Ma

SCDL – Management Accounting

PGDBA – I Semester

Select The Blank Question The costs incurred for recruitment and training of new workers and the resulting losses wastages and reduced productivity due to the inefficiency and inexperience of new workers is referred to as the _______. Correct Answer Replacement costs Question The ideal standards are generally ________ in nature and the variances always shows _______ trends Correct Answer theoretical Correct Answer unfavorable Question In process of establishing the standards, the following steps are involved Correct Answer Study of technical details , Study of existing costing system , Decision about types of standards to be used. Question The cost that tends to remain constant irrespective of the level of activity is called Correct Answer fixed cost Question A business is an activity carried out with the intention of earning the profit. Correct Answer True Question Cost Accounting restrict itself with historical transactions Correct Answer False Question These are the methods of measuring labour turnover. Correct Answer Replacement Method , Separation Method , Flux Method Question Valuation of returns indicates the material returned by store department to production department Correct Answer False Question In case of industries where capital investment is very high, budget should be prepared for a Correct Answer Longer period Question ________ and ________ are examples of semi- variable overheads. Correct Answer Maintenance cost Correct Answer electricity Question Balance sheet indicates the financial status of the business at given period. Correct Answer True Question __________ Accounting is primarily protects the interest of the outsiders dealing with the organization various capacities like investors, suppliers, customers etc. Correct Answer Financial

Collected by Santosh. K

Page 1 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question Purchased computers of Rs. 50,000 come under the heading of fixed asset Correct Answer True Question In Cash budget , Non operating cash inflow includes Correct Answer Receipt of loan/borrowings , Issue of shares , Sale of fixed assets Question Goods distributed as free sample amounted to Rs. 10,000. Prepare Neonboard Rs. 5000. The total amount transfer to advertisement account is Rs.____ Correct Answer 15,000 Question Convention of Materiality __________________ Correct Answer Only those transactions will be considered which have material impact on profitability , Insignificant transaction will be ignored , The cost of non-used should not be considered as the item of cost Question Selling price per tonne is Rs. 69.50 , variable cost per tonne is Rs. 35.50 and fixed cost is Rs. 18,02000. Find out the BEP in units, Correct Answer 53000 Question The opening balance of cash account is Rs. 25,000, cash received from debtors Rs. 30,000, sold goods amounted to Rs. 50,000, paid to creditors Rs. 20,000, purchase furniture Rs. 5000. What is the clos Correct Answer 80,000 Question It is the cost of opportunity foregone. Correct Answer Opportunity Cost Question Under Gannt Task bonus system where the output is ________ payment is made as per minimum time rate, output is ________ payment is made as per time wages plus some increase in wage rates Correct Answer below standard Correct Answer at standard Question Standard costing may not be useful for forecasting purposes Correct Answer True Question Factory overheads, administration overheads , selling and ________ overheads are the form of ________ classification of overheads Correct Answer distribution Correct Answer function wise Question Amit sold Goods to Atul for Rs. 50,000 on cash & Rs. 50,000 on credit basis & allowed 10% discount on on the spot transaction. Cash Account debited to Rs. _____________ Correct Answer 45,000

Collected by Santosh. K

Page 2 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question A key factor is defined as the factor which, at a particular point of time or over a period will ________ the volume of ________ Correct Answer limit Correct Answer output Question Accounting is an art of recording, classifying & summarizing in a significant manner. Correct Answer True Question Fixed cost is the cost that tend to remain ________ irrespective of ________ Correct Answer constant Correct Answer level of activity Question The bank pass book or the bank statement is the extract of the account in the name of the business as it appears in the books the business. Correct Answer False Question Sales Budget is a forecast expressed in ________ and ________ terms. Correct Answer quantity Correct Answer Money Question Due to compensating errors the arithmetical accuracy of the trial balance get affected. Correct Answer False Question The process of ________ can followed to decide the ________ of overheads to each budget center Correct Answer Allocation & apportionment Correct Answer Loading Question LAST IN FIRST OUT (LIFO) Correct Answer The price of the latest available lot is considered first , If that lot is exhausted, the price of the 10% prior to that is considered , Physical issue of the material may not be made out of the said lot Question Standard Costs are used as tool for Correct Answer Cost Control Question Variable costs are the controllable costs at the ________ level of the management whereas fixed costs can be controlled only on the ________ level of the management Correct Answer Lower Correct Answer Top Question Along with financial accounting, ________ and ________ are the other streams of accounting Correct Answer Cost Accounting Correct Answer Management Accounting

Collected by Santosh. K

Page 3 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question Bin Card Includes Correct Answer Entries in receipt column on basis of goods received note or material returned note , Entries in issue column on basis of material requisition note , The balance quantity is calculated and recorded Question classification of the overheads as fixed and variable ,facilitates the preparation of flexible budgets. Correct Answer True Question Under Merrick Differential Piece rate System of wage payment up to 83% of efficiency following rate is offered. Correct Answer Normal Question The following factors affects the budgeted advertisement cost Correct Answer Percentage of profits , Availability of funds , Competitors policy Question A bank reconciliation statement is prepared on a particular date. Correct Answer True Question Profit & Loss Account shows Gross Profit 13,000. Expenses incurred as Telephone charges 1500, Traveling expenses 3000, Salary paid 2000, discount allowed 500, depreciation 200. Calculate the net profi Correct Answer 5800 Question Balance sheet liability side includes Correct Answer Loan & advances , Outstanding expenses , Creditors Question ________ and ________ are non monetary incentives Correct Answer Safety services Correct Answer education facility Question Accounting period Concept________________ Correct Answer Longer life-span on business is divided into shorter segments , Each one being in the form of accounting period , Selection of accounting period may depend on various factors Question Bank reconciliation statement is the statement prepared to explain the reasons as to why the bank balance as per pass book and bank balance as per bank book does not match. Correct Answer True Question These are the replacement costs of labour turnover. Correct Answer cost of personnel administration , cost of selection and placement , increased spoilage and defectives Question These are the replacement costs of labour turnover. Correct Answer Inefficiency of new workers , Cost of selection and placement , Increased spoilage and defectives

Collected by Santosh. K

Page 4 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question Depreciation Correct Answer Amount charged on Fixed Assets. Question The sales day book of October 1991 was overcast by Rs. 10,000, which A/C to be debited. Correct Answer Sales A/C Question The cost accountancy is defined as “ the application of costing principles,methods and techniques to the ________, art and practice of ________ ascertainment of the profitability and the presenta Correct Answer science Correct Answer cost control Question A Co. having net sales Rs. 7,50,000, opening stock 1,14,375, purchases, 483,375 closing stock 1,47,750. Calculate the Gross Profit Correct Answer 3,00,000 Question Standard Costing system facilitates ________ and ________ for each individual or department Correct Answer Delegation of authority Correct Answer Fixation of responsibility Question Creditor Correct Answer Supplier Question The overhead is aggregate of Correct Answer Indirect labour cost , Indirect material cost , Indirect Expenses Question The wage payment system should take into consideration the external obligations such as the Minimum wages Act and the agreement entered into by the organization with the workers. Correct Answer True Question Bank Reconciliation statement is required in case of Correct Answer difference between the bank balance as per the bank book and as per pass book Question Trial balance is drawn on a particular date Correct Answer True Question Tallying of trial balance is conclusive evidence of the total accuracy of the books of account. Correct Answer False Question A very wide scope of Management Accounting is the limitation by itself. Correct Answer True Question

Sundry creditors transfer to asset side.

Collected by Santosh. K

Page 5 of 97

SCDL – Management Accounting Correct Answer

PGDBA – I Semester

False

Question ___________ Accounting is the process of classifying and recording of the expenditure in a systematic manner with the intention of ascertaining the cost of cost centre with the intention of controllin Correct Answer Cost Question This is one of the avoidable cause of labour turnover. Correct Answer Relationship with supervisors and workers Question Non-Operating / Financial Incomes are deducted from operating profit while calculating Net profit. Correct Answer False Question Semi ________ overheads are neither ________ nor variable in nature. Correct Answer fixed Correct Answer variable Question Standard Costing specifically relates to the function of Correct Answer Production Question Balance sheet indicates the expenditure & income from the business. Correct Answer False Question Credit note is an intimation send to person dealing with the business that his account being debited for the purpose indicated therein. Correct Answer False Question Debtors Correct Answer Who owes money to the business Question Fixed assets do not give the returns during the same period during which they are paid for Correct Answer True Question These are the special type of cost Correct Answer Opportunity cost , Differential cost , Sunk cost Question Discount received from the Creditors has been entered in the Creditors A/C but discount amount has not been credited, for rectifying such error which account to be debited. Correct Answer Suspense A/C Question Under this method of time keeping , each worker is allotted an identification number and a disc or token bearing that number. Correct Answer Token or Disc Method

Collected by Santosh. K

Page 6 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question Under marginal costing semi variable costs are also classified in their individual components of fixed cost and variable cost. Correct Answer True Question Labour Rate Variance occurs due to Correct Answer Change in wage structure , Use of different methods of payment , Wage difference Question Break even point is a situation of no ________ no ________ Correct Answer profit Correct Answer loss Question It is an appropriate basis of apportionment of depreciation expenditure Correct Answer value of assets Question Wage rate standards takes into consideration the following factors Correct Answer The system of wage payments , System for bonus payment , Grades of workers required Question Replacement costs refer to all costs incurred for recruitment and training of new workers. Correct Answer True Question While selecting source of supply ________ epartment may call for the ________ from the prospective suppliers Correct Answer purchase Correct Answer quotation Question P/L A/C debit side includes Correct Answer salary , discount allowed , postage & telegram Question Ifidle time payment is abnormal , it should be classified as overheads. Correct Answer False Question Bank reconciliation statement is the statement prepared to explain the ________ as to why the bank balance as per ________ and bank balance as per bank book does not match Correct Answer reasons Correct Answer pass book Question Accounting to the matching principles of accounting, the ________ incurred during an accounting period are required to be match with ________ during that period Correct Answer cost Correct Answer revenues Question Expenditure like general lighting are apportioned considering ________ as a base and expenditure like depreciation are apportioned considering ________ as a base. Correct Answer number of light points Correct Answer value of assets

Collected by Santosh. K

Page 7 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question Planning lays down the course of action to be taken in future. In case budgetary control, it is in the form of the ________ and in case of ________ costing, it is in the form of the standard cost Correct Answer standard Correct Answer budgets Question Following are various forms of limiting factor Correct Answer market , labour , machine availability Question These are normal bases for primary apportionment of overheads. Correct Answer value of assets , HP/KWh , number of light points Question Due to errors of principle the arithmetical accuracy of the trial balance does not get affected. Correct Answer True Question The situation of over absorption arises if the overheads absorbed are less than the actual overheads. Correct Answer False Question Depreciation can be defined as a permanent , continuous and gradual reduction in the book value of a fixed assets. Correct Answer True Question Balance sheet asset side includes Correct Answer Furniture , Vehicle , Land & building Question In case of the under or over absorption of the overheads arising out of the normal circumstances , they are written off to costing profit and loss account. Correct Answer False Question Due to errors of principle the arithmetical accuracy of the trial balance get affected. Correct Answer False Question Trading a/c credit side includes Correct Answer sales , goods lost by fire , closing stock Question variable cost is the cost that tend to ________ in direct proportion with ________ Correct Answer vary Correct Answer level of activity Question Preliminaries for establishing Standard costing system includes Correct Answer Establishment of cost centers , Design of accounts , Establishment of standards Question Bank of Maharashtra A/C is a personal A/C Correct Answer True

Collected by Santosh. K

Page 8 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question Adverse labour time variance may be due to Correct Answer Poor grade of labour , Defective plant & machinery , Poor quality of material Question This is the best example of element wise classification of cost. Correct Answer material Question Highest in first out Correct Answer This method assumes that the stock should always be shown at the minimum value Question Standard price creates complications in accounting system and increase clerical work. Correct Answer False Question Limitations of Management Accounting includes------------------Correct Answer Its wide scope , Possibility of intuitive decision , Requires elaborate organizational structure Question Trade Discount Correct Answer Amount received on purchases Question In a Balance-Sheet right hand side is a Asset side & left hand side is liability side Correct Answer True Question The stages of cost control involves Correct Answer To plan the operation , Execute the plan & measuring the actual performance , Computing the variations between planned & actual performance Question __________ Accounting becomes a source of information for Management Accounting. Correct Answer Financial Question The levels indicated on the Bin card enables the ________ department to keep a watch on the balance and replace the material as soon as it reached at ________ level. Correct Answer Stores Correct Answer Re-order level Question Under Merrick Differential Piece rate System of wage payment above 100 % of efficiency following rate is offered. Correct Answer 130% of normal piece rate Question This is an example of semi variable overheads. Correct Answer electricity Question Following error affect the trial balance Correct Answer Wrong totaling of subsidiary books , Posting on the wrong side of an account , Omission of posting an account in the ledger

Collected by Santosh. K

Page 9 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question A Budget center may be in the form of Correct Answer A product , A department , A branch of the company Question Under absorption of overheads may take place due to the reasons like ________ overheads being more than the ________ overheads Correct Answer actual Correct Answer estimated Question If ________ is not provided, the asset may appear in the Balance Sheet at an ________ amount Correct Answer depreciation Correct Answer overstated Question Preventive costs of labour turnover refers to all the costs which may be incurred by the organisation to keep workers happy and ________ them from ________ the job Correct Answer discourage Correct Answer leaving Question Replacement costs of labour turnover are ________ and ________ Correct Answer training Correct Answer breakages of machine Question When the balance in the ledger account of the previous year are entered the current year’s books, the balances are said to be bought forward. Correct Answer True Question Sales at 1,00,000 units are Rs. 1,00,000 , variable costs Rs. 40,000 and fixed cots is Rs.50,000. What is Break even point ? Correct Answer Rs. 83,333 Question The material physically received is compared with material ordered as per the this order Correct Answer Purchase order Question Interest Received amounted to Rs. 10,000/- is to be transfer to ___ Correct Answer Profit & Loss A/C credit side Rs. 10,000 Question Under the daily ________ sheets method, each worker is provided with a daily time sheet on which time ________ by him on various jobs is expected to be mentioned Correct Answer Time Correct Answer Spent Question Material Price Variance may occur due to Correct Answer Change in price of material , Failure to take discounts , Weak purchase organization

Collected by Santosh. K

Page 10 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question Selling and distribution overheads includes Correct Answer Indirect Material such as packing material, samples etc., , Indirect labour like salaries to sales personnel manager , Indirect expenses like warehouse charges, advertisement Question Idle time is the time required to complete particular job. Correct Answer False Question All items which do not involve cash flow will be considered for while preparing Cash Budget. Correct Answer False Question The quantitative record of receipts, issues and closing balance of an item of material is called Bin-Card. Correct Answer True Question The amount of money that is paid for is classified as ________ and ________ for the purpose of accounting Correct Answer Capital Expenditure Correct Answer Revenue Expenditure Question The material physically received compared with material order as per the purchase order may reveal the following forms of discrepancies Correct Answer Quantity received in excess , Quantity received in short , Quantity received of different quality Question Book keeping is clerical while accounting is managerial Correct Answer True Question ________ Legal charges and ________ are the accounts which are shown on the debit side of Profit & Loss Account Correct Answer Like office rent, Correct Answer Audit fees Question Cash received from credit sales, Cash account to be credited. Correct Answer False Question The prime cost is Rs. 10,00,000 the factory cost is Rs. 13,00,000, the total administration overheads are 14,00,000 and having selling overhead of Rs. 86000. What is the Total cost? Correct Answer 37,86,000 Question Cost Accountancy is a science, art and practice of a cost Accountant. Correct Answer Science indicates the possession and the application of relevant systematic knowledge. , Art indicates the skill and ability. , Practice indicates continuous effects on the part of cost accountant. Question

Under stocking may have following consequences

Collected by Santosh. K

Page 11 of 97

SCDL – Management Accounting

PGDBA – I Semester

Correct Answer Payment for idle time to workers , Production hold ups resulting into disturbed delivery schedule , Eleventh hour purchase Question Per unit cost of variable overheads may reduce as the volume of output increases but the total overheads remain constant. Correct Answer False Question A properly laid down system of Standard Costing helps in implementation of Correct Answer Budgetary Control Question Store ledger Correct Answer Record of all receipts and issue transactions , Financial expressions of all transactions , Maintenance of Store ledges provides a second check Question It is necessary to ignore key factors while taking decision by marginal costing technique. Correct Answer False Question The process of accounting split into three steams i.e. financial, cost, management accounting. Correct Answer True Question Financial statements are basically in two forms i.e. profitability statement and balance sheet. Correct Answer True Question Financial Accounting discloses the financial performance & financial statements of the business as a whole. Correct Answer True Question Management Accounting is the process of analysis and interpretation of financial data collected with help of financial accounting and cost accounting Correct Answer True Question According to Reducing Balance Method, the depreciation is provided at a predetermined percentage on the balance of cost of asset after deduction of the depreciation previously charged. Correct Answer True Question Discount received from the creditor has been entered in the creditor's account but discount has not been credited; what type of error is this ________ Correct Answer Omission of posting an amount in the ledger Question Goods purchased from A for Rs.2,020/- were passed through the sales book. The rectification of this error will result in ________ Correct Answer decrease in gross profit by Rs.2,020/Question

The variable costs are controllable at the lower lever.

