sales. C. Legal cost on debt realization. D. Distribution of samples 136. Which method of absorption of factory overheads do you suggest in a concern which produces only one uniform item of product? A. Percentage of direct wages basis. B. Direct labour rate basis. C. Machine hour rate D. A rate per unit of output When the actual overhead is more than absorbed overhead it is known as. A. over absorption. B. under absorption. C. equal absorption. D. major absorption Idle capacity of a plant refers to the difference between. A. maximum capacity and practical capacity. B. practical capacity and normal capacity. C. practical capacity and capacity based on sales expectancy. D. maximum capacity and actual capacity Bad debt is an example of. A. production overhead. B. administrative overhead. C. selling overhead. D. distribution overhead Number of worker employed is used as basis for the apportionment of. A. rent. B. canteen expenses. C. PF contribution. D. rate and tax Fixed cost per unit increases when. A. variable cost per unit increases.

21 21 of 36 8/28/ :47 PM B. variable cost per unit decreases. C. production volume increases. D. production volume decreases Variable cost per unit. A. varies when output varies. B. remains constant. C. increase when output increases D. decreases when output decreases 143. Increase in total variable cost is due to. A. increase in fixed cost. B. increase in sales. C. increase in production. D. increase in efficiency An example of fixed cost. A. property tax. B. rent for building. C. direct material cost. D. direct wages The process of allocating and apportioning the costs on suitable basis to all the departments is. A. departmentalization. B. primary distribution. C. secondary distribution. D. classification The process of grouping of costs according to some common characteristics. A. absorption. B. primary distribution. C. secondary distribution. D. classification The process of redistribution of service department costs to production departments is. A. departmentalization. B. primary distribution C. secondary distribution. D. classification Which of the following is an example of semi-variable cost? A. Salary. B. Tax.

22 22 of 36 8/28/ :47 PM C. Telephone expenses. D. Office expenses Depreciation of plant can be apportioned on the basis of. A. plant value. B. plant size. C. working days. D. output produced Indirect materials can be apportioned on the basis of. A. direct material. B. prime cost. C. direct labour hour. D. machine hour Fire insurance of stock can be apportioned on the basis of. A. value of stock. B. volume of stock. C. number of stores requisition. D. material used When there is no inter departmental services between two service departments then which of the following method of distribution can be used? A. Direct redistribution method. B. Step method. C. Trial and error method. D. Repeated distribution method A cost unit is. A. the cost per machine hour. B. the cost per labour hour. C. a unit of production or service in relation to which costs are ascertained D. a measure of work output in a standard hour Factory overhead is also called as. A. sundry overhead. B. extra overhead. C. works overhead. D. total overhead Appropriate basis for apportionment of material handling charges is. A. material purchased. B. material in stock. C. material consumed.

23 23 of 36 8/28/ :47 PM D. material wasted Recreation expenses in factory are apportioned on the basis of. A. material cost. B. wages. C. prime cost. D. number of employees Sundry overhead expenses may be apportioned in the ratio of. A. material consumed. B. number of employees. C. labour hours. D. machine hours Departmentalization of overhead is known as. A. primary distribution. B. secondary distribution. C. absorption. D. allocation Charging output with overhead at reasonable rate is called. A. allocation. B. appropriation. C. apportionment. D. absorption Comprehensive machine hour rate includes. A. machine operator s wages. B. managing director s salary. C. income tax. D. office rent Creche expenses can be apportioned on the basis of. A. no. of male employees. B. no. of female employees. C. no. of total employees. D. no. of managerial employees When the actual overhead is less than the absorbed overhead it is. A. over absorption. B. under absorption. C. equal absorption. D. major absorption.

24 24 of 36 8/28/ :47 PM 163. In which method of overhead absorption, the overhead rate will not be in percentage? A. Direct labour method. B. Direct wage method. C. Prime cost method. D. Labour hour method Factory overhead is Rs. 3,00,000. and direct material cost is Rs. 5,00,000.What is the overhead rate under direct material cost method? A. 25%. B. 30%. C. 60%. D % Works overhead is Rs. 40,000, total machine hours is 8500 hours and time allowed for machine setting is 500 hours. What is the machine rate? A. Rs. 2 per hour B. Rs. 3 per hour. C. Rs. 4 per hour. D. Rs. 5 per hour Expenditure over and above prime cost is known as. A. overhead. B. factory cost. C. cost of sales. D. cost of production Cost of the machine is Rs. 95,000 and installation charges is Rs.15,000. Scrap value at the end of the working life of 10 years is Rs. 10,000. Machine works for 2000 hours in a year. What is the per hour rate of depreciation? A. Rs. 4 per hour. B. Rs. 5 per hour. C. Rs. 6 per hour. D. Rs. 8 per hour In a machine dominated industry which method of overhead absorption is suitable? A. Direct material cost method. B. Prime cost method. C. Labour hour method. D. Machine hour method In labour oriented manufacturing industry which method of overhead absorption is suitable? A. Direct material cost method. B. Prime cost method. C. Labour hour method.

