STARTING FORM LECTURE NUMBER 11
MGT 402
QUIZZS
1: Payroll expense consists upon the following items, EXCEPT:
Labor cost
Administrative staff expenses
Selling and distribution staff expenses
Factory expenses
2: Which of the following element is not taken into consideration for computing total labor
cost of a manufacturing entity?
Direct labor cost
Indirect labor cost
Abnormal loss labor cost
Normal loss labor cost
3: All of the following are examples of indirect labor costs, EXCEPT:
Wages paid to supervisors
Wages paid to assemble line workers
Wages paid to foreman
Wages paid to storekeeper
4: Total amount earned in a week or month by an employee without any deductions is
known as:
Gross pay
Net Pay
Take home pay
After tax income
5: Which of the following is not a valid example of non-statutory deductions?
Income tax
Subscription to trade union
Contribution to pension scheme
Contribution to provident fund
6: Maximum consumption x Maximum Lead Time =?
Re-order level
Maximum stock level
Minimum stock level
Danger stock level
7: Reorder level – (Minimum consumption x minimum Lead time) + EOQ =?
Maximum stock level
Inventory turnover
Minimum stock level
Danger stock level
8: Reorder level – (Average consumption x Average lead time) =?
Minimum stock level
Danger stock level
Inventory turnover
Maximum stock level
9: Average consumption x Emergency lead time =?
Danger stock level
Re-order level
Maximum stock level
Minimum stock level
10: Reorder level – (Minimum consumption x minimum Lead time) + ? = Maximum stock
level
Economic order quantity
Annual required units
Inventory unit cost
Ordering Costs for one order
11: How normal loss is treated in financial accounting?
It is ignored
It is specifically recorded
It is charged to work in in process account
It is recorded in balance sheet
12: How abnormal loss is treated in cost accounting?
It is charged to work in in process account
It is recorded in cash-flow statement
It is ignored
It is specifically recorded
13: Inventory Turnover Ratio = Cost of goods sold ÷?
Average Inventory
Average receivable
Current liability
Total debts
14: Inventory Turnover Ratio = Material consumed ÷?
Average Inventory
Cost of goods sold
Current liability
Total debts
15: Loss by fire is an example of:
Abnormal loss
Normal loss
Prime cost
Conversion cost
7to 8
16: All of the following are advantages of perpetual inventory system except:
It protects materials from theft or loss
It helps in reducing wastages and spoilages
No calculations required
It serves as a moral check
17: All of the following are advantages of periodic inventory system except:
It is very simple
It is very cheap
No technical knowledge required
It serves as a moral check
18: Which of the following is NOT a disadvantage of perpetual inventory system?
It is very sample
It is very cheap
No technical knowledge required
It serves as a moral check
19: Which of the following is NOT a disadvantage of periodic inventory system?
It is very complex
It does not protect materials from theft or loss
It is costly
Complex calculations are required
20: Under perpetual inventory system, which of the following would not be required?
Entry on credit purchase
Entry on credit sales
Entry recorded at the end of period
None of the given options
21: In which of the following method of pricing issues is close to current economic values?
First In First Out
Last In First Out
Weighted average price
Highest in first out price
22: Which of the following formulas can be used to calculate Re-order level?
Maximum Consumption x Lead Time (maximum)
(Minimum consumption x Lead time) + EOQ
Danger level— (Average consumption x lead time)
Average consumption x Emergency time
23: Which of the following formulas can be used to calculate Danger level?
Maximum Consumption x Lead Time (maximum)
(Minimum consumption x Lead time) + EOQ
Re-order level— (Average consumption x lead time)
Average consumption x Emergency time
24: Which of the following formulas can be used to calculate Maximum Stock level?
Maximum Consumption x Lead Time (maximum)
Re-order level - (Minimum consumption x Lead time) + EOQ
Re-order level - (Average consumption x lead time)
Average consumption x Emergency time
25: Which of the following formulas can be used to calculate Minimum Stock level?