Collected by Santosh. K

Page 12 of 97

SCDL – Management Accounting Correct Answer

PGDBA – I Semester

True

Question A person in charge of a ________ may be held responsible for its proper functioning and cost control. Correct Answer Cost centre Question The cost that indicates historical cost, which is incurred in past, is known as Correct Answer Sunk cost Question The process of recording the costs in a formal and systematic manner with the intention of preparing statistical data there from a ascertain the cost, is known as . . . Correct Answer Cost accounting Question Which of the following transactions should be excluded while preparing a cost sheet ? Correct Answer Interest on loan , Bad debts , Expenses on criminal law suit Question Examples of indirect material are Correct Answer Consumable stores , Glue used in book binding , Nails used in packing boxes Question The process of attributing proportions of items of costs amongst const centres is called ________. Correct Answer Cost apportionment Question Contents of Uniform Cost Manual are Correct Answer Organization , Cost Accounting system , Presentation of information Question It is said that adoption of uniform costing creates customer confidence because . . . Correct Answer Prices are reliable Question Uniform costing system is a pre-requisite to an inter-firm comparison of firms belonging to the different industries. Correct Answer False Question The ________ ledger carries the individual accounts, whereas the general ledger records the consolidated effect of the individual transactions. Correct Answer Control Question Out of debtors totaling to Rs.58,750/-, Rs.5,000/- were expected to be bad. What should be the amount of debtors that must be disclosed in the balance sheet? Correct Answer Rs.53,750/Question Flood occurred on 18th March, 2004 and goods worth Rs.28,000/- were destroyed. The insurance company accepted on 28th March, 2004 the claim for Rs.10,000/- only. The claim amount was received on 2nd April, 2004. Find the impact of this transaction on net profit for the year ending 31st March, 2004. Correct Answer The net profit will decrease by Rs.18,000/-

Collected by Santosh. K

Page 13 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question Annual sales were Rs.10,50,000/- and sales returned by customers amounted to Rs.28,000/-. The salesmen are entitled to an incentive of 3% of net sales. Calculate the amount of incentive due to the salesmen. Correct Answer Rs.30,660/Question Depreciation on assets is credited to the trading account. Correct Answer False Question Balance sheet is considered to be a part of the financial statements. Correct Answer True Question Long term loan borrowed from financial institution comes under the heading of long term liabilities. Correct Answer True Question The balance as per bank book as on 30th November, 2004 was Rs.6,500/- and the bank pass book balance as on the same date was Rs.8,015/-. Select the transactions representing the reasons for this difference. Correct Answer Cheques deposited but not cleared Rs.1,200/- , Unpresented cheques Rs.2,625/- , Bank interest not entered in the bank book Rs.90/Question Collection charges of Rs.4/- on a cheque received from Calcutta should be ________ in the bank book. Correct Answer Credited Question A materials requisition form normally contains the following aspects: Correct Answer Quantity requisitioned , Per unit material cost , Job number Question A complete list of all material required, with quantities, for a particular job is given in the ________. Correct Answer Bill of material Question A producer is using certain tool item in productive process. Annual requirement is 20,000 units of the tool. Cost of ordering a lot is Rs.160/-. Per unit price of the tool is Rs.360/-. Annual interest cost is 10%, insurance cost is 0.5% of the average inventory in stores, and other storage expenses are Rs.2.20 per unit. Calculate annual ordering cost. Correct Answer Rs.8,000/Question A written request sent to a supplier for specified goods at an agreed upon price is often called as : Correct Answer Purchase order Question Lack of efficient control on various aspects related to raw-material increases the material cost component of the finished product. Correct Answer True

Collected by Santosh. K

Page 14 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question The perpetual inventory system enables management to ascertain stock without physical verification. Correct Answer True Question The main advantages of profit sharing are : Correct Answer Employees try to increase productivity , Incentives are shared by all the employees , Augments emplyees' efficiency Question It is the ________ method of measuring labour turnover which is a combination of separation method and replacement method. Correct Answer Flux Question Measurement of ________ gives an idea of the degree of mobility of labour. Correct Answer Labour turnover Question Computation of gross wages, deductions and net wages payable is the function of the ________ department. Correct Answer Personnel Question Merits of break even point analysis are as follows: Correct Answer Useful diagnostic tool. , Used for analysing the risk implication of alternative actions. , Used to graphically represent complicated data. Question Annual fixed cost of a producer is Rs.500,000/-. The price of its product is Rs.60/- and per unit variable cost is Rs.40. In the next year his fixed cost commitments are expected to go up by 20%. By what percentage the break even point will go up in the next year. Correct Answer 0.2 Question A firm earns profit when contribution is equal to fixed costs under variable costing. Correct Answer False Question Labour efficiency variance arises due to: Correct Answer Inefficient supervisor , Poor working conditions , Use of sub-standard quality of material Question Actual costs determined on the basis of costing records maintained have following limitations : Correct Answer No practical utility from control point of view , No practical utility for price fixation , Expensive Question A standard that is never altered, after being established, is known as ________ standard. Correct Answer Ideal Question Standard costs are used for external reporting. Correct Answer False

Collected by Santosh. K

Page 15 of 97

SCDL – Management Accounting Match The Following Question

Correct Answer

Book-Keeping

Books of Accounts

Financial statement

Profitability statement & Balance-sheet

Accounting

Process of analyzing & interpretation

Profitability statement

Indicates the amount of profit earned

Balance-sheet

Financial status

Match The Following Question

Correct Answer

Quality control dept

control the quality of the product

Time booking dept

jobwise booking of time

Personnel department

Selection & training to workers

Time Keeping Department

Recording of workers time

Cost accounting dept

Accumulation & classification of cost data

PGDBA – I Semester

Match The Following Question Correct Answer Lighting

Number of light points

Rent

Area

Power

Hp/KW

Depreciation

Value of assets

canteen expenses

number of workers

Match The Following Question Correct Answer Goodwill

Real A/c

Nominal Account

Wages A/C

Collected by Santosh. K

Page 16 of 97

SCDL – Management Accounting Capital A/C

Personal A/C

Building A/C

Real A/C

Salary A/C

Nominal A/C

PGDBA – I Semester

Match The Following Question Correct Answer Owner

Businessman

Banker

Financial Institution

Debtors

Credit Transaction

Creditors

Receive the money

Suppliers

Sale the Goods

Match The Following Question Correct Answer Spirit of mutual trust

Requisite for uniform costing

Avoids cut throat competition

Advantage of uniform costing

Treatment given to research and development costs

Fields covered by uniform costing

Advantageously applicable in similar industries

Scope of uniform costing

Match The Following Question

Correct Answer

Deferred revenue expenditure

Real account

Deferred revenue expenditure written off

Nominal account

Loan

Personal account

Drawings

Proprietor's account

Question Salary paid to employee amounted Rs. 10,000, transferred to Trading A/C is an example of_______ Correct Answer Error of Commission

Collected by Santosh. K

Page 17 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question Labour cost indicates that labour cost which cannot be identified with the individual cost centre and is incurred for those employees who are not engaged in the manufacturing process but only assist i Correct Answer Remuneration Question To take make or buy decision under the marginal costing , if purchase price of the product is less than its variable cost it is advisable to go for manufacturing proposition. Correct Answer False Question Income received in advance transfer to current liabilities Correct Answer True Question If wages for the month of January, February and March are Rs.4,000, Rs.4,400 and Rs.4,600 respectively and if delay in payment of wages is ½ month , payment of wages for the month of February is Correct Answer 4,200 Question Management Accounting has a very ________ scope and it requires ________ organizational structure Correct Answer wide Correct Answer elaborate Question For a unit, if opening stock of raw material is 10,000 units, closing stock of raw material is 5,000 units and consumption is 3,20,000 units, what will be the quantum of raw material to be purchased Correct Answer 3,15,000 Question Important advantages of Uniform Costing can be said to be Correct Answer It is a useful tool for management control , It avoids cut throat competition , Weaker units can take advantage of settled systems of better managed units Question Actual costs may be affected due to inefficient functioning such as Correct Answer Abnormal expenses , In efficient use of labour , In efficient use of material Question Calculate Labour Efficiency Variance, If actual rate per hour is Rs.3.50/- , Standard rate is Rs.3/- per unit and standard hours are 15,000 and Actual hours are 13, 500. Correct Answer Rs.4500/- ( Favorable ) Question Sales quantity may be forecasted after taking into consideration various factors such as Correct Answer Analysis of past trends , Market research , Reports by salesmen Question For taking make or buy decision marginal costing technique provide useful assistance. Correct Answer True Question The variable costs are controllable at the lower level. Correct Answer True

Collected by Santosh. K

Page 18 of 97

SCDL – Management Accounting

PGDBA – I Semester

Match The Following Question Correct Answer Journal

Book of original entry

Ledger

Maintain all types of Accounts

Assets

All the properties owned by the business

Liabilities

All the amount owed by the business

Drawing

Withdrawn for personal use

Question A budget manual is a document setting out the ________ of the persons and ________ required for the budget control. Correct Answer Responsibilities Correct Answer Forms and procedures Question Credit balances in all the Personal & Real accounts appear on asset side. Correct Answer False Question Omission of posting an amount in the ledger Correct Answer Error of Omission Question Non-operating / financial expenses are added while calculating net profit. Correct Answer False Question A Budget Manual may contain the following particulars Correct Answer Duties and responsibilities of various executives , Functions and duties of Budget Officer , Scope of the Budget and area to be covered Question Direct Cost includes Correct Answer Direct material , Direct labour , Direct expenses Question Financial Accounting protects the interest of outsiders . it considers ________ transaction and it is a ________ requirement Correct Answer historical Correct Answer legal Question Bin Card is having all the information of item received and issued. Correct Answer False Question Budgetary Control is useful for ________-and ________-as a powerful tool in the hands of management Correct Answer Cost control Correct Answer Maximization of profits

Collected by Santosh. K

Page 19 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question The material Requisition note contains Correct Answer Number and date , Department demanding the material , Signature of the authority approving the demand Question Fixed overheads normally arise as a result of policy and are largely ________ in nature at the ________ level of the management Correct Answer uncontrollable Correct Answer lower Question Budget is prepared for a fixed period of time. Correct Answer True Question Sold Goods of Amitabh worth Rs. 15,000 against 15% Trade discount. The Goods worth appear on account ___________ Correct Answer 12750 Question This is not the non monetary incentive. Correct Answer Co-partnership Question P&L statement which is a period statement & relates to a certain period tells about results of operations. Correct Answer True Question Cost Accounting is concerned with calculation of the profitability and state of affairs of the organization as a whole. Correct Answer False Question Financial accounting may deal with the ascertainment of cost & calculation of profitability of the individual product. Correct Answer False Question Management Accounting aims at enabling the management to take the decisions about the future. It may consider future data as well as non-financial factors. Correct Answer True Question Financial Accounting primarily protects the interests of the outsiders dealing with organization in various capacities. Correct Answer True Match The Following Question

Correct Answer

Financial Accounting

Systematic recording of business transactions

Cost Accounting

Ascertainment of cost

Collected by Santosh. K

Page 20 of 97

SCDL – Management Accounting

PGDBA – I Semester

Management Accounting

Analyzing & interpretation of financial data

Accounting

Art of interpreting & classifying business transaction

Book Keeping

Recording of business transactions

Match The Following Question Correct Answer Bills Payable

Amount payable to supplier

Bills Receivable

Amount received from the customer

Trade Discount

Not accounted for in the books of Accounts

Cash Discount

Accounted for in the books of Accounts

Bad debts

Amount not received from customer

Question Amount invested in purchasing Fixed Asset is a revenue expenditure. Correct Answer False Question Going Concern Concept __________________ Correct Answer Indefinite longer period , Not likely to close down in shorter period , This affects the values of asset and liabilities Question Cost of asset is 1,20,000, estimated scrap value 20,000, cost of assets subjected to depreciation 2,00,000, rate of depreciation is 10%. Calculate depreciation for 3 yrs as per the reducing balance m Correct Answer 20,000,18,000,16,200 Question Profit & Loss A/C credit side has Correct Answer Gross profit , Commission received , Interested received Question Juhi started business with Rs borrowed capital of Rs. 1,00,000 with 10% interest per year. What is the total amount of the capital Correct Answer 1,10,000 Question Cheques issued but not yet presented – the balance as per the bank pass book will be higher. Correct Answer True Question This cost indicates historical cost which is incurred in past. Correct Answer Sunk cost