25 25 of 36 8/28/ :47 PM D. Machine hour method Most appropriate basis for the apportionment of power is. A. no. of labour. B. no. of output. C. no. of machines. D. horse power of machines The type of loss that should not affect cost of inventories is. A. normal loss. B. abnormal loss. C. seasonal loss. D. standard loss The costing method which can be used in industry where the product pass through different processes is known as. A. job costing. B. operating costing. C. batch costing. D. process costing The expenses relating to a particular process is. A. debited to that process a/c. B. credited to that process a/c. C. debited to costing profit and loss a/c. D. debited to profit and loss a/c Normal loss units and its realizable scrap value(if any) is. A. debited to process a/c. B. credited to process a/c. C. debited to costing profit and loss a/c. D. debited to profit and loss a/c Value of normal loss is charged to. A. other good product B. trading a/c. C. profit and loss a/c. D. costing profit and loss a/c Which of the following will be affected by normal loss? A. Costing profit. B. Financial profit. C. Process profit. D. cost of Good units.

26 26 of 36 8/28/ :47 PM 177. Normal loss in the manufacturing process leads to. A. reduction in unit price of other good units. B. increase in unit price of other good units. C. reduction in costing profit. D. increase in costing profit Abnormal loss and its value are. A. debited to process a/c. B. credited to process a/c. C. debited to costing profit and loss a/c. D. debited to profit and loss a/c The loss arising out of abnormal reason such as theft, fire etc is called as. A. normal loss. B. abnormal loss. C. seasonal loss. D. standard loss Actual loss is more than the predetermined normal loss, it is. A. normal loss. B. abnormal loss. C. seasonal loss. D. standard loss Actual loss is less than the predetermined normal loss, it is. A. normal loss. B. abnormal loss. C. seasonal loss. D. abnormal gain When output of earlier process is transferred at a profit to the subsequent process, it is. A. inter departmental profit. B. abnormal gain. C. inter process profit. D. manufacturing profit units are introduced in a process in which normal loss is 5% of input. If actual output is 97 then there is. A. no abnormal loss and normal gain. B. 2 units of abnormal gain. C. 3 units of abnormal gain. D. 3 units of normal loss.

27 27 of 36 8/28/ :47 PM units are processed at a cost of Rs. 80, normal loss is 10%, each unit carries a scrap value of 25 paise. If output is 40 units, the value of abnormal loss will be. A. Rs B. Rs C. Rs D. Rs A cost sheet should have. A. only one column. B. two column. C. three column. D. as many column as may be required Classification and accumulation of costs by fixed and variable costs is of special importance in. A. process costing. B. unit costing. C. operation costing. D. operating costing Abnormal process loss can be transferred to. A. costing profit and loss a/c. B. financial profit and loss a/c. C. manufacturing. D. trading Two economically equal importance product are simultaneously produced in the same manufacturing process, these product are. A. joint products. B. by products. C. two process products. D. economic products When two products are simultaneously produced in a process and one of them has comparatively high value and other is of low value, the low value product is called. A. joint products. B. by products. C. seasonal products. D. economic products If any by-product is produced and sold it is credited to. A. profit and loss a/c. B. by-product a/c. C. process a/c.