Maximum Consumption x Lead Time (maximum)
Re-order level - (Minimum consumption x Lead time) + EOQ
Re-order level - (Average consumption x lead time)
Average consumption x Emergency time
4to 6
26: Direct material cost is Rs. 50,000 and direct labor cost is Rs. 20,000, then what would be
prime cost?
Rs. 20,000
Rs. 30,000
Rs. 50,000
Rs. 70,000
27: Direct material cost is Rs. 50,000 and prime cost is Rs. 80,000, then what would be
direct labor cost?
Rs. 50,000
Rs. 30,000
Rs. 80,000
Rs. 130,000
28: Direct labor cost is Rs. 40,000 and prime cost is Rs. 70,000, then what would be direct
material cost?
Rs. 40,000
Rs30, 000
Rs. 70,000
Rs. 110,000
29: Factory overhead cost is Rs. 40,000 and prime cost is Rs. 70,000, then what would be
total factory cost?
Rs. 40,000
Rs30, 000
Rs. 70,000
Rs. 110,000
30: Total factory cost is Rs. 100,000 and prime cost is Rs. 70,000, then what would be
factory overhead cost?
Rs. 40,000
Rs. 30,000
Rs. 70,000
Rs. 100,000
31: Net profit is Rs. 50,000 and Sales is Rs. 500,000, then what would be Net Profit Ratio;
10%
15%
100%
110%
32: Net profit is Rs. 60,000 and Net Profit Ratio is 15%, then what would be Sales;
Rs. 9,000
Rs. 40,000
Rs. 40,000
Rs. 900,000
33: Sales is Rs. 600,000 and Net Profit Ratio is 10%, then what would be Net Profit;
Rs. 50,000
Rs. 55,000
Rs. 60,000
Rs. 66,000
34: Net Profit ratio is calculated by;
(Gross Profit/Gross sales) x 100
(Gross Profit/Net sales) x 100
(Net Profit/Net sales) x 100
(Net Sales/Net profit) x 100
35: Cost of goods sold is Rs. 250,000 and Average inventory is Rs. 50,000, then what would
be Inventory Turnover Ratio;
0.5 times
0.55 times
5.0 times
5.5 times
36: Which of the following best defines the cost that is fully traceable in the cost of
product?
Direct Material Cost
Indirect Material Cost
Office Supplies Cost
Shipping Supplies Cost
37: Which of the following best defines the cost that is incurred in producing product but
cannot be fully traceable in the cost unit?
Direct Material Cost
Indirect Material Cost
Direct Labor Cost
Prime Cost
38: Which of the following best defines the cost that is related to items or goods which are
used in office for administrative purposes?
Direct Material Cost
Direct Labor Cost
Office Supplies Cost
Shipping Supplies Cost
39: Which of the following best defines the cost that is related to packaging of the finished
product?
Direct Material Cost
Direct Labor Cost
Office Supplies Cost
Shipping Supplies Cost
40: Cost incurred on stationery items is an example of:
Direct Material Cost
Direct Labor Cost
Office Supplies Cost
Shipping Supplies Cost
41: There are basically two systems of remunerating the labor, one is rated to TIME and
other is related to:
Age
Designation
Number of responsibilities
Quantum of work
42: If labor is satisfied with high wages, which of the following statement is true w.r.t.
productivity and per unit overhead cost respectively?
Increase, Increase
Increase, Decrease
Increase, Decrease
Decrease, Decrease
43: Amount paid to an employee based upon his or her performance is called as:
Wages
Salary
Overtime
Commission
44: A system where an employee is allowed to work extra hours earlier in the week or
month, in return for which he will work fewer hours later on is called as:
Flex time
Rigid time
Overtime
Budgeted time
45: Following are some important features of a suitable incentive plan, EXCEPT:
Plan should be acceptable to all workers
Scheme should motivate the employees towards management objectives
Scheme should enhanced the workers grievances towards work
Scheme should operate without excessive cost
46: Determine per piece rate when standard time required to manufacture per piece is 30
minutes and normal rate per hour is Rs. 0.90.