Collected by Santosh. K

Page 21 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question Labour cost is the cost of __________ paid to employees of the organization. Correct Answer Remuneration Question Company having opening stock of Rs. 1,80,000 purchase Rs. 8,00,000. Freight Inward Rs, 35000 & closing stock Rs. 2,00,000, having direct wages Rs. 2,35,000. What will be prime cost. Correct Answer 10,50,000 Question For the proper interpretation and presentation of cost the overhead further classified as Correct Answer Factory overheads , Office and administration overheads , Selling & distribution overhead Question A good wage payment system will punish the workers for the matters beyond the control of the workers. Correct Answer False Question These are the features of fixed overheads Correct Answer total cost remains the same , per unit cost may vary , not dependent on volume of output Question Under marginal costing technique only fixed costs are considered as relevant for decision making. Correct Answer False Question Product mix refers to the proportion in which various products of a company can be sold. Correct Answer True Question The cost that varies in direct proportion with the level of activity is called Correct Answer variable cost Question Basic assumptions made by marginal costing are Correct Answer per unit selling price remains constant at all the levels of activities. , whatever is produced by the organisation is sold off. , per unit variable cost remain constant. Question Calculate Volume Variance, If budgeted production is 20,000 units, actual production is 22,000 units and Standard rate per unit is Rs.1.5/-. Correct Answer Rs.3,000/- ( Favorable ) Question Calculate Sales Price Variance, If actual price is Rs.5.40/- per unit, Standard price is Rs.5/per unit and actual sales volume is 500 units. Correct Answer Rs.200/- ( Favorable ) Question Uniform Costing disturbs the healthy competition in the industry Correct Answer False Question

Uniform Costing Methods may be advantageously applied

Collected by Santosh. K

Page 22 of 97

SCDL – Management Accounting

PGDBA – I Semester

Correct Answer In single organization having number of branches. , Number of companies in same industry. , Similar Industries such as cotton, jute etc. Question In Cash budget , Operating cash outflow includes Correct Answer Payment to Creditors , Cash purchases of raw material , Wages/salaries Question Characteristics of budget can be said to be Correct Answer It may be prepared in terms of quantity or money or both , It is prepared for a fixed period of time , It spells out objectives to be attained Question Like initial formation expenses, ________ and R & D are the examples of Deferred Revenue Expenditure Correct Answer Initial Advertisement Correct Answer R&D Question If ________ books are the books which record the transactions in the chronological order, ________ is the book where transactions of a similar nature are pooled together Correct Answer subsidiary Correct Answer ledger Question 4.Under the differential time rate method the wages are paid at Rs. 1.50 per hour between ________ efficiency and Rs.1.25 per hour between ________ efficiency Correct Answer 101% to 125 % Correct Answer 80% to90% Question ________ and ________ are examples of element wise classification ofoverhead costs Correct Answer Idirect material Correct Answer indirect labour Question If the profit volume ratio is 25%, then the variable cost is equal to ________ of sales value. Correct Answer 0.75 Question Under time rate system a worker is paid on the basis of production achieved by him in a given time. Correct Answer False Question Which of the following costs is most likely to have a cost behaviour pattern described as ..a fixed cost upto an activity level of 1,000 units, with a variable cost there after which decreases from 10 paise to 8 paise per unit at 2,000 units? Correct Answer Wages payment which is fixed for a minimum output quantity after which a bonus per unit is paid which reduces when activity level exceeds 1,000 units Question The phrase 'By Balance c/d.' written on the credit side of the rent account, indicates credit balance for this account. Correct Answer False

Collected by Santosh. K

Page 23 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question In case of defective material being returned by the stores department to the vendor, such material should be valued at the________. Correct Answer Purchase price Question Piece rate system is suitable when quality of goods produced is of extreme importance. Correct Answer False Question While preparing trial balance, the balance as per ________ book is considered as bank balance. Correct Answer Bank Question Standard time required for a job is 10 hours, i.e.10 X 60 = 600 'Bs'. The worker has actually completed the job in 6 hours, i.e.6 X 60 = 360 'Bs'. Time wage rate is Rs.20/- per hour. Bonus is shared between the worker and the foreman in the ratio of 3:1. Calculate total earning of the worker as per Bedeaux Point System. Correct Answer Rs.180/Question Contribution represents pool of resources available for meeting all costs other than ________. Correct Answer Variable costs Question Locate the steps involved in rectifying the errors in the books of accounts Correct Answer Find the wrong entry passed , Find the correct entry to be passed , Find the entry that will resolve the mistake in the books Question Judge the following narrative according to the criteria given : There are many organizations whose sales fluctuate with fluctuations in the weather, viz. ice-cream, sweaters, etc. Correct Answer The statement and the reason are both incorrect Question Overheads chargeable to a product, using direct labour cost basis, may be calculated by multiplying percentage of direct labour cost and ________. Correct Answer Direct labour cost of the product Question Causes for adverse material price variance are: Correct Answer Uneconomical size of purchase orders , Failure to avail discounts allowed by suppliers. , Excessive freight charges Question The objectives of Uniform costing system are as follows : Correct Answer To fix a common selling price for the industry as a whole , To compare efficiency of each unit against industry's overall performance , To compile reliable cost data for inter-firm comparison of costs Question 200 units of material were purchased from X @ Rs.5/- per unit and 300 units were purchased from Y @ Rs.6/- per unit. The organisation follows FIFO system of pricing of issues and the above purchases have been recorded in stores ledger. 120 units have already been issued. 60 units received from X are defective and are therefore returned. Find the value of the material returned to X. Correct Answer Rs.300/-

Collected by Santosh. K

Page 24 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question If the total manufacturing overhead of a tiles producing factory amounted to Rs.15 lakhs and the overhead rate was Rs.5/- per sq.ft, then the production for the period can be stated as ________ sq.ft. tiles. Correct Answer 300000 Question Category C items, as per the ABC analysis, usually refers to indirect material. Correct Answer True Question According to the standard costing principles, only adverse variance must be further investigated. Correct Answer False Question Education facility to workers and their children, pension, superannuation fund are examples of ________ incentives. Correct Answer Non-monetary Match The Following Question

Correct Answer

Closed the account with State Bank of India Henceforth, there shall be no difference in overdraft balances Debit side of bank book is overcast book

Overdraft as per bank book < Overdraft as per pass

Interest on debentures directly credited by bank book

Overdraft as per bank book > Overdraft as per pass

Received sanction for a loan of Rs.10 lakhs book

Overdraft as per bank book = Overdraft as per pass

Question The ________ adjustment is necessary to relfect the cost for the use of fixed asset during the year. Correct Answer Depreciation Question The purchase account should be debited when an order is placed with the supplier of material. Correct Answer False Question The purchase budget for October is Rs.12,500/- and November is Rs.15,000/-. If the materials are purchased for cash the supplier is offering a rebate of 5%. If the materials are purchased on credit of 30 days, no rebate is offered. The company purchase Correct Answer October- NIL, November- Rs.26,750/-

Collected by Santosh. K

Page 25 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question The variance which measures the profit consequences of selling different products in proportions other than the standard, is known as ________ variance. Correct Answer Sales margin mix Question Which system can assist in fixing a common selling price for the industry as a whole on the basis of cost of production of all units belonging to that industry ? Correct Answer Uniform costing Question Select the non-monetary incentives Correct Answer Health and safety services , Canteen facility, Loans at reduced rate of interest Question Control on purchase of material is exercised by the storekeeper. Correct Answer False Question In practical circumstances, the ________ are referred to as application of funds. Correct Answer Assets Question The composition of selling costs is given below : 1 salaries 4% of sales, travelling expenses 1.5% of sales, and sales office 2% of sales. Find the amount of selling overheads if the sales are Rs.120,000/-. Correct Answer Rs.9,000/Match The Following Question Correct Answer Ledger

Maintain all types of accounts

Audit

Reviewing internal control system

Accounting

Process of analyzing & interpretation

Journal

Book of original entry

Question The document which lays down the cost accounting plans and procedures to be followed by the constituent units is known as ________. Correct Answer uniform cost manual Question The characteristics of a good wage system are : Correct Answer Flexible , Economical to use , Easy to understand Question Fixed deposit bearing interest @ 5.50%, for Rs.10,000/- was kept with Bank of India on 1st June, 2003, for a period of one year. The type of the fixed deposit is cumulative, i.e. interest shall be received only on maturity. What treatment should be given in the books of accounts on 31st March, 2004, the year ending date? Correct Answer An entry for Rs.458.34, debiting interest accrued but not due account should be passed

Collected by Santosh. K

Page 26 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question If you are required to enforce uniform costing system in your industry, how would you proceed ? Correct Answer Collecting data from all units of your industry, Ensuring that the data collected is complete and correct, Maintaining secrecy of the data collected Question Uniform Costing simplifies the work of wage boards of fixing minimum wages and fair wages. Correct Answer True Question Marginal costing is found to be unsuccessful in the following situations :Correct Answer Impossible to distinguish costs into fixed and variable component. , With respect to capital intensive industries where fixed costs are very large and hence cannot be ignored , With respect to service industries where employee costs are very large and almost fixed in nature Question Master budget provides a basis for computing effect of changes in : Correct Answer product mix of the company , sales volume , production facilities Question Over absorption of overheads may take place due to the reasons like ________ overheads being less than the ________ overheads Correct Answer actual Correct Answer estimated Question ________ of Trial Balance generally ensures ________ accuracy of the process of ledger posting. Correct Answer Talling Correct Answer arithmetical Question While calculating the minimum level, normal lead time is not necessary Correct Answer False Question To Increase the existing production capacity, additional capital expenditure is required. Correct Answer True Question During one week X makes 200 units. He receives wages for a guaranted 44hours per week at a rate of Rs. 1.50 per hour. Estimated time to produce one unit is 15 minutes. Time allowed is increased by 2 Correct Answer Rs. 83.60 Question Cost-sheet may be prepared separately for each Correct Answer Different Cost Centre Question The cost of asset is Rs. 1,10,000, Estimated scrap value 10,000,estimated life 10 yrs. Calculate the depreciation according to straight line method Correct Answer 10,000

Collected by Santosh. K

Page 27 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question To ascertain the ________ of all the transactions recorded in the ledger account, the account is required to be ________ Correct Answer Net effect Correct Answer Balanced Question In fixed overhead variance, the volume variance is further analyzed as Correct Answer Variance Efficiency Variance , Capacity Variance , Calendar Variance Question Accounts is a Correct Answer Record of all transaction Question Whatever is to be sold need not be produced. Correct Answer True Question Patents and Trade Marks Account is a Real Account. Correct Answer True Question Budget is prepared in terms of Correct Answer Quantity and/or Money Question Favorable variances need on investigation Correct Answer False Question Standard Costing may not be useful in Correct Answer Small concerns , Industries having non-standardized products , Contract jobs Question Standard costs are the targets to be attained by the actual performance. Correct Answer Minimum Question During one week X makes 200 units. He receives wages for a guaranted 44hours per week at a rate of Rs. 1.50 per hour. Estimated time to produce one unit is 15 minutes. Time allowed is increased by 2 Correct Answer Rs. 75 Question Accounting refers to the process of analyzing & interpreting the information already recorded in the books of accounts. Correct Answer True Question Double Entry Accounting System__________________ Correct Answer Every business transactions have two elements , When business receives something, it has to pay something , Every debit has a corresponding credit Question Purchase Goods of Rs. 7500 on 10% cash discount. The discount amount is _______ Correct Answer 750

Collected by Santosh. K

Page 28 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question The cost of fixed asset is Rs. 1,00,000. Rs. 17,000 deducted as depreciation. Calculate the percentage Correct Answer 17% Question When bank balance as per bank book is considered then following to be added. Correct Answer cheques issued but not presented , direct deposit by customer , wrong credits given by bank Question As soon as the suspense account balance is wiped out , it may be assumed that all mistakes have been corrected. Correct Answer False Question Credit sale of Rs. 5000 to Bobby should be entered in the purchase book. Correct Answer False Question Manufacturing process involves study of Correct Answer Designing the product , The quantity and quality , Material used Question The Bin card and stores ledges do not match due to the following reasons: Correct Answer Arithmetical errors in calculating , Non- posting a certain document , Posting a wrong Bin card Question Flux method is important method of wage payment. Correct Answer False Question The causes of idle time can be analysed as Correct Answer Administrative causes , Productive causes , economic causes Question If production overheads to be absorbed are Rs. 50000/- and labour hours worked are 100000 then the labour hour rate will be, Correct Answer Re. 0.50 per labour hour. Question Fixed cost tends to vary with time rather than with level of activity. Correct Answer True Question Limitations of marginal costing are Correct Answer difficult for classification as fixed cost and variable cost. , does not provide any standard for the evaluation of performance. , it is useful technique only in the short run. Question Flexible budget is an effective tool for evaluation of performance. Correct Answer True Question Material Mix Variance occurs where only one raw material is required Correct Answer False

Collected by Santosh. K

Page 29 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question Calculate Efficiency Variance, If actual production is 22,000 units, Standard production in actual hours is 21,000 units and Standard rate per unit is Rs.1.5/-. Correct Answer Rs.1,500/-( Favorable ) Question Standard may not be necessarily useful for this purpose. Correct Answer Forecasting Question In Cash budget , Non-Operating cash outflow includesVarious kinds of over heads Correct Answer Loan instalments , Taxes , Purchase of fixed assets. Question During a month opening stock is 5,000 kg, closing stock is 6,000 kg and production is 21,000 kg , what is the quantity of sales Correct Answer 20,000 kg Match The Following Question

Correct Answer

Ordering cost

Associated with administrative efforts

Carrying cost

Cost of holding the inventory

Total cost

Ordering cost + carrying cost

Inventory control

Maintain the inventory of any kind

E.O.Q

Economic Ordering Quantity

Question Generally accounts of the assets will have ________ balance and liabilities will have ________ balance Correct Answer debits Correct Answer credits Question Interest on overdraft charged by the bank is ________ to the pass book and ________ to the cash book Correct Answer debited Correct Answer credited Question After material is received from the supplier, quantity actually received is compared with quantity ________-and ________-if any, are taken up with the supplier Correct Answer ordered Correct Answer variation Question Labour Turnover indicates ________ in labour force showing a highly increasing trend or highly ________ trend Correct Answer change Correct Answer decreasing

Collected by Santosh. K

Page 30 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question Administration overheads are ________ in nature and can be controlled mainly at ________ level of the management Correct Answer fixed Correct Answer top Question Bin card is maintained by ________ department whereas ________ is maintained by costing department. Correct Answer Stores Correct Answer Store ledger Question Profitability statement indicates the amount of assets & liabilities. Correct Answer False Question Advance received from customers is ________ for the organisation. Correct Answer A liability Question The features of multiplicity of key factors are as follows : Correct Answer More than one key factors , Refers to a complex situation , Can be resolved by using linear programming technique Question Maintenance Department is a service cost centre. Correct Answer True Question Identify the budgets for which the production manager sould be held responsible : Correct Answer Production budget , Production overheads budget , Plant utilisation budget Question The data for XYZ Ltd. is as follows : Fixed assets Rs.60,000/-; total cost Rs.105,000/-; working capital is equal to 25% of the sales value. The company expects 25% return on capital employed. Capital employed is equal to fixed assets plus working capital. Select the correct answers: Correct Answer Sales Rs.128,000/- , Return on capital employed , Working capital Rs.32,000/Question Select the cost that indicates increased or decreased total cost due to the increased or decreased volume of operations. Correct Answer Differential cost Question If the owner brings in personal calculator for office use, ________ account should be credited. Correct Answer Capital Question Variable cost + Profit = Sales Correct Answer False Question A firm employs ten workers at an hourly rate of Rs.20/-. They worked for 40 hours each and completed the job for which standard time was 48 hours for each worker. Calculate labour cost for the job under the Rowan Plan.