28 28 of 36 8/28/ :47 PM D. abnormal gain a/c Process cost is ascertained and recorded in. A. balance sheet. B. profit and loss a/c. C. separate statement. D. separate ledger a/c 192. Balance of abnormal gain a/c is transferred to. A. balance sheet. B. debit side of profit and loss a/c. C. credit side of profit and loss a/c. D. costing profit and loss a/c Inter process profits are. A. credited to each process a/c. B. debited to respective process a/c. C. shown only in the finished stock a/c. D. shown in the balance sheet Input is 10,000 units and normal loss is 20% of input and abnormal loss is 400 units. What is actual output? A units. B. 10,000 units. C. 10, 400 units. D units Output is 6400 units and normal loss is 20%. What is actual input? A units. B units. C units. D units Cost of process Rs.1,60,000 and profit to be charged on the transfer price is 20%. What is the inter process profit? A. Rs. 32,000. B. Rs. 40,000. C. Rs. 48,000. D. Rs. 54, Job costing method is the most suitable method for. A. oil process units. B. transport companies. C. sugar industries.

29 29 of 36 8/28/ :47 PM D. repair shops Job cost is estimated on the basis of. A. customers specification. B. production. C. competitors prices. D. government regulations Batch costing is useful to determine. A. maximum quantity of output. B. minimum quantity of output. C. economic batch quantity. D. profit of batches Which method of costing can be used in furniture manufacture industry? A. Job costing. B. Contract costing. C. Process costing. D. Specific order costing Contract costing is most appropriate method of costing for. A. construction industry B. banking industry C.. textile mills D. cement industry Cost of contract and profit or loss thereon are determined by preparing. A. cost sheet. B. profit and loss a/c. C. trading a/c D. separate ledger a/c The basis for the payment of cash by contractee under contract is. A. work certified. B. work uncertified. C. contract cost. D. value of plant used in the contract The basis for determining profit to be taken into account on incomplete contract is. A. cost of contract. B. contract price. C. percentage of work certified as done. D. uncertified work.

30 30 of 36 8/28/ :47 PM 205. The amount paid to sub-contractor is. A. subtracted from the contract price. B. debited to contract a/c. C. credited to contract a/c. D. added with the contract price Work certified is. A. debited to contract a/c. B. credited to contract a/c. C. debited to contractor a/c. D. debited to profit and loss a/c Work uncertified is. A. debited to contract a/c. B. credited to contract a/c. C. debited to contractor a/c. D. debited to profit and loss a/c The amount which is unpaid on work certified is kept as provision. Such provision is called. A. retention money. B. special provision. C. work in progress. D. notional profit In case of complete contract, the whole amount of profit is transferred to. A. contract a/c. B. work in progress a/c. C. profit and loss a/c. D. contractee a/c Process a/c is. A. nominal a/c. B. a real a/c. C. personal a/c. D. either nominal or real a/c Profit to be transferred to profit and loss a/c, if the contract is complete to the extent of only 20% is. A. nil. B. 20%. C. 25%. D. 75%

31 31 of 36 8/28/ :47 PM 212. When the work certified is 25% or more but less than 50% of the contract price, subject to the ratio of cash received to work certified, the amount of profit to be credited to profit and loss a/c is. A. 33.3%. B. 25%. C % D. 20% 213. Contract a/c is. A. a nominal a/c. B. a real a/c. C. a personal a/c. D. either nominal or real a/c Notional profit of a contract is Rs. 60,000, Work certified is Rs. 8,00,000 and contract price is Rs. 10,00,000. What is the amount of profit to be transferred to profit and loss a/c if the 80% of the work certified is paid in cash A. Rs. 24,0000. B. Rs. 30,000. C. Rs. 32,000. D. Rs. 36, Cash received is Rs. 9,00,000, being 90% of work certified. The amount of value of work certified is. A. Rs. 8,10,000. B. Rs. 9,90,000. C. Rs. 10,00,000. D. Rs. 10,81, operating costing is a. A. method of costing. B. technique of costing. C. norm of costing. D. procedure of costing Operating cost is usually ascertained through. A. a ledger account. B. profit and loss a/c. C. balance sheet. D. a statement Various items of costs are classified in operating costing under. A. two major heads. B. three major heads. C. four major heads.

32 32 of 36 8/28/ :47 PM D. five major heads The physical distance covered by a vehicle is measured in terms of. A. ton kilometers. B. passenger kilometers. C. vehicle days. D. running kilometers or miles The cost unit in passenger transport service is. A. mile per hour. B. passenger kilometers. C. kilometer per day. D. cost per hour In goods transport service the cost unit is. A. cost per ton. B. cost per hour. C. cost per ton kilometers. D. cost per vehicle In lodging houses, costs are expressed in terms of. A. room day. B. customer day. C. customer hour. D. cost per month Standing charges are. A. semi variable cost. B. variable cost. C. fixed cost. D. chargeable cost Insurance and garage rent is. A. fixed charges. B. maintenance charges. C. operating charges. D. running charges How many books are maintained, under non integral system of accounting A. Two sets of books. B. Three sets of books. C. Four sets of books. D. Five sets of books.