Rs. 0.45
Rs. 27.00
Rs. 29.10
Rs. 29.10
47: According to Taylor Differential method, the standard time allowed for per piece
production is 10 minutes and normal rate per hour is Rs 62.50, so what will be the standard
production per hour?
6 pieces
8 pieces
10 pieces
Required more information to compute units
48: According to Taylor Differential Piece method, the standard time allowed for per piece
production is 10 minutes and normal rate per hour is Rs 62.50 for 8 hours job so what will
be the standard production per day?
48 pieces
6 pieces
10 pieces
Required more information to compute units
49: Determine per piece rate when standard time required to manufacture per piece is 30
minutes and normal rate per hour is Rs. 0.80.
Rs. 0.40
Rs. 24.00
Rs. 29.10
Rs. 0.80
50: According to Taylor Differential method, the standard time allowed for per piece
production is 30 minutes and normal rate per hour is Rs 62.50, so what will be the standard
production per hour?
2 pieces
8 pieces
30 pieces
Required more information to compute units
51: According to Separation method; Labor turnover can be calculated as = ?
(Number of separations in a period) Divided by (Average number of workers in a period)}
x 100
[(Number of separations + number of replacement) Divided by Average number of workers
during the period] x 100
Number of workers replaced during the period Divided by Average number of workers during
the period
(Number of workers at the beginning of the period + Number of workers at the end of that
period) Divided by 2
52: According to Flux method; Labor turnover can be calculated as =?
[(Number of separations + number of replacement) Divided by Average number of
workers during the period] x 100
(Number of separations in a period Divided by Average number of workers in a period) x 100
Number of workers replaced during the period Divided by Average number of workers during
the period
(Number of workers at the beginning of the period + Number of workers at the end of that
period) Divided by 2
53: (Number of workers at the beginning of the period + Number of workers at the end of
that period) Divided by 2
54: According to Replacement method; Labor turnover can be calculated as =?
Number of workers replaced during the period Divided by Average number of workers
during the period
(Number of separations in a period Divided by Average number of workers in a period) x 100
[(Number of separations + number of replacement) Divided by Average number of workers
during the period] x 100
(Number of workers at the beginning of the period + Number of workers at the end of that
period) Divided by 2
55: Calculate labor turnover under separation method if number of workers on 1st June
and 30th June were 1,000 and 2,000 respectively. Numbers of workers discharged or left
during the month were 90.
6%
3%
9%
More information is required for computation
56: Calculate labor turnover under replacement method if number of workers on 1st June
and 30th June are 1,000 and 2,000 respectively. Number of workers discharged or left
during the month was 90 and replaced workers were 40.
6%
3%
9%
More information is required for computation
57: All of the following can be used as a base of FOH absorption rate EXCEPT:
Machine hours
Depreciation of building
Direct labor cost
Prime cost
58: Apportionment and allocation of Factory overhead cost can be:
Reciprocal only
Non Reciprocal only
Both Reciprocal and Non Reciprocal
None of the given options
59: Main method(s) which may be used for reciprocal distribution:
Both Repeated allocation method and Algebraic method
Algebraic method only
Repeated allocation method only
None of the given options
60: What is the suitable base for apportionment of bonus amount from the following
options?
Cost of labor
Average workers employed
Machine hours
Labor wage
61: Repeated allocation method is used for:
Reciprocal distribution.
Algebraic method.
Non-reciprocal distribution.
Binomial distribution
62: (Estimated factory overhead cost) divided by (Base for FOH absorption rate) =?
Applied factory overhead
Sunk Cost
Variance
FOH absorption rate
63: Applied FOH cost - Estimated FOH cost =?
Volume Variance
FOH absorption rate
Budgeted Variance
Variable rate
64: Applied FOH cost - ? = Volume Variance
Estimated FOH cost
Prime cost
Conversion cost
Actual FOH cost
65: Fixed overhead rate + variable overhead rate =?
Actual FOH cost
Prime cost
Estimated FOH cost
FOH absorption rate
66: Identify FOH absorption rate based on direct material if direct material direct labor
and factory overhead cost are Rs.2, 000,000, Rs.1, 2000,000 and Rs.8, 000,000
respectively.