Collected by Santosh. K

Page 31 of 97

SCDL – Management Accounting Correct Answer

PGDBA – I Semester

Rs.9,333.33

Question Features of material usage variance are : Correct Answer Measures the difference between the quantity of materials actually used and that should have been used. , Considers standard price X actual quantity , Considers standard price X standard quantity Question Treating capital receipt as revenue income is an example of errors of commission. Correct Answer False Question Basic objective of Uniform Costing is . . . Correct Answer comparison Question Identify the causes due to which the cost of labour may be high: Correct Answer Excess staffing , Lack of experienced and efficient personnel , High labour turnover Question Two competing companies Hero Ltd. and Zero Ltd. sell the same type of product in the market. Their forecasted profit and loss accounts for the year ending December 2003 are as follows : Hero Ltd.: Sales Rs.500,000/-; Variable cost Rs.400,000/-; fixed costs Rs.50,000/-. Zero Ltd.:Sales Rs.500,000/-; Variable cost Rs.300,000/-; fixed costs Rs.150,000/-. You are Correct Answer Hero Ltd. Question Features of Sunk cost are . . . Correct Answer Indicates historical cost , Not relevant in decision making process , Incurred in past Question For a manufacturing company, dividend received is a non-operating income. Correct Answer True Question Features of purchase requisition slip are : Correct Answer Raised when the stock of a raw material has fallen to the re-order level. , Indicates the type, quantity and quality of material required , The information about the price of material is excluded Question Judge the sentence in italics according to criteria given below : " It is difficult to adopt Uniform costing system when a product can be manufactured by employing more than one method because the cost of production will vary according to the method used." Correct Answer The assertion and the reason are both correct Question Crane expenses should be apportioned on the basis of ________. Correct Answer Number of hours crane worked in the department Question Information as to the cost and profit / loss associated with the firm's operations is provided to the ________ by Management accounting. Correct Answer Management

Collected by Santosh. K

Page 32 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question Features of convention of consistency are . . . Correct Answer The accounting policies and procedures should be followed consistently , Facilitates the comparison of financial statements , It facilitates comparison of financial statements on period-to-period basis Question Uniform costing is not a separate method of ________. Correct Answer cost accounting Question Suspense account is closed automatically after rectification of all the errors. Correct Answer True Question Manufacturing overheads represents all costs incurred in the factory including direct material cost and direct labour cost. Correct Answer False Question Generally all the liabilities will have ________balance. Correct Answer Credit Question If overhead absorbed i.e. overheads charged to units during the period is more than the overhead incurred, it is said that the overheads are ________. Correct Answer Over-absorbed Question Loan @ 12% p.a. of Rs.50,000/- was taken on 1st March, 2004. Find the interest expenditure on 31st March, 2004. Correct Answer Rs.500/Question The sales forecast (quantity) should be compared with the ________ to find out whether it is possible for the firm to handle this level of sales. Correct Answer Production capacity Question Following are the examples of service cost centre Correct Answer Stores department , Transport department , Accounting department Question The sum of indirect material cost, indirect labour cost and indirect expenses is termed as Overheads. Correct Answer True Question Pre-requisites of Uniform Costing are . . . Correct Answer Spirit of mutual trust , Free Exchange of ideas , No rivalry Question You are using petrol as one of the raw materials. Daily you purchase 1,000 litres of petrol at Rs.28.50 per ltire. 5% of it generally gets lost due to spillage and evaporation. On a particular hot and dry day, the issue of petrol from 1,000 litres drum was as follows : To job X 200 litres; job Y 400 litres and job Z 320 litres. After these issues the drum was empty. Calculate per litre charge for use of petrol, quantum of loss and total quantum of petrol used for jobs X,Y and Z.

Collected by Santosh. K

Page 33 of 97

SCDL – Management Accounting Correct Answer Rs.30/-

PGDBA – I Semester

Loss due to spillage and evaporation - 30 litres. , Rate of charge per litre of petrol -

Question Error of commission refer to calculation errors, totaling errors, errors in carrying forward etc. Correct Answer True Question Cheque received from a client on 28th September, 2004 must be entered in the bank book only after it is credited in the pass book. Correct Answer False Question Copy of a firm's account in the bank's ledger is known as ________. Correct Answer Bank statement Question The column which refers to the page number of the ledger is known as ________. Correct Answer Ledger folio Question The direct material useage budget and direct material purchase budget differ because of which of the following: Correct Answer A planned change in the level of material stock Question Loss is equal to fixed cost minus ________ Correct Answer Contribution Question Profit = Contribution per unit X ________. Correct Answer Margin of safety (units) Question The different purposes served by standard costing technique are : Correct Answer Cost control , Cost awareness , Performance appraisal Question Error of commission refer to a situation where a transaction is not recorded in the books of account. Correct Answer False Question If a predetermined overhead rate is not employed an the volume of production is increased over the level planned, the cost per unit would be expected to : Correct Answer Decrease for fixed costs and remain unchanged for variable costs Question The variance which measures the difference between what is paid for a given quantity of materials and what should have been paid for, is known as ________ variance. Correct Answer Direct material cost Question Deferred revenue expenditure written off account is a real account. Correct Answer False

Collected by Santosh. K

Page 34 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question The cost of fixed asset is Rs. 1,00,000. Rs. 17,000 is charged as depreciation. Calculate the rate of depreciation. Correct Answer 0.17 Question The cost-volume-profit analysis basically highlights the effect of changes in sales volume on the profit of the company, in the ________. Correct Answer short run Question The following figures relate to a company manufacturing a varied range of products : Year 2003 Total sales Rs.22,23,000/- and total cost Rs.19,83,600/-. Year 2004 : Total sales Rs.24,51,000/- and Total cost Rs.21,43,200/-. Assuming stability in prices, calculate the profit volume ratio Correct Answer 0.3 Question Calculate the machine hour rate. The amount of overhead pertaining to June, 2004 to be apportioned is Rs.170,010/-. The machine cannot work without an operator. During the month June, 2004 the machine operator has been paid for 5,670 hours. Correct Answer Rs.29.98 Question While preparing sales budget the following factors must be considered : Correct Answer The number and types of products sold by the organisation , Whether the organisation's market share is increasing or decreasing? , Details of seasonal fluctuations in sales Question Techniques of management accounting include: Correct Answer Marginal costing , Budgetary control , Standard costing Question Which of the following aspects are mainly responsible for difficulty in application of Uniform costing system. Correct Answer Capital investment , Plant size , Location Question The expenses relating to maintenance and creation of demand for the product should be included in the ________budget Correct Answer Selling expenses Question Management Accounting is… Correct Answer Designed particularly for internal use , Helpful in estimating the future along with past period , Useful in furnishing the necessary information to the management Question Malik started business by contributing cash Rs.50,000/- and his personal car worth Rs.25,000/-; thus his capital account should be credited with Rs.75,000/-. Correct Answer True Question The selection of the supplier may depend upon the following aspects: Correct Answer Geographical location of the supplier , Price quoted by the supplier , Goodwill of the supplier

Collected by Santosh. K

Page 35 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question XYZ & Co. has taken a loan of Rs.100,000/- @ 15% p.a.on 1st October, 2003. Interest is to be paid on half yearly basis. What treatment should be given in the books of accounts of XYZ & Co. as on 31st March, 2004? Correct Answer Interest account should be debited with Rs.7,520.55 and outstanding interest account should be credited with Rs.7,520.55 Question The labour cost which can be identified with the individual cost centre is known as the Direct Labour Cost. Correct Answer True Question If the firm is operating with zero margin of safety, decline of even a single unit in sales will result in ________. Correct Answer Loss Question When bank balance as per bank book is considered for preparing bank reconciliation statement, then following items need to be added : Correct Answer Cheques issued but not presented , Direct deposit made by customer , Wrong credits given by bank Question The indirect material cost, indirect labour cost and indirect expenses cost, collectively are termed as ________. Correct Answer Overhead Question Labour efficiency variance Rs.1,000/- (favourable); labour mix variance Rs.260/- (adverse) and labour rate variance Rs.300/- (adverse). Compute labour cost variance and labour yield variance. Correct Answer Labour cost variance -Rs.700/- (Favourable) , Labour yield variance -Rs.1,260/- , Labour yield variance is favourable Question If the standard contribution is less than the actual contribution, then ________ variance arises. Correct Answer Favourable Question

Correct Answer

Purchase budget

Forecast of quantity and value of materials

Budget committee

Analyses the performance of different budget centres

Cash budget

Assists in predicting shortage of cash

Budget

Objective is performance evaluation

Question As a part of the data presented in support of a proposal to icnrease the production of clock radios, the sales manager of Wittman Electronics reproted the total additional cost required for the proposed increased production level. The increase in total cost is known as : Correct Answer Incremental cost

Collected by Santosh. K

Page 36 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question Business Entity Concept ______________. Correct Answer Business is separated from the owner. , The accounting process carried out for the business , Separate legal entity Question The danger level fixed below maximum level Correct Answer False Question Following example comes under service cost centre Correct Answer Store department , Internal Transport department , Accounting/Costing department Match The Following Question

Correct Answer

Straight Piece rate system

The rate of payment is fixed per piece

Diemer system

Halsey system & Gantt System

Time rate System

Worker is paid on the basis of time attended by him

Payment by Result

Workers are paid according to the production achieved by him

Differential Time rate

Different hourly rates are fixed for different levels of efficiency

Question When bank balance as per pass book is considered then following to be added. Correct Answer cheques deposited but not cleared , Interest debited by bank , bank charges debited by bank Question (No. of unit * Rate of depreciation per unit ) this formula is used for written down value method. Correct Answer False Question Cash and---------------are the two systems of accounting. Correct Answer Mercantile Question This cost indicates increased or decreased cost due to the increased or decreased volume of operations. Correct Answer Differential cost Match The Following Question

Correct Answer

Fixed cost + variable cost

Total cost

Total cost – fixed cost

variable cost

Collected by Santosh. K

Page 37 of 97

SCDL – Management Accounting

PGDBA – I Semester

sales- variable cost

contribution

contribution – fixed cost

profit

Total cost + profit

Sales

Question Under the differential time rate method of wage payment between 90% to 100% of efficiency following rate is offered. Correct Answer Rs. 1.40 per hour Question Margin of safety are the sales beyond Correct Answer break even point Question Indirect Labour Cost Correct Answer Wages paid to storekeeper, Salary of works manager, Wages paid to gatekeeper Question The difference between sales and factory/ works cost is termed as ________ the difference between sales and ________ termed as net profit Correct Answer gross profit Correct Answer cost of sales Question For a material, if standard quantity is 400 kg and standard price is Rs.3.75/- per kg. Find out the Material Usage variance if actual quantity is 500 kg and actual price is Rs.3.60/- per kg. Correct Answer Rs.375/-( Adverse ) Question Labour Efficiency Standards are decided by considering following factors Correct Answer Records of past performance, Time & Motion Study, Trial Runs Question Depreciation does not involve cash out flow Correct Answer True Question The difference between standard cost and actual cost is termed as Variance. Correct Answer True Question Wage payment system should be properly tied up with quality control procedures to ensure that the workers are paid only for good and quality production. Correct Answer True Question In Cash budget Operating cash inflow includes Correct Answer Cash Sales, Collection from Debtors, Interest/Dividend received Question If the product is labour intensive, more stress may be necessary on inventory control procedure. Correct Answer False

Collected by Santosh. K

Page 38 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question A good wage payment system will not punish the workers for the matters beyond the control of the workers. Correct Answer True Question The material issued to production department may be returned back to the stores because material issued in excess requirement and Correct Answer Material issued is defective Question Following are called the element of Cost Correct Answer Material , Labour , Expenses Question Amount with drawn for personal purpose drawing A/C to be debited. Correct Answer True Question Under the repeated distribution method the overheads of ________ department are distributed to other departments on agreed ________ Correct Answer service Correct Answer percentage Question Under time rate system a worker is paid on the basis of production achieved by him. Correct Answer False Question Calculate Labour Rate Variance, If actual rate per hour is Rs.3.50/- , Standard rate is Rs.3/- per unit and actual hours are 13, 500. Correct Answer Rs.6750/- ( Adverse ) Question Benefits available from revenue expenditure are received in the : Correct Answer Same year Match The Following Question Correct Answer Cost Centre

Facilitate the fixation of responsibility

Cost Control

Process of controlling costs of operations

Differential Cost

Increase or Decrease in cost

Sunk Cost

Historical Cost

Question Financial Accounting is … Correct Answer Designed to supply information to internal/ external users , Referred as 'Historical' form of accounting , Concerned with financial factors Question The system which provides an opportunity to the small units to take advantage of the research work taken by the large scale units of the same industry is known as ________ system.

Collected by Santosh. K

Page 39 of 97

SCDL – Management Accounting Correct Answer

PGDBA – I Semester

Uniform costing

Question The net profit before certain adjustments was Rs.95,040/-. After giving due effects to the adjustments, the revised net profit (after considering the adjustments) is Rs.78,560/-. Select the adjustments which might brought this change. Correct Answer Accrued commission income of-Rs.32,960/- was not entered in the books , Rent for the month of March was payable and yet to be recorded Rs.19,280/- , Repairs expenditure to the extent of Rs.30,160/- was wrongly transferred to Machinery account Question If the customer is not likely to pay the amount receivable from him, this amount should to be treated as ________. Correct Answer Bad debts Question Creditors as on 31st March, 2004 amount to Rs.15,225/-. Provision for discount from creditors is to made @ 5%. Find the impact of this provision on the net profit. Correct Answer The net profit will increase by Rs.761.25 Question Under the Rowan plan bonus is a fixed percentage. Correct Answer False Question Margin of safety indicates ________ of operations. Correct Answer Profitability Question XYZ Ltd. has sufficient idle capacity. It has received an enquiry for the supply of 300 units (packed in better box at an additional cost of Rs.20/- per box). The variable cost of manufacturing the product is Rs.150/-. The company expects a profit of Rs.6,000/- from this wholesale offer. What minimum price should it quote for this deal? Correct Answer Rs.190/Question Period cost is the cost assigned to the products. Correct Answer False Question In calculation of total sales margin variance, the ________cost of sales is deducted from the actual sales revenue. Correct Answer Standard Question The sales mix variance highlights the fact that the actual mix of sales has been in the same ratio as budgeted. Correct Answer False Match The Following Question Correct Answer Personal A/C

Debit the receiver, Credit the giver

Real A/C

Debit what comes in, Credit what goes out

Collected by Santosh. K

Page 40 of 97

SCDL – Management Accounting Nominal A/C

Debit all the expenses, Credit all the incomes

Tangible assets

Building, Machinery

In tangible assets

Patents, Trade marks

PGDBA – I Semester

Question When bank balance as per pass book is considered then following to be deducted. Correct Answer cheques issued but not presented , direct deposit by customer , wrong credits given by bank Question Rs. 2500 paid for the purchase of radio set for personal use of proprietor debited to general expenses account for rectifying the error, which A/C to be debited Correct Answer Drawing A/C Question Total of purchase register for the month of March is taken 50,000 instead of 55,000. Posting to individual A/C of supplier total to correct amount is 55,000 but purchase account is debited by Rs. 50,0 Correct Answer True Question Office & Administration overhead includes Correct Answer Salary , Rent & Taxes , Stationary & postage Question There is reverse relationship between the ordering cost and carrying cost Correct Answer True Question Following points are taking into consideration for evaluation of receipts Correct Answer The Price , The trade discount is to be deducted , Other amounts such as sales tax, excise duty, octroi duty Question In EOQ, to express carrying cost as a percentage of the unit cost of purchases this is used in the formula----------Correct Answer i Question Where overheads chargeable to the department are Rs. 5000/- , direct labour hours worked are 24000 then labour hour rate is Re. 0.2083 labour hour. Correct Answer True Question The selection of the base on which overheads should be apportioned depend on the following principles. Correct Answer service or use basis , survey basis , ability to pay basis Question The Budget key factor may be in the form of sales, raw material, labour etc. Correct Answer True Question For a material, if standard quantity is 500 kg and standard price is Rs.6/- per kg. Find out the Material Cost variance if actual quantity is 400 kg and actual price is Rs.6/- per kg.