33 33 of 36 8/28/ :47 PM 226. Under which system of accounting, reconciliation of financial and costing profit is not needed A. Non integral accounting. B. Integral accounting. C. Double accounting. D. Double entry accounting Which of the following item of expenses will not appear in cost accounting A. Direct material cost. B. Factory overheads. C. Selling Expenses. D. Loss on sale of fixed assets Which of the following item of expenses will not appear in financial accounting A. Notional rent. B. Stamp duties. C. Loss on sale of fixed assets. D. Cash discount The term cost refers to. A. the present value of future benefits. B. the value of sacrifice made to acquire goods or services. C. an asset that has given benefit but now expired. D. the price of products sold or services rendered Cost accounting differs from financial accounting in respect of. A. reporting of cost. B. ascertainment of cost. C. control of cost. D. recording of cost Which method of costing is best suited for interior decoration A. Contract accounting. B. Operating costing. C. Process costing. D. Job costing An important feature of a cost centre is. A. it must be one specific location only. B. it has clearly defined boundaries. C. it uses only monetary information. D.. it must be an area of the business through which product pass When cash is received from contractee which a/c should be credited

34 34 of 36 8/28/ :47 PM A. Cash a/c. B. Contract a/c. C. Contractor a/c. D. Contractee a/c Direct labour means. A. labour which can be conveniently associated with aparticular cost unit. B. labour which completes the work manually. C. permanent labour in the production department. D. labour which is recruited directly and not through contractors Which of the following methods of remuneration is most likely to give stability of labour cost to the employer A. Group bonus scheme. B. Measured day rate. C. Premium bonus scheme. D. Straight piece work The type of process loss that should not affect the cost of inventory value is. A. abnormal loss. B. normal loss. C. seasonal loss. D. standard loss The stage where joint products are separated from each other is known as. A. breakeven point. B. angle of incident. C. split off point. D. point of occurrence Fifty units are put in a process at a total cost of Rs.90. Wastage is normally 10% without any scrap value. If output is 40 units the amount of abnormal loss would be. A. Rs. 8. B. Rs. 9. C. Rs. 10. D. Rs If the actual loss is more than the estimated normal loss, then it is. A. abnormal loss. B. normal loss. C. seasonal loss. D. abnormal gain If the actual loss is less than the estimated normal loss, then it is.

35 35 of 36 8/28/ :47 PM A. abnormal loss. B. normal loss. C. seasonal loss. D. abnormal gain Dividend paid is the nature of. A. appropriation of profit. B. financial charges. C. financial income. D. trading expenses Which one of the following is NOT a method of costing A. Marginal costing. B. Process costing. C. Contract costing. D. Job costing Direct material Rs. 25,000 and wages Rs. 15,000 and direct expenses Rs. 5,000. What would be the factory cost if factory overhead rate is 20% A. Rs. 45,000. B. Rs. 50,000. C. Rs. 54,000 D. Rs. 60, Over absorption of overheads in cost accounting results in. A. decrease in costing profit. B. decrease in financial accounts profit. C. increase in costing profit. D. increase in financial accounts profit Overvaluation of opening stock in financial accounting results. A. decreases costing profit. B. decreases financial accounts profit. C. increases costing profit. D. increases financial accounts profit Under absorption of overhead expenses in cost accounting results in. A. decrease in costing profit. B. decrease in financial accounts profit. C. increase in costing profit. D. increase in financial accounts profit Overvaluation of opening stock in financial accounting results in. A. decreases costing profit.

36 36 of 36 8/28/ :47 PM B. decreases financial accounts profit. C. increases costing profit. D. increases financial accounts profit Overvaluation of closing stock in financial accounting results in. A. decreases costing profit. B. decreases financial accounts profit. C. increases costing profit. D. increases financial accounts profit Undervaluation of closing stock in financial accounting results in. A. decreases costing profit. B. decreases financial accounts profit. C. increases costing profit. D. increases financial accounts profit Esclation clause is provided to safeguard the interest of. A. the contractor. B. the contractee. C. both the contractor and contractee. D. the employee. Staff Name JAYASANKAR.S.

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