25 %
16.67 %
66.67 %
400 %
67: High and low activity level of machine is 9,000 and 3,000 hours with budgeted factory
overhead for high activity and low activity is of Rs. 80,000 and Rs. 50,000 respectively.
Required: Compute variable rate per unit with the help of given information.
Rs 10.83 per machine hour
Rs 16.67 per machine hour
Rs 8.89 per machine hour
Rs 5 per machine hour
68: High and low activity level of machine is 9,000 and 3,000 hours with budgeted factory
overhead for high activity and low activity is of Rs. 80,000 and Rs. 50,000 respectively.
Required: Compute variable factory overhead cost at low activity level.
Rs. 400,000
Rs. 150,000
Rs. 45,000
Rs. 15,000
69: High and low activity level of machine is 9,000 and 3,000 hours with budgeted factory
overhead for high activity and low activity is of Rs. 80,000 and Rs. 50,000 respectively.
Required: Compute variable factory overhead cost at high activity level.
Rs. 15,000
Rs. 45,000
Rs. 150,000
Rs. 400,000
70: High and low activity level of machine is 9,000 and 3,000 hours with budgeted factory
overhead for high activity and low activity is of Rs. 80,000 and Rs. 50,000 respectively.
Required: Compute fixed factory overhead cost.
Rs. 15,000
Rs. 35,000
Rs. 150,000
Rs. 400,000
71: Estimated FOH cost - ? = Budgeted Variance
Conversion cost
Actual FOH cost
Prime cost
Applied FOH cost
72: Which of the following best defines Prime Cost?
Direct Material + Direct Labor + Other direct production cost
Direct Labor + Other direct production cost
Direct Labor + Other direct production cost + Factory Overhead Cost
Direct Material + Other direct production cost
73: Which of the following best defines Total Production Cost?
Direct Material + Direct Labor + Other direct production cost
Direct Labor + Other direct production cost
Prime Cost + Factory Overhead Cost
Conversion Cost + Factory Overhead Cost
74: Which of the following best defines Conversion Cost?
Direct Labor Cost + Other direct production cost
Prime Cost + Factory Overhead Cost
Direct Labor Cost + Factory Overhead Cost
Direct Material Cost + Factory Overhead Cost
75: Depreciation on straight line method is an example of;
Fixed Cost
Step Fixed Cost
Variable Cost
Semi Variable Cost
76: Utility bill is an example of;
Fixed Cost
Step Fixed Cost
Variable Cost
Semi Variable Cost
77: The value of a benefit that is sacrificed in favor of an alternative is known as;
Sunk Cost
Opportunity Cost
Period Cost
Historical Cost
78: Period cost is charged to profit & loss account. This cost belongs to which of the
following;
Inventory Costs
Product Costs
Non-Manufacturing Costs
Manufacturing Costs
79: Machinery was purchased for Rs. 600,000 but now its market value is Rs. 800,000.
Which of the following represents its historical cost?
Rs. 200,000
Rs. 600,000
Rs. 800,000
Rs. 1,400,000
80: Which of the following is an example of implicit cost for a firm?
The cost of worker wages and salaries for the firm
The cost paid for leasing a building for the firm
The cost paid for production supplies for the firm
The cost of wages foregone by the owner of the firm
81: Which of the following costs is not a period cost?
Advertising cost
Sales commission
Interest cost
Direct labor
82: Which of the following is also known as Statement of Financial Position?
Balance Sheet
Income Statement
Cash flow Statement
Equity Statement
83: Which of the following statement gives information about inflows and outflows of cash
and cash equivalent?
Balance Sheet
Income Statement
Cash flow Statement
Equity Statement
84: Which of the following is an element of Balance Sheet?
Income
Expenses
Assets
Accounting policies
85: Which of the following is a part of Income Statement?
Equity
Expenses
Assets
Accounting policies
86: Which of the following is included in Notes to the account?
Equity
Expenses
Assets
Accounting policies
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