Collected by Santosh. K

Page 41 of 97

SCDL – Management Accounting Correct Answer

PGDBA – I Semester

Rs.600/-( favorable )

Question Find out Labour Efficiency Variance, if Standard Rate is Rs.1.50/- per hour, Standard hours are 12,000 and Actual hours are 12,600. Correct Answer Rs.900/- ( Adverse ) Question Calculate Labour Mix Variance, If revised standard hours are 16,500/-, Standard rate is Rs.3/- and Actual hours are 13, 500. Correct Answer Rs.9,000/- ( favourable ) Question Calendar Variance arises only if there is abnormal increase or decrease in Correct Answer Actual number of working days Match The Follow Question

Correct Answer

Token or Disc Method

Token number & identification number allotted to worker

Time Recording Clock Method

Ticket number & clock card allotted to worker

Daily Time sheets

Time spent by worker on job is recorded

Weekly Time sheets

Record of time for all the jobs during the week is made

Hand Written method

Attendance register

Question Rs.5000 paid as ________ to ________ should be debited to salary account Correct Answer Mahesh Correct Answer salary Question Uncontrollable variances are Correct Answer Strike , Change in customers demand , Devaluation of currency Question Indirect labour cost indicates that labour cost which cannot be identified with the individual cost centre. Correct Answer True Question There is no need to open a suspense account if the trial balance does not agree. Correct Answer False Question Old furniture sold for Rs. 5400 has been entered as Rs 4500 in the cash book, for rectifying the same Suspense A/C credited to Rs Correct Answer 900 Question In financial statements P& L Accounts relates to a specific duration whereas ________ is for a given point of time

Collected by Santosh. K

Page 42 of 97

SCDL – Management Accounting Correct Answer Correct Answer

PGDBA – I Semester

P& L Accounts Balance sheet

Question Goods return by Pande worth Rs. 2000 should have appeared on the credit side of Pande’s account for rectifying the same. Following account to be credited Correct Answer Suspense A/C Question Bin Card is not an ________ record but only a ________ record. Correct Answer Accounting Correct Answer Quantitative Question Salary given in trial balance Rs. 5000/-, still 2000/- is to be paid . The outstanding salary is debited to Profit &Loss A/C. The second effect is -Correct Answer Transfer to balance sheet liability side Question Debit the receiver & credit the giver is a rule of Real a/c. Correct Answer False Question If at 50% capacity, total factory overheads are Rs.10,000/- (out of which 60% are fixed and 40 % are variable) then what will the amount of total factory overheads at 60% capacity Correct Answer Rs.10,800/Match The Following Question Correct Answer Advance

Not related in current year

Application

Increase in Assets

Outstanding Amount still payable in current year Prepaid

Amount paid for next year

Drawing

Amount of personal use

Question Head of the Department should sign the purchase requisition. Correct Answer True Question FIFO method Correct Answer The price of the earliest available lot is considered first , If the lot is exhausted, the price of the next available lot is considered , It is used for issue of material Question If production overheads to be absorbed are Rs. 20000/- and machine hours worked are 5000 then the machine hour rate will be, Correct Answer Re. 4 per machine hour.

Collected by Santosh. K

Page 43 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question From the following data, workout the EOQ annual demand. 5000 units, ordering cost Rs. 60 per unit, price per unit Rs. 100, inventory carrying cost15% on average inventory Correct Answer 300 Question Under the Emerson’s Efficiency Bonus System at following efficiency level no bonus is payable. Correct Answer Below 66.66% Match The Following Question

Correct Answer

Discount received

Suppliers

Outstanding expenses

Liabilities

Depreciation

Assets

Interest on capital

Borrowed capital

Discount allowed

Debtors

Question canteen facility to workers, health and safety services are examples of monetary incentives. Correct Answer False Question This is the process of recording attendance time of the workers. Correct Answer Time keeping Question If actual cost is more than the standard cost then it is called favorable variance. Correct Answer False Question The aggregate of indirect material cost, indirect labour cost and indirect expenses is termed as factory cost. Correct Answer False Question Interest on drawings of partners should be credited to which account? Correct Answer Profit and loss account Question The actual loss incurred by a company, due to fire, is the extent of difference between the cost of goods destroyed and the amount of claim settled by the insurance company. Correct Answer True Question Penalty paid for delay in payment to creditors represents uncontrollable cost. Correct Answer False Question Subsidiary books include:

Collected by Santosh. K

Page 44 of 97

SCDL – Management Accounting

PGDBA – I Semester

Correct Answer Cash Book , Purchase Register , Sales Register Question Balance sheet is a part of the ledger accounts maintained by the company. Correct Answer False Question Average stock = ________ + (Order size / 2) Correct Answer Safety stock Question Based on the journal entry given, identify what transaction has taken place. Suresh Account… ……….Dr. Rs.500 To Cash Account Rs.500 (Being paid to Kailash on behalf of creditor Suresh) Correct Answer Cash paid to Kailash should not be recovered from creditor Suresh Match The Follow Question

Correct Answer

Real A/C

Debit what comes in, Credit what goes out

Trade Discount

Not accounted for in the books of Accounts

Cash Discount

Accounted for in the books of Accounts

Rs.1 Personal A/C

Debit the receiver, Credit the giver

Question These are the preventive costs of labour turnover. Correct Answer Cost of maintaining good relations with the workers , Cost of medical services , Cost of welfare facilities Question If the sales forecast is less than the past sales but the top management insists upon a certain amount of additional profits, then following steps can be taken to achieve the target profit Correct Answer Increase the selling price , Reduce cost of sales , Increase the selling efforts Question A company had incurred fixed expenses of Rs.225,000/- with sales of Rs.750,000/- and earned a profit of Rs.150,000/- during the first month. In the second month, it suffered a loss of Rs.75,000/-. You are required to calculate the margin of safety for the first month. Correct Answer Rs.300,000/Question Loss on account of goods lost due to earthquake should be debited to which account? Correct Answer Profit and loss account Match The Following Question

Correct Answer

Operating income

Cash Sales

Non-Operating income

Issue of shares

Collected by Santosh. K

Page 45 of 97

SCDL – Management Accounting

PGDBA – I Semester

Plan of investment in fixed assets

Capital Expenditure Budget

Plan for surplus/shortage of cash

Cash Budget

Question Under the average cost method of valuing material issues, new issue price is determined after ________ issue. Correct Answer Each Question Narration must be mentioned in the ledger. Correct Answer False Question The sum of indirect material cost, indirect labour cost and indirect expenses is termed as factory cost. Correct Answer False Question The term ________ indicates expenditure incurred on or attributable to a given thing. Correct Answer Cost Question Items credited to Profit & Loss Account are… Correct Answer Gross profit , Commission received , Interested received Question Yield variance equal to zero indicates that the standard yield and actual yield are the same. Correct Answer True Question Balance sheet is statement of Correct Answer All Assets and Properties Question If the profit of Y Ltd. is Rs.10,000/- and its profit volume ratio is 10%, then its margin of safety will be Rs.________. Correct Answer 100,000/Question Inventory holding cost comprises of : Correct Answer Cost of insurance , Rent of store house , Salary of store keeper Question Identify the steps involved in the process of decision making : Correct Answer Determination of the problem , Ascertainment of alternative courses of action , Screening each alternative so as to select the best one Question A low inventory turnover ratio should always be preferred. Correct Answer False Question The variance which measures the deviation of the rate actually paid to labour as from the standard hourly rate is known as: Correct Answer Labour rate variance Question Following errors affect the trial balance

Collected by Santosh. K

Page 46 of 97

SCDL – Management Accounting

PGDBA – I Semester

Correct Answer Wrong totaling of subsidiary books , Posting on the wrong side of an account , Omission of posting an account in the ledger Question ________ Accounting is the process of analysis and interpretation of financial data collected with help of financial accounting & cost accounting Correct Answer Management Question Purchase day book for the month of April was under cast by Rs.1000/- which account should be credited ? ________ Correct Answer Suspense Account Question Linking overhead to a cost unit is known as overhead absorption. Correct Answer True Question A factory received a carton containing two materials X and Y. The invoice relating to the materials discloses the following details : Material X - 400 kg @ Rs.10/- per kg. =Rs.4,000/-; Material Y 600 kg @ Rs.15/- per kg.= Rs.9,000/-; Sales @ 5% =Rs.650/-; Insurance @ 1% =Rs.130/-; Freight and handling charges = Rs.220/-. Correct Answer Material X -Rs.11.10; Material Y -Rs.16.68 Question An employee working under a bonus scheme saves 10 hours in a job for which the standard time is 60 hours. Calculate the wages payable to him, if incentive bonus of 10% on the hourly rate is payable when standard time (namely 100% efficiency) is achieved, and a further incentive bonus of 1% on hourly rate for each 1% in excess of that 100% efficiency is payable. Assume that the normal rate of payment is Rs.50/- per hour. Correct Answer Rs.3,250/Question At 60% capacity utilisation the overhead recovery rate is Rs.35/- per unit. At 70% capacity the rate gets reduced to Rs.32/- per unit. What should be the recovery rate if the production attains 90% capacity utilisation? Correct Answer Rs.28/- per unit Question The production budget may be prepared in terms of : Correct Answer Units produced , Production cost , Material cost, labour cost and overheads Question Tom company has sales of Rs.200,000/- with variable expenses of Rs.150,000/-, fixed expenses of Rs.60,000/-, and an operating loss of Rs.10,000/-. By how much would Tom have to increase its sales in order to achieve an operating income of 10% of sales? Correct Answer Rs.200,000/Question Angle formed by the intersection of total cost line and sales line is called angle of ________. Correct Answer Incidence Question All costs are controllable. Correct Answer False

Collected by Santosh. K

Page 47 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question In the adjustment entry passed for closing stock, the ________ account should be credited. Correct Answer Trading Question Select the items which may be classified as selling and distribution overheads. Correct Answer Delivery van expenses , Rent of finished goods warehouse , Sales research expenses Question Warehousing cost is an item of ________ Correct Answer Distribution overheads Question From the following, select current assets: Correct Answer Sundry debtors , Stock , Pre paid expenses Question The objectives of cost accounting are : Correct Answer Cost control , Ascertain ment of cost of each product , Assist in managerial decisionmaking Question Which cost is defined as an estimated cost, prepared in advance of production or supply, estimated within a prescribed set of working conditions? Correct Answer Standard cost Question Carriage charges paid for a new machine purchased if debited to carriage account would affect the ________ Correct Answer Machinery A/c and carriage A/c Question Purchased goods worth Rs.6,450/- on 10th March, 2004. However the goods were delivered directly to the plant situated at Nagar and hence this transaction was not recorded in the purchase book, which is maintained at the corporate office. Analyse the impact of this transaction. Correct Answer The gross profit will increase by Rs.6,450/Question Fundamentally, changes in price and changes in sales volume give rise to sales variances. Correct Answer True Question The ________ is responsible for material losses while in storage. Correct Answer Store-keeper Question A cash payment of Rs.1,000/- for traveling expenses has been entered in the books but not debited to traveling A/c. The trial balance will NOT agree. Correct Answer True Question Accounts representing expenses will have ________balance. Correct Answer Debit Question It is discovered that sales effected on 31st March, 2004 worth Rs.42,000/- has not been recorded in the books of accounts. Analyse the impact on the final statement of accounts. Correct Answer The sundry debtors will increase by Rs.42,000/-

Collected by Santosh. K

Page 48 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question Purchases returns of Rs.18,000/- were wrongly transferred to the sales returns account. Calculate its impact on net profit. Correct Answer The net profit will not be affected Question New companies can adopt Uniform costing system as a ready-made system. Correct Answer True Question A journal entry is passed for trade discount, but no entry is passed for cash discount. Correct Answer False Question The assets which are suppoed to be used by the organisation to do business, are known as ________assets. Correct Answer Fixed Question The total production cost for making 20,000 units was Rs.21,000/- and the total production cost for making 50,000 units was Rs.34,000/-. Once production exceeds 25,000 units, additional fixed costs of Rs.4,000/- are incurred. The full production cost per unit of making 30,000 units is: Correct Answer Re.0.98 Question The disadvantages of time rate system are : Correct Answer Ignores the efficiency of workers , Higher labour cost , Lack of motivation to increase productivity Question Which of the following is the most efficient use of the clock card? Correct Answer To facilitate payment for time spend on the work premises Question One of the main objection to the contribution approach of costing is that it ignores fixed cost. Correct Answer True Question If the bank pays off the credit card bill, as per the standing instructions, the overdraft as per bank book will be ________ the overdraft as per pass book. Correct Answer Lesser than Question The cash flow format is used for preparing the cash budget by the ________ method. Correct Answer Adjusted Profits/Losses Question The ideal budget period for a company engaged in generation and distribution of electricity is one year. Correct Answer False Question In India, where public undertakings operate along with the private sector undertakings, ________ enables a comparative assessment to be made of the two sectors. Correct Answer uniform costing Question Unearned commission of Rs.5,000/- needs to be recorded in the books of accounts. Find its correct impact.

