Académique Documents
Professionnel Documents
Culture Documents
The wage costs which are incurred in converting materials into finished
goods would be known as:
4. When costing takes into account only the variable cost and not the full
production cost we will be using:
Debit Credit
A Abnormal loss account Process account
B Abnormal loss account Cashbook
C Profit & Loss account Cashbook
D Process account abnormal loss account
Your Answer: A
11. The total of all direct costs of production is also known as:
13. The best way of allocating fixed overheads between products is:
15. Wages for staff maintaining machines in factory would be classed as:
18. A minor product produced at the same time as the main product may
be known as a:
19. When deciding to accept a special order at below the normal selling
price a firm would consider which cost?
21. Which of the following would not normally be included in the prime
cost of production?
22. Which of the following costs has no relationship with the level of
output?
25. The correct treatment of an amount paid per item produced to the
owner of a patent would be to include it in which of the following?
26. When using Activity Based Costing, a cost centre would be normally be
known as a:
28. A cost which is connected with production but does not vary directly
with the level of output may be known as:
Direct labour
Indirect labour
Contribution costing
Marginal costing
Full costing
Marginal costing
Price discrimination
Price skimming
Predatory pricing
Profit centre
Cost unit
Cost centre
Repairs to factory machinery would be
classed as:
Direct expenses
Administration expenses
Direct materials
C
D
Cost pool
Cost centre
Overhead centre
Production costs
Variable cost
Total cost
Direct materials
Direct overheads
Work in progress
Direct materials
Direct labour
Administration expenses
Direct labour
Administration expenses
Indirect expenses
Supplementary product
Joint product
Scrap
Full cost
Overhead cost
Marginal cost
Which of the following would not appear as a
factory overhead?
Power for machines
Salaries.
Direct expenses.
Variable costs.
Semi-variable costs.
direct materials.
direct expenses.
full costing.
contribution costing.
Indirect expenses.
Distribution expenses.
Direct expenses.
profit centre.
cost unit.
cost pool.
Which of the following would not normally be
classed as an administration expense?
Depreciation of office photocopier.
Secretarial wages.
Office heating.
direct cost.
Your Answer: cost centre with the direct labour and materials
costs relating to the cost centre
Correct Answer: cost centre with the overhead costs resulting solely
from the existence of the cost centre
cash management
product costing
risk management
treasury management
controllability concept
interdependency concept
cost centre with the direct labour and materials costs relating to the cost
centre
cost centre with the overhead costs resulting solely from the existence of
the cost centre
product with the direct labour costs relating to the product
product with the direct labour and materials costs relating to the product
area
number of products
number of employees
variable costs
total costs
2-To calculate the probable cost of the product, knowledge of following factors involves
(A) Production time required
(B) Costing
(C) Mines
(B) Operating
(C) Unit
(D) Batch
(C) coolant
(B) Octroi
(D) Insurance
(B) Supervisor
(C) Inspector
(D) Sweeper
(B) Welder
(C) Moulder
(D) Turner
Answers:
1-(D), 2-(D), 3-(A), 4-(C), 5-(B), 6-(D), 7-(B), 8-(C), 9-(D), 10-(A), 11-(A), 12-(A), 13-(A), 14-
(C), 15-(D)
16-The following is(are) the overhead cost(s)
(A) Factory expenses
17-All such expenses which are incurred for creating and enhancing the demands for the
products are
(A) Selling expenses
18-Prime cost=
(A) cost of direct labour + cost of direct material + direct expenses
19-Factory Cost =
(A) Prime cost + factory expenses
20-Manufacturing cost=
(A) Factory cost + selling cost
(B) Factory cost + distribution cost
24-The following method is an improvement over the percentage on direct labour cost
method.
(A) Machine hour rate
25-This method is useful where the products are manufactured by manual operations.
(A) Percentage on prime cost
(B) Percentage on direct material cost
27- Labour cost per product is Rs. 2/hr and time taken by each product is 2 hr. The factory
overhead is 20% of the labour costs. The factory cost for 100 products if material cost per
product is Rs. 3, is.
(A) Rs. 700
(B) Overheads
Answers:
16-(D), 17-(A), 18-(A), 19-(A), 20-(C), 21-(D), 22-(B), 23-(C), 24-(D), 25-(C), 26-(A), 27-(C),
28-(D), 29-(C), 30-(D)
MCQs 1 To 10
MCQs 11 To 20
11. Prepaid interest given in the adjusted trial balance will be treated as a (an)?
(a) Asset
(b) Liability
(c) Revenue
(d) Deferred expense
12. Which of the following is the largest single expense of most merchandising firms?
(a) Cost of goods sold
(b) Rent Expense
(c) Amortization Expense
(d) Salaries Expense
13. The primary source of revenue for a wholesaler is?
(a) Investment income
(b) Service fees
(c) The sale of merchandise
(d) The sale of fixed assets the company owns
14. Retained earnings will change over time because of several factors. Which of the
following factors would explain a decrease in retained earnings?
(a) Net loss
(b) Net income
(c) Dividends
(d) Investments by stock holders
15. A Profit is earned if?
(a) Assets exceed Expenditure
(b) Income exceeds Expenditure
(c) Cash Inflow exceeds Cash Outflow
(d) Income exceeds Liabilities
16. What is the difference between the total incoming and the total outgoings?
(a) Net cash flow
(b) Cash inflow
(c) Direct cost
(d) Indirect cost
17. Which of the following is true regarding the income statement?
(a) The income statement is sometimes called the statement of operations
(b) The income statement reports revenues, expenses, and liabilities
(c) The income statement reports only revenue at the point of sale
(d) It shows financial position of a business at a particular period of time
18. Presents the revenue earned and expenses are incurred by an entity during a
specific time period?
(a) Income statement
(b) Statement of owner equity
(c) Balance sheet
(d) None of them
19. The format of the balance sheet reflects which of the following?
(a) The basic accounting equation
(b) Worksheet
(c) Statement of Owner Equity
(d) Income statement
20. How is the balance sheet linked to the other financial statements?
(a) The beginning retained earnings balance on the statement of retained earnings becomes the
amount of retained earnings reported on the balance sheet
(b) Retained earnings is added to total assets and reported on the balance sheet
(c) Net income increases retained earnings on the statement of retained earnings, which ultimately
increases retained earnings on the balance sheet
(d) There is no link between the balance sheet and the other statements