Collected by Santosh. K

Page 49 of 97

SCDL – Management Accounting

PGDBA – I Semester

Correct Answer The asset side of the balance sheet will increase by Rs.5,000/Question It is very easy to measure the portion of increased sales which is due to expenditure incurred for advertisement of the product Correct Answer False Question A cheque of Rs.400/- received and deposited into bank on 26th September, was credited in the pass book but was omitted to be entered in the bank book: this error will result in : Correct Answer Difference in the balance as per bank book and as per pass book Question Direct labour hour rate method of absorption of overheads is suitable where most of the production is done by using machines. Correct Answer False Question A business's telephone bill should nromally be classified into which one of the following categories? Correct Answer Semi-variable cost Question The objects of cost accountancy are . . Correct Answer To ascertain cost and profitability , Cost Control , Presentation of Information Question Depreciation can be defined as a permanent, continuous and gradual reduction in the book value of a fixed asset. Correct Answer True Match The Following Question

Correct Answer

Error of Principle

Trial Balance does not get affected

Error of Omission

Transaction is totally omitted

Error of commission

Wrong Posting

Compensating Error

Wrong classification

Difference in trial balance

Transferred to suspense account

Question The difference between sales and cost of sales is termed as ________. Correct Answer Net Profit Question ________ Accounting assists the management in establishing the plans to attain the economic objectives and take proper decisions for the attainment of its objectives. Correct Answer Management

Collected by Santosh. K

Page 50 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question The capacity utilised to installed capacity ratio is 80% for the company. The capacity utilisation ratio in respect of a machine for a particular month is 90%. The available working hours in a month are 200 hours. The break of idle time is as follows : Waiting for job - 5hours, breakdown - 4 hours and waiting for tools - 3 hours. Calculate the idle time cost when the hourly fixed cost of running the machine is Rs.8/-. Correct Answer Rs.96/Question Semi variable expenses fluctuate in direct proportion to volume. Correct Answer False Question GAIL having monopoly in the CNG (Compressed Natural Gas) market can implement the Uniform costing system. Correct Answer False Question From the following, select intangible assets: Correct Answer Goodwill , Patents , Trade Marks Question Select the accounts to be disclosed on the assets side of the Balance sheet. Correct Answer Furniture , Loan to Bank of U.S.A. , Land & building Question Judge the given statement according to the given criteria. Goods being real account, when goods are lost by fire, the goods account should be debited because the goods are not going out of the factory. Correct Answer The statement is correct but the reason is incorrect Question The credit side of the sales book was overcast by Rs.2,000/-. As a result of this rectification, what of the given impacts is likely to happen? Correct Answer The liability side of the balance sheet will increase by Rs.2,000/Question It is said that the income statement represents wealth increase /decrease for the organisation. Correct Answer True Question All personal expenses of the owner should be debited to the organisation's profit and loss account. Correct Answer False Question A cheque of Rs.400/- received and deposited into bank on 26th September, was credited in the pass book but was omitted to be entered in the bank book: this error will result in : Correct Answer Difference in the balance as per bank book and as per pass book Question If the ordering cost ________s, then the economic order quantity will Increase. Correct Answer Increase Question ________ authorises the production department to issue requistion for materials. Correct Answer Bill of material

Collected by Santosh. K

Page 51 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question P Ltd. produces a product having a monthly demand of 4,000 units. For every one unit of finished product one unit of a component X is required at purchase price of Rs.20/-. The ordering cost is Rs.120/- per order and the holding cost is 10% per annum. If the company places each order for 2,000 units due to financial constraints, what is the extra annual cost? Correct Answer Rs.80/Question An entry in the stores ledger is required for transfer of material from one job to another in the same department. Correct Answer False Question The method which deals with ownership rights being given to workers is known as ________ method of remuneration. Correct Answer Co-partnership Question A firm of boiler-house engineers provides engineering services to large number of factories having boiler houses. The firm charges on the basis of number of hours its engineers have worked for the client. Each engineer works for eight hours on each working day. Each engineer enjoys Saturday and Sunday as holiday. In addition he is granted a total of 21 more paid holidays in a year. An engineer's annual remuneration comprises (for the year Correct Answer Rs.182.29 Question Marginal costing is useful in the following areas : Correct Answer Plant shut down decisions , Make or buy decisions , Profit planning Question Cost volume profit analysis focuses attention on the ________ effect of a particular course of action. Correct Answer short run Question ABC Ltd. has a proposal of utilising a cheaper raw material which will increase the contribution from Rs.100/- per unit to Rs.125/- per unit. However, the use of cheaper raw material may result in decrease in sales by 10% (to 450 units only). Find the impact of using the cheaper raw material on the amount of contribution ( net increase or decrease in contribution). Correct Answer Increase in contribution Rs.6,250/-

Question Which of the following budgets may be termed as a long term budget? Correct Answer Capital expenditure budget , Research and Development expenditure budget , Budget of a transportation company Question A ________ can be defined as a part of the orgainsation for which separate budget can be prepared and implemented. Correct Answer Budget centre Question The finance manager is responsible for which of the following budget? Correct Answer Cash budget

Collected by Santosh. K

Page 52 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question The role of the budget committee may be taken as an advisory role to the Chief Executive. Correct Answer True Question While preparing the labour cost budget, factors such as overtime working or night shift working may be ignored. Correct Answer False Question The actual hours taken by the labour are compared with the standard hours allowed for output to find out the labour yield variance. Correct Answer True Question From the following data, determine the net profit if sales are 20% above the break even point. Selling price Rs.20/- per unit, variable cost Rs.15/- per unit and fixed overheads Rs.20,000/Correct Answer Rs.4,000/Match The Following Question

Correct Answer

Decrease in selling price will lead to

Decrease in contribution

Increase in contribution will lead to

Increase in profits

Increase in fixed cost will lead to

Increase in break even point

Decrease in variable cost will lead to

Increase in profit volume ratio

Question As on 30th September, 2004 the cost of closing stock was Rs.84,696/- and its market price as on the same day was Rs.66,584/-. Which value of closing stock should be considered in the final statement of accounts for the year ended on 30th September, 2004? Correct Answer Rs.66,584/Question Marginal costing technique is useful in taking decisions relating to which of the following courses of action? Correct Answer Decision to drop a product line , Decision to accept a special offer at price lower than the normal selling price , Decision regarding temporary shut-downs Question In a Balance-Sheet right hand side is referred as assets side and left hand side is referred as liabilities. Correct Answer True Question Profit and loss account indicates the profit earned as on a particular date. Correct Answer False Question The balance of the suspense account will ________ after all the errors are Correct Answer become zero

Collected by Santosh. K

Page 53 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question The best way to reduce labour cost is to recruit cheap labour. Correct Answer False Question A' started business with cash Rs. 5,000/-, building Rs. 5,000/-, furniture Rs. 2,000/-. What is the total amount of capital? Correct Answer Rs. 12,000 Question Income Tax Act, recognise only one method of depreciation namely ________. Correct Answer Written down value method Question An adjustment relating to outstanding expenses will ________ the net profit. Correct Answer Decrease Question Generally, all real accounts will have a ________ balance Correct Answer Debit Question The present unit cost data for a product is as follows: selling price Rs.15/-, variable costs Rs.8/-. If selling prices are reduced by 10% and variable costs are increased by 12.5%. Which of the following is the amended contribution to sales ratio? Correct Answer 0.333 Question The selective ________ controls are intended to control the ________ to particular sectors without affecting the total credit, and also to change the composition of credit from undesirable to de Correct Answer credit Correct Answer credit flows Question Journal is popularly known as 'Book of . . . Correct Answer Original Entry Question Presentation of information to enable managerial decision making' is one of the objects of which of the following Correct Answer Cost Accounting Question The principle of ________ is followed while preparing the financial statements. Correct Answer Going concern Match The Following Question

Correct Answer

Indirect Material

Element wise classification

Administration overheads

Function wise classification

Fixed overheads

Variability wise classification

Collected by Santosh. K

Page 54 of 97

SCDL – Management Accounting Abnormal overheads

PGDBA – I Semester Normality wise classification

Question In India the gas industry and electricity industry, and ________ industry are examples of industries using the uniform costing system. Correct Answer fertilizer Multiple Choice Multiple Answer Question Ram and Laxman are partners of Kush & Bros. As on 1st April, 2003 Ram's capital is Rs.50,000/- and Laxman's capital is Rs.80,000/-. If interest on capital is to be provided @ 10% p.a., what will be the amount of capital of each of the partners as on 31st March, 2004, assuming there were no additions during this period? Also, state the treatment of this item in the Profit and loss account. Correct Answer Ram's capital Rs.55,000/- , Laxman's capital Rs.88,000/- , Interest on capital should be debited to the Profit and loss account Question Non-trading income is disclosed on the credit side of ________ account. Correct Answer Profit and loss Question Goods returned to the suppliers from whom it was ________d is recorded in the Purchase return register. Correct Answer Purchase Question An advertisement contract was made with an artist which stated that the remuneration will be 12% of net sales. On an average the monthly sales were Rs.36,000/-, however the average rate of sales return was 5% of that month's sale. Find the expenditure on account of advertisement. Correct Answer Rs.49,248/Question Goods kept in the godown were destroyed by fire on 18th June, 2004. The cost of such goods was Rs.18,950/-. The goods were not insured. Find the amont which should be debited to the profitability statement. Correct Answer Rs.18,950/Question Generally speaking income represents wealth increase and business success; higher the income, lower will be the success of a business. Correct Answer False Question While preparing the bank reconciliation statement as on 31st March, 2004 you find the following discrepancy : 'a cheque of Rs.3,700/- received and deposited in bank on 27th March, 2004 was entered credited in the pass book on 3rd April, 2004.' In this background, which of the following statement holds true as on 31st March, 2004? Correct Answer Balance as per pass book < Balance as per bank book Question Bank reconciliation statement is a systematic presentation of errors made by the accountant. Correct Answer False Question

The stores department is a ________ department.

Collected by Santosh. K

Page 55 of 97

SCDL – Management Accounting Correct Answer

PGDBA – I Semester

Service

Question The ________ is a perpetual inventory record. Correct Answer Bin card Question Selecting an appropriate method of valuation of inventory is important because : Correct Answer It influences the figure of gross profit Question Re-order level for materials is determined considering maximum consumption and maximum delivery period. Correct Answer True Question Under some circumstances, it may be advisable to sell at prices equal to or below the marginal cost ignoring fixed cost. Correct Answer True Question Economical use of labour, materials and facilities can achieved with the help of ________. Correct Answer Budgetary control Question Select the advantages of standard cost system. Correct Answer Provides reliable basis for budgeting , Facilitates delegation of authority , Promotes economy and efficiency Question Which variance is used to analyse the effect of change in the quantity of output from a given mix of inputs? Correct Answer Materials yield variance Question Judge the statement according to the criteria given : ' The accounting period for XYZ Ltd. ends on 31st December, 2003. It is noted that office rent for the month of December, 2003 is paid on 15th January, 2004. "According to concept of matching expenses with the revenues, this expenditure should be recorded in the books of accounts in January, Correct Answer The statement and its reason are both incorrect Question From the following select the examples of errors of commission Correct Answer Sales recorded in the sales register as Rs.2,020/- instead of Rs.2,200/- , Received cash from Sham, credited to Ram's account , Paid transport charges, credited to transport charges account Question Expenditure on income-tax is an example of ________. Correct Answer non-operating expenditure Question Identify the items which are correctly classified. Correct Answer Carriage inward - Factory overheads , Carriage outward - Selling and distribution overheads , Sales research expenses -Selling and distribution overheads Question

Select the items which may be classified as administration overheads.

Collected by Santosh. K

Page 56 of 97

SCDL – Management Accounting Correct Answer

PGDBA – I Semester

Depreciation on office furniture , Director's remuneration , Telephone expenses

Question Overhead absorption is an exercise by which overhead is properly spread over production for the period. Correct Answer True Question Which system involves adoption of same costing principles, practices and procedures by the individual firms of an industry ? Correct Answer Uniform costing Question A new computer worth Rs.35,000 was purchased on 18th June, 2003. The company has 10 such computers costing Rs.20,000/- each. The depreciation is charged @ 18% p.a. Find the depreciation on computers to be charged for the year. Correct Answer Rs.40,953.70 Question The amount of income for the current period which is not received during the current period, is called Accrued Income. Correct Answer True Question The balance as per bank book as on 30th June, 2004 is Rs.10,298/- while the balance as per pass book as on the same date is Rs.10,123.60. Select the transactions representing the reasons for this difference. Correct Answer Interest credited by bank, not entered in the bank book, Rs.125.60 , Cheques dishonoured not entered in the bank book Rs.200/- , Debit side of the cash book is overcast by Rs.100/Question The principal functions of the cost accounting department are : Correct Answer Classifying labour cost according to jobs, processes, etc. , Preparation of different reports based on direct, indirect labour cost, etc. , To focus on areas where labour cost may be reduced. Question Profit volume ratio is also known as ________. Correct Answer Contribution to sales ratio Question Margin of safety = Contribution / Profit volume ratio Correct Answer False Question Depreciation, interest and property tax continue even when the operations are discontinued. Correct Answer True Question The reasons and objectives of budgets may be stated as : Correct Answer To aid the planning of annual operations , To communicate the organisational plans to the different departments , To motivate the managers to strive for attainment of the organisational goals Question The key factor determines the : Correct Answer Level of activity , Capacity utilization , Level of sales

Collected by Santosh. K

Page 57 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question Essentials for effective implementation of budgetary control system are Correct Answer Commitment of top management , Clearly defined objectives , Continous budget education Question Which of the following is a correct definition of the key factor? Correct Answer The factor which limits the activites of the undertaking Question The integrated form of all functional budgets is known as : Correct Answer Master budget Question For the month of November, a firm has budgeted sales of 20,000 units of X at a price of Rs.10/- and sale of 30,000 untis of Y at a price of Rs.6/- per unit. Actual sale during the month was 35,000 units of X at Rs.9/- per unit and 25,000 units of Y at Rs.8/- per unit. Calculate sales volume variance, sales mix variance and sales quantity variance. Correct Answer Sales volume variance -Rs.120,000/- (Favourable) , Sales mix variance -Rs.44,000/(Favourable) , Sales Quantity variance-Rs.76,000/- (Favourable) Question ________ variance represents the over or under utilisation of pland and machinery. Correct Answer Capacity Question The following data relates to the month of October : Actual variable overheads Rs.60,000/-; budgeted variable overheads Rs.80,000/-; actual output 900 units; budgeted output 1,000 units; standard time for one unit - 2 hours. Calculate variable overhead efficiency variance. Correct Answer Rs.4,000/- (Favourable) Question Which of the following operations would normally be carried out first when preparing a master budget? Correct Answer Determining the budget period Question Interest on capital is an allowable expenditure for parntership firms, as per the provisions of the ________ . Correct Answer Income Tax Act, 1961 Question Mixers Ltd. is engaged in producing a standard mix using 60kg of chemical X and 40 kg of chemical Y. The standard loss of production is 30%. The standard price of X is Rs.5/- per kg.and of Y Rs.10/- per kg. The actual mix and yield were as follows : X - 80 kg @ Rs.4.50 per kg; Y - 70 kg @ Rs.8/- per kg. Actual yield - 115 kg.Compute material yield variance. Correct Answer Rs.100/- (Favourable) Question Select the examples of functional budgets: Correct Answer Sales budget , Production budget , Research and development budget Question Sita and Gita are partners of SGL & Co. As on 1st August, 2003 Sita's capital stood as Rs.10,000/- and Gita's capital as Rs.18,000/-. If interest on capital is to be provided @ 10% p.a., what

Collected by Santosh. K

Page 58 of 97

SCDL – Management Accounting

PGDBA – I Semester

should be the treatment of this interest in the profitability statement, assuming there were no additions to capital during this period? Correct Answer Profit and loss account should be debited with Rs.1,866.67 Question KDL Ltd. charges depreciation @ 20% on written down value method. The net book value of its machinery on 1st January, 2003 was Rs.125,000/-. What will be the net book value of its machinery on year end, i.e.31st December, 2003, assuming there were no additions or disposals during the year? Correct Answer Rs.100,000/Question Standard costing is always accompanied by a system of budgeting but budgetary control may be operated in business where standard costing is impracticable. Correct Answer True Question An amount of Rs.200/- is received from P and is credited to Q. The rectification entry would affect ________ Correct Answer P's A/c and Q's A/c Question Budgetary control system provides a basis for establishment of the incentive systems. Correct Answer True Question A fixed budget is useful only when the actual level of activity corresponds to the budgeted level of activity. Correct Answer True Question A low margin of safety indicates ________ fixed overheads. Correct Answer higher Question Category A items, as per ABC analysis, represent ________ % of the total number of items in inventory. Correct Answer less than 10 Question The gross profit transferred from the trading account is Rs.98,999/-. The expenses debited to the profit and loss account are salary Rs.12,000/-; advertisement expenses Rs.18,000/-; printing and stationery Rs.5,500/- and managing director's incentive Rs.28,000/-. It was noted that no entry was made for salary of one month which was due but not yet paid. Find the net profit of the company. Correct Answer Rs.34,408.09 Question Price based on Uniform Costing may be taken to be reliable and representative of the whole industry. Correct Answer True Question The budget manual must contain statement regarding: Correct Answer Objectives of the orgainsation Question Annual subscription paid by bank to the Chamber of Commerce on 31/03/04, as per the standing instructions, and advise sent thereafter, may lead to:

Collected by Santosh. K

Page 59 of 97

SCDL – Management Accounting Correct Answer

PGDBA – I Semester

Balance as per bank book > Balance as per pass book

Question Entry for dishonour of cheque appears only in the pass book, this entry should be ________ in the bank book. Correct Answer Passed Question Since the pass book and the bank book record the ________ transactions, the bank balance as per these books should be equal. Correct Answer Same Question A pre-determined factory overhead rate holds up product costing. Correct Answer False Question Rent of Rs.7,500/- for the month of April was received in March. Which account should be credited in the books of accounts for making an entry for receipt of the said amount? Correct Answer Rent received in advance account Question Bank reconciliation statement can be prepared on weekly basis. Correct Answer True Question Amit sold Goods to Atul for Rs. 50,000/- on cash & Rs. 50,000/- on credit basis. Amit allowed 10% discount for on the spot transaction. What is the amount that should be debited to the cash account? Correct Answer Rs.45,000/Question Financial Accounting ______________ Correct Answer Designed to supply information for internal/ external uses. , Deals with the transaction during specific period. , It is compulsory Question Cost Accounting ______________. Correct Answer Concerned with specific activities. , Classified according to their nature. , It deals with both i.e. past & present. Question Features of double entry accounting system are . . . Correct Answer Every business transaction has two elements , When business receives something, it has to pay something , Every debit has a corresponding credit Question Features of a cost sheet are as follows Correct Answer Indicates the total cost of production during a given period , Indicates the unit cost of production during a given period , Helps the management in fixing the selling price to be quoted for the Question Depreciation charged on office furniture on straight line basis is an example of ________. Correct Answer Administration overheads Question If Rs.15,000/- has been paid to Kargil Relief Fund as the owner's personal contribution, ________ account should be debited in the books of accounts of the business.

Collected by Santosh. K

Page 60 of 97

SCDL – Management Accounting Correct Answer

PGDBA – I Semester

Drawings

Question Included in the trial balance is the sales promotion suspense account with a debit balance of Rs.6,300/-. It is given that this balance should be written off. Calculate its impact on profit of the company. Correct Answer The net profit will decrease by Rs.6,300/Question A lathe machine was purhcased on 31st March, 2004 for Rs.65,000/-, however it was installed only on 5th April, 2004. The depreciation is charged @ 15% p.a.. Find the amount of depreciation charge for the said lathe machine for the year ended 31st March, 2004. Correct Answer Nil Question While passing the journal entry, it is of utmost importance to ensure that the total of amount debited is equal to the total of the amount credited. Correct Answer True Question The bin card and stores ledger, being independent records, comparison of these two records should be avoided. Correct Answer False Question The cost of idle time incurred by employees that is considered normal for the production process should be charged to : Correct Answer Factory overheads Question The cost of abnormal time may be recovered by inflating the hourly labour rate. Correct Answer True Question ABC Ltd. is planning to sell 200,000 units of product B. The fixed costs are Rs.400,000/and the variable costs are 60% of the selling price. In order to realize a profit of Rs.100,000/-, the selling price per unit would have to be : Correct Answer Rs.6.25 Question In which of the following situations, the flexible budget should be preferred? Correct Answer Sales are too difficult to predict , Supply level of input cannot be predicted , Varying levels of production activity Question The budget that represents the funds investment for expansion, diversification, etc. is known as ________. Correct Answer Capital expenditure budget True/False Question Amortization of goodwill should be considered while preparing cash budget. Correct Answer False Question As cost centers facilitate the control function, in many cases, they are termed as . . . Correct Answer Responsibility centers

Collected by Santosh. K

Page 61 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question Lata and Tara are partners of Latara & Co. As on 31st March, 2004 Lata's annual drawings were as Rs.25,000/- and Tara's annual drawings amounted to Rs.18,000/-. If interest on drawings is charged @ 15% p.a., what is the amount of income for Latara & Co.? Correct Answer Rs.6,450/Question Labour turnover rate is best defined as : Correct Answer The number of leavers replaced divided by the average of employees on the payroll Question Which system provides an opportunity to companies to adopt the one best method of cost accounting system known to the industry ? Correct Answer Uniform costing Question An order for goods worth Rs.18,000/- was placed on 25th March, 2004. The goods were received on 1st April, 2004. Calculate the impact of this transaction on the final statements of accounts for the year ended 31st March, 2004. Correct Answer The net profit will not be affected Question Interim dividend paid by the company should be debited to the profit and loss appropriation account. Correct Answer True Question The short run financial plan which acts as a guide to achieve the predefined targets is known as ________. Correct Answer Budget Question Indirect Cost is termed as ________. Correct Answer Overhead Question Interest on ________ is credited to Capital account. Correct Answer Capital Question The effect of price reduction is always reduction in the margin of safety and also reduction in the break even point. Correct Answer False Question Which of the following is likely to be a contributory factor to the incidence of excess expenditure on material cost? Correct Answer The level of control of the used of material in the production cycle , The incorrect choice of purchase order quantity , Failure to control the issue of materials from stores Question Accounting is the art where transactions are … Correct Answer Summarized , Classified , Recorded Question If excess of cash is estimated in the cash budget, it may be possible to utilise it to give bonus to the employees.

Collected by Santosh. K

Page 62 of 97

SCDL – Management Accounting

PGDBA – I Semester

Correct Answer False Question The operating profit as per cost statement may differ from the profit as per Profit and Loss Account due to existence of Correct Answer Depreciation on plant and machinery , Interest on loans taken from other , Interest on loans granted to others Question Any amount of profit earned in the past which is not distributed to the owner, belongs to the creditors. Correct Answer False Question Management accounting is concerned with the following activities : Correct Answer Decision making , Safeguarding assets , Planning and controlling activities Question Budgeted profit and loss account and budgeted balance sheet are also known as ________. Correct Answer Master budget Question A grinding machine is an example of impersonal cost centre Correct Answer True Question Piece rate systems are very useful in the following circumstances: Correct Answer Units of output are measurable , Job is standardised , The flow of work is regular Question The process of recording the business transactions in a defined set of records is referred to as ________. Correct Answer Balance sheet Question A ________ inventory turnover period indicates efficient utilisation of material. Correct Answer Low Question Purchased 200 shares of Bharat Forge Ltd. for Rs.850/- per share, which account should be debited? Correct Answer Investment account - Rs.170,000/Question The data for two materials P and Q is given below : Material P : opening stock Rs.80,000/-; closing stock Rs.40,000/- and purchases Rs.500,000/-. Material Q : opening stock Rs.170,000/-; closing stock Rs.60,000/- and purchases Rs.750,000/-. Identify which of the given statements relevant to the data given are correct. Correct Answer Inventory turnover period for material P is 40.5 days , Material P is faster moving material , Consumption of material Q is Rs.860,000/Question Overhead absorption rate will be different at different capacity levels. Correct Answer True Question Under Differential Time Rate method payment is made at Rs. 1.40 per hour when the level of efficiency is between________.

Collected by Santosh. K

Page 63 of 97

SCDL – Management Accounting

PGDBA – I Semester

Correct Answer 90% to 100% Question The alternative courses of action for an integrated textile mill are: Correct Answer Sell cloth Question The Ezee Company Ltd. plans to sell 108,000 units of product E in first quarter of 2004, 120,000 units in second quarter of 2004, 132,000 units in third quarter of 2004, 156,000 units in fourth quarter of 2004and 138,000 units in the first quarter of 20 Correct Answer 153,000 units Question The selection of ________ may depend upon the various factors like characteristics of the business organisation, tax considerations, statutory requirements etc. Correct Answer Accounting period Question Furniture account will always have a ________ balance. Correct Answer Debit Question Product costs under direct costing include: Correct Answer Prime cost and variable factory overheads Question Uniform costing may lead to monopolistic conditions within the industry, prices may be raised and customers may suffer. Correct Answer True Question Items debited to Profit & Loss Account are… Correct Answer Salary , Discount allowed , Postage & telegram Question Select the entries which need to be rectified Correct Answer Purchase A/c ......... Dr. to Damodar's A/c (Being furniture purchased from Damodar) , Gopal's A/c ........... Dr. to cash A/c (Being entry for payment of railway freight for goods purchased) , Cash A/c ............Dr. to Suresh's A/c (Being cash received from Suresh for goods sold to him for) Question The bank book shows an overdraft of Rs.117/- as on 31st December, 2003. It is found that the pass book is debited with Rs.11/- representing a dishonoured cheque, originally received from Mr.A. The fact of dishonour was not recorded in the bank book. Find the balance as per pass book. Correct Answer Rs.128/- (overdraft) Question Identify the fixed expenses from the following. Correct Answer Rent and taxes of the factory , Wages paid to indirect workers like cleaners, helpers,etc. , Salary paid to factory supervisor Question Budgetary control is one of the techniques of management accounting. Correct Answer True Question Management Accounting is a developed stage of Cost Accounting Correct Answer True

Collected by Santosh. K

Page 64 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question In the ledger account only credit entries relating to a particular account are posted. Correct Answer False Match The Following Question Correct Answer Global Tender

Any supplier from the global market can fill the tender

Single Tender

Tender from only one supplier

Limited Tender

Tenders from reliable but few suppliers

Open Tender

Any supplier from the local market can fill the tender

Question Fixed overhead variances may be calculated either on the basis of units of output or on the basis of standard hours. Correct Answer True Question Features of Taylor's differential piece rate system are as follows : Correct Answer Minima clerical work is involved in calculating the wages , Helps in building up an efficient labour force , Strong incentive to efficient and ambitious workers. Question Financial Accounting discloses the financial performance & Financial status of the business as a whole Correct Answer True Question Cost Accounting is a legal requirement. Correct Answer False Question Cash account can have a credit balance. Correct Answer False Question Labour turnover means : Correct Answer Influx and exit of employees , Quantitative measurement of instability of working force , Rate of change in the average working force Question Financial Statements which are generated as a result of the management accounting report & financial performance of the organization as a whole. Correct Answer False Question The half-yearly sales of product X are as follows : 1st half -30,000 units; 2nd half - 37,500 units. The production pattern of the company is based on 80% of the sales of the current six months and 20% of the budgeted sales of the next six months. Calcu Correct Answer 1st half -31,500 units; 2nd half - 30,000 units

Collected by Santosh. K

Page 65 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question The variance which denotes the variation in overhead recovery due to the budgeted quantity of products being greater or less than actual production, is known as ________ variance. Correct Answer Volume Question As per the provisions of Section 209 of ________, all the company form of organisation is legally required to follow the mercantile or accrual system of accounting. Correct Answer The Companies Act, 1956 Question Cost Accounting and Management Accounting are similar to each other in many respects. Correct Answer True Question The reports generated by financial accounting are meant for the use by management for effective decisions. Correct Answer True Question Token or disc method is a related to the system of ________. Correct Answer Time-keeping Question Cost Accounting may be considered to be a part of management Accounting. Correct Answer True Question The ________ variance is the difference between the actual variable overhead incurred and the standard variable overhead charged to production. Correct Answer Total variable overhead Question It is said that marginal costs are used primarily in guiding decisions that are yet to be made. Correct Answer True Question Management Accounting is not at all a legal requirement Correct Answer True Question Identify the variable expenses. Correct Answer Repairs of plant when it is undertaken by an outside agency , Carriage inward by hired carriers , Wages paid to casual workers Question Which of the following cost is also termed as Prime Cost ? Correct Answer Direct cost Question The method of remuneration under which the workers are given in share in profits of the organization, at a specified percentage, along-with their wages, is known as ________ method. Correct Answer Profit-sharing Question Select the appropriate rectification entries for the following transactions (i) Rs.200/- received in respect of a bad debt previously written off was credited to Debtors account. (ii) Paid Rs.6,000/- to a Mr. Rao, clerk, as salary in lieu of notice. This amount was debited to his personal account (iii) Interest @ 5% p.a. on a loan of Rs.5,000/- was debited to general expenses account.

Collected by Santosh. K

Page 66 of 97

SCDL – Management Accounting

PGDBA – I Semester

Correct Answer Debtors A/c ..........Dr. Rs.200/- to bad debts recovered A/c Rs.200/- , Rs.6,000/- to Rao's A/c Rs.6,000/- , Rs.250/- to General Expenses A/c Rs.250/Question Quantify the increase in profit on account of following errors : (a) Repairs of furniture amounting to Rs.2,000/- were debited to furniture account. Furniture is depreciated @10% p.a. (b) Interest received on bank deposits was credited to dividend received account, Rs.1,550/- (c) A television purchased for the managing director's office for Rs.45,000/- was debited to Interior decoration expenses. Correct Answer Rs.43,200/Question The analysis which is also referred as 'what if' analysis is known as________. Correct Answer Cost volume profit analysis Question The balance sheet has three columns, viz. assets, liabilities and ledger folio. Correct Answer False Question The various areas in which uniform costing can be adopted are . . Correct Answer Valuation of inventories , Charging of depreciation , Apportionment of overheads Question The varinace that attempts to ascertain the effect of change in sales volume on the difference between actual and budgeted contribution is known as ________ variance. Correct Answer Sales margin volume Question Depreciation is caused by use factor, obsolescence and ________. Correct Answer Time factor Question Depreciation under Reducing Balance Method is calculated as (Number of units * Rate of depreciation per unit) Correct Answer False Question All cash sales are recorded in the sales register. Correct Answer False Match The Following Question

Correct Answer

Transport facilities to employees

Preventive cost of labour turnover

Relationship between supervisor and worker

Avoidable cause of labour turnover

Dismissal of employee

Unavoidable cause of labour turnover

Increased spoilage and defectives

Replacement cost of labour turnover

Question Indirect material cost is an integral part of finished goods. Correct Answer False

Collected by Santosh. K

Page 67 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question Select the various methods adopted for treatment of under or over absorbed overheads Correct Answer Use of supplementary rates , Carrying over the amount to remaining period , Writing off to the Costing Profit and Loss Account Question It is difficult to apply Uniform costing system for an industry which has labour intensive companies as well as capital intensive companies, because : Correct Answer The cost structure is different Match The Following Question

Correct Answer

Normal Standards

Anticipated to be achieved in future

Basic Standards

Established for a longer period of time

Current Standards

Established for a shorter period of time

Expected Standards

Anticipated to be achieved in the budget period

True/False Question Trading account is an important account which will be used to analyze how successful and how efficiently the firm runs its business. Correct Answer True Question Loans which are borrowed from financial institutions are to be paid off in 8 years, should be disclosed as ________ in the balance sheet. Correct Answer Long term liabilities Question The gross profit for the year 2004 is Rs.184,326/-. The depreciation on furniture for the year is Rs.24,561/-; dividend received amounted to Rs.12,000/- and the director's remuneration worked out to be Rs.95,784/-. Find the net profit for the year 2004. Correct Answer Rs.75,981/Question The components of the selling and distribution cost budget are : Correct Answer Distribution expenses , Publicity expenditure , Salary of sales-office workers Question Select the correct statements. Ram's account…….Dr. Rs.10,000 To Bank account Rs.10,000 Correct Answer Ram is a creditor , Rs.10,000/- has been paid to Ram , The payment is made by cheque Question A written order sent to inform the purchasing department of a need for materials is called a ________. Correct Answer Purchase requisition note Question The overheads apportioned to three production departments A, B and C and two service departments P and Q are Rs.75,000/-; Rs.100,000/-; Rs.80,000/-; Rs.60,000/- and Rs.40,000/- respectively. Overheads of department P are shared by A, B, C and Q in the ratio of 4 : 3 : 2 : 1 and that of department

Collected by Santosh. K

Page 68 of 97

SCDL – Management Accounting

PGDBA – I Semester

Q are shared by A, B, C and P in the ratio of 3 : 3 : 2 : 2. Ascertain the total overheads of each production department. Correct Answer A -Rs.116,836/-; B -Rs.134,889/- and C -Rs.103,265/Question Re-order quantity may be measured as : Correct Answer Maximum stock level - re-order level + (minimum usage X minimum re-order period) Question If the total amount on the ________ side of commission account is more than the total of its credit side, the commission account is said to have a Debit balance. Correct Answer Debit Question An error of partial omission can be rectified by either debiting or crediting the ________ account, as the case maybe. Correct Answer suspense Question The final result disclosed by trading account is the ________profit earned by the organization. Correct Answer Gross Question Number of days inventory is held can be calculated by dividing number of days in a year by ________. Correct Answer Inventory turnover ratio Match The Following Question

Correct Answer

Total cost

Cost of finished goods

Non operating income

Profit on sale of investment

Selling and distribution overheads

Advertisement expenses

Factory overheads

Repair for factory building

Question The amount of profit which is retained by the organisation is transferred to 'Reserves and Surplus' in the balance sheet. Correct Answer True Question Purchase of national saving certificates by the company from its profits, should be debited to ________ account. Correct Answer Investments Question Calculate inventory holding period. Safety stock - 250 units; maximum stock - 6,500 units; reorder quantity - 3,800 units and material issued during 2003 is 24,000 units. Correct Answer 66.9 days

Collected by Santosh. K

Page 69 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question Material mix and material yield variance can be calculated even when only one raw material is used for production. Correct Answer False Question A factory has 8 hours a day and the standard daily wage is Rs.80/-. Standard output per hour is 5 units. During a day worker P produced 30 units, Q produced 36 units and S produced 42 units. Calculate wages payable to P,Q and S under Merrick Multiple Piece Rate System. Correct Answer P - Rs.60/-; Q - Rs.79.20; S - Rs.100.80 Question A company budgets for a production of 150,000 units. The variable cost per unit is Rs.14/and fixed cost is Rs.2/- per unit. The company fixes its selling price to fetch a profit of 15% on total cost. What is the break even point for the company? Correct Answer 68,182 units Question The organization chart shows the following aspects : Correct Answer Functional responsibility of different functional managers , Delegation of authority to various managers , Inter-functional relationships of these managers Question Select the correct formulae for calculating break even point. Correct Answer Fixed cost / (Selling price per unit - Variable cost per unit) , [Fixed cost / Marginal contribution] X Sales , [Fixed cost / (Fixed cost + Net Profit)] X Sales Question Select the transactions which can be entered in the Journal proper. Correct Answer Opening entries , Closing entries , Rectification entries Question The lowest profit volume ratio can be ________%. Correct Answer 0 Question Trading account is used to analyse how successfully and how efficiently the firm runs, particularly with regards to the maintenance of the gross profit margin. Correct Answer True Question Calculate the earnings of workers Monica and Sonica under Taylor's differential piece rate system. Hours in a day =8; normal rate per unit = Rs.12/-; standard time per unit = 30 seconds; rate differential : 80% of piece rate below standard, 120% of piece rate at or above standard. Monica produces 900 units per day and Sonica produces 1,100 units per day. Correct Answer Monica -Rs.72/-; Sonica - Rs.132/Question The factors that influence determination of budget period are : Correct Answer Type of budget, viz. Sales or capital expenditure budget , General economic conditions , Trade cycle of business Question Uniform costing system can be successfully implemented in any industry only when : Correct Answer Information is freely supplied by all the units , Well organised sector is ready to share the technological improvements , Information furnished by the units is complete and correct

Collected by Santosh. K

Page 70 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question In marginal costing, under and over absorption of fixed overheads is bound to arise. Correct Answer False Question Trade Discount refers to the discount . . . Correct Answer received on purchases Question A firm has monthly fixed cost commitment of Rs.200,000/-. It is producing only one product which is sold at a price of Rs.80/- per unit. Per unit variable cost is Rs.50/-. Calculate annual break even point. Correct Answer 80,000 units Question Cool-wind Ltd., manufactures fans, which at sold at Rs.400 pre piece. The cost of sales is composed of 40% of direct material, 30% wages and 30% overheads. An increase in material price by 25% and in wage rate by 10% is expected in the forthcoming year; as a result of which the profit at current selling price may dwindle by 39% of present gross profit. With the above information, you are required to determine the future selling price, if the present rate of gross profit is to be maintained. Correct Answer Rs.452/Question Credit balance in interest account indicates income for the organisation. Correct Answer True Question Money Measurement Concept__________________ Correct Answer Only those transactions and facts expressed in terms of money , This Concept imposes severe restrictions on the kind of information available from financial statements , Due to several restrictions it becomes drawback of financial accounting Question A started business with cash 5000, building 5000, furniture 2000, having depreciation of 10% on building. The total amount of capital comes to Rs. __________ Correct Answer 11500 Question The periodical total of sales book was cash short by Rs. 5000 for rectifying the same, which A/C to be debited Correct Answer Suspense A/C Question Following errors do not affect the trial balance Correct Answer Error of Principle , Error of Omission , Error of Commission Question A contractor’s bill for the extension of premises amounting to Rs. 2750 has been debited to building repair account Correct Answer False Match The Following Question

Correct Answer

Opportunity Cost

Cost can be controlled

Collected by Santosh. K

Page 71 of 97

SCDL – Management Accounting Differential Cost

Historical Cost

Sunk Cost

Cannot be controlled

Controllable Cost

Increase or Decrease in cost

Uncontrollable Cost

Return or yield

PGDBA – I Semester

Question Indirect material cost assist the manufacturing process is an integral part of finish goods. Correct Answer False Question Dividend received is a Non-operating Income. Correct Answer True Question A Co. having factory cost of Rs. 13,10,800. The administrative overheads are salaries 40,000, rent & rates 6400, Traveling expenses 12,400, Depreciation 2400, Directors fees 24,000, General Charges 2 Correct Answer 14,59,200 Question Factory overheads are termed as Correct Answer Production overheads , Works overheads , Manufacturing overheads Question The aims of perpetual inventory system are as follows Correct Answer Maintaining Bin cards , Maintaining store ledger , Continuous verification of physical stock Question These are the features of variable overheads Correct Answer vary directly in proportion to volume of output. , per unit cost remains the same , total overheads may increase or decrease as per volume of output. Question The ultimate incorporation of all functional budgets takes the form of budgeted Profit & Loss Account and Balance Sheet. Correct Answer True Question If during a month anticipated sales are 5,000 kg, opening stock is 1,000 kg and closing stock is 500 kg then what will be the quantity of production Correct Answer 4,500 kg Question The treatment of ________ time in cost accounting depends upon the distinction between normal and abnormal time. Correct Answer Idle Question Budgeted profit and loss account and budgeted balance sheet are also known as ________. Correct Answer Master budget Question Differential cost analysis is incorporated in the cost books. Correct Answer False

Collected by Santosh. K

Page 72 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question The process of recording attendance time of the workers is known as time booking. Correct Answer False Question Factory light, telephone expenses are examples of ________ expenses. Correct Answer Indirect Question For successful implementation of uniform costing system, it is very essential to devise ________, containing recommended cost accounting plan and procedures. Correct Answer cost manual Question The combination in which different products are sold by a company is known as ________. Correct Answer Sales mix Question Which of the following is usually prepared daily by employees for each job worked on? Correct Answer Job card Question Profit = Profit volume ratio X Margin of safety Correct Answer True Question The management of Horngreen Ltd. is deciding whether to continue working at loss or to temporarily shut down the factory. State the qualitative aspects that must be considered before arriving at a decision. Correct Answer Loss of trained personnel , Loss of regular customers , Expenditure required to restart the factory Question Locate the error and its features in the following Correct Answer Compensating errors , Trial balance will not be affected , Trial balance will be affected Question Rs.2,650/- were paid to ABC Ltd. for maintenance of machine; which account should be debited for this transaction? Correct Answer Maintenance of machine account Multiple Choice Multiple Answer Question Which of the formulae can be used to calculate profit volume ratio :Correct Answer Change in contribution / Change in sales , 1 - (Change in variable cost / Change in sales) , (Fixed cost + Profit) / Sales Multiple Choice Multiple Answer Question International Motors manufactures crankshafts for jeeps and trucks. They have furnished the following particulars for the quarter ended 31st March : Materials Rs.298,000/-; direct wages Rs.42,000/-; store expenses Rs.20,000/-; machinery maintenance Rs.4,600/-; depreciation Rs.22,300/-; staff welfare Rs.12,000/-; general expenses Rs.30,000/-; administration and selling expenses Rs.27,000/-. Additional information provided by them : Production 300 numbers of jeep and 400 trucks; material cost

Collected by Santosh. K

Page 73 of 97

SCDL – Management Accounting

PGDBA – I Semester

ratio per vehicle between jeep and truck is 1 : 2. Direct labour ratio per vehicle for jeep and truck is 2 : 3. Machine hour ratio per vehicle for jeep and truck is 1 : 2. Select the statements which are true and correct. Correct Answer Cost per crankshaft for jeep is Rs.445.45 , Cost per crankshaft for truck is Rs.805.66 , General expenses should be apportioned on direct labour ratio Multiple Choice Single Answer Question The direct material usage budget and direct material purchase budget differ because of which of the following? Correct Answer A planned change in the level of material stock Multiple Choice Multiple Answer Question Plant and equipment can become a key factor in the following circumstances :Correct Answer Limited capacity due to lack of capital , Insufficient capacity due to shortage of space , Limited number of hours for which the plant can be used Multiple Choice Multiple Answer Question Select the accounts to be disclosed on the liability side of the Balance sheet :Correct Answer Loan , Outstanding expenses , Creditors Select The Blank Question The ________ books are preferred when the volume of transactions is very large. Correct Answer Subsidiary Select The Blank Question ________ is any documentary evidence to justify that a particular transaction has taken place. Correct Answer Voucher Select The Blank Question The final result disclosed by Profit & Loss Account is the ________ profit after taxes earned by the organization. Correct Answer Net True/False Question Receipts and payments method of cash budget is useful for preparing long term estimates. Correct Answer False Multiple Choice Single Answer Question The Asian Industries specialises in the manufacture of small capacity motors. The cost structure of a motor is as under : Material Rs.50/-; labour Rs.80/-; variable overheads 75% of labour cost. The fixed overheads of the company amount to Rs.240,000/- per annum. THe sale price of the motor is Rs.230/- each. Determine the number of motors that have to be manufactured and sold in a year in order to break-even. Correct Answer 6,000 motors

Collected by Santosh. K

Page 74 of 97

SCDL – Management Accounting

PGDBA – I Semester

True/False Question The purpose of profit and loss account is to brign together information which relates to gross profit and the expenses for running the business. Correct Answer True True/False Question If the storage cost of inventory increases, then the economic order quantity also increases. Correct Answer False Multiple Choice Single Answer Question The reporting method used in the costing system should be based on the principle of Correct Answer Management by exception Multiple Choice Single Answer Question XYZ Ltd. has a profit volume ratio of 40%. By what percentage should sales be increased to offset 20% reduction in selling price, so that the existing profit remains intact. Correct Answer 0.6 Multiple Choice Single Answer Question A company manufactures and sells four products, viz. A, B, C and D. The details are as follows : Profit volume ratio:-Product A- 20%, Product B- 40%, Product C-25%, Product D-18%; Incremental rupee sale for each Rupee spent on advertisement:-Product A- Rs.11/-, Product B-Rs.6/-, Product C-Rs.12/-, Product D-Rs.10/-. Amount of advertisement available is only Rs.5,000/-. Correct Answer Product B True/False Question Match Correct Answer True Multiple Choice Single Answer Question An analysis of the time card of a worker on a machine shows that of the total 48 hours, he worked 45 hours (including 4 hours overtime) on production and that 3 hours was idle due to machine break-down. The rate of the worker is rupees ten per hour : but overtime is paid at 50 per cent extra. You are required to calculate the earnings of the worker. Correct Answer Rs.500/Select The Blank Question In case of seasonal industry, the budget period may be taken as ________. Correct Answer One season Multiple Choice Single Answer Question The standard derpartmental overhead rate is Rs.15/- per hour. Based on the following details, work out the activity level at which the overhead rate has been pre-determined. Activity level : 600 hours; overhead allowance Rs.12,000/-. Activity level : 800 hours; overhead allowance Rs.14,400/-. Activity Correct Answer 1,600 hours

Collected by Santosh. K

Page 75 of 97

SCDL – Management Accounting

PGDBA – I Semester

True/False Question The total of the direct costs are termed as overheads. Correct Answer False Multiple Choice Single Answer Question Amit purchase of Rs. 6710 had been posted to the debit of the creditors A/C as 6170 rectifying the transaction the creditor A/C is to be debited amount to Rs Correct Answer 540 True/False Question Market price may be treated as latest purchase price, realisable price or replacement price Correct Answer True True/False Question Office and administration overheads consists of all overhead costs incurred from procurement of material till the stage of selling the final product. Correct Answer False True/False Question Sold goods to Ajay on credit Rs 10,000/- Ajay account to be credited Correct Answer False True/False Question Goods lost by fire firstly transfers to Trading Account credit side & corresponding amount is debited to P&L account. Correct Answer True Multiple Choice Multiple Answer Question A manufacturer uses 200 units of component every month and he buys them entirely from outside supplier. The order placing and receiving cost is Rs. 100 and annual carrying cost is Rs. 12. Calculate Ec Correct Answer 200 units Select The Blank Question Due to compensating errors the ________ accuracy of the trial balance ________ affected Correct Answer arithmetical Correct Answer doesnot Select The Blank Question Preventive costs of labour turnover are ________ and ________ . Correct Answer welfare activities Correct Answer medical services Multiple Choice Multiple Answer Question Basic three steps in Standard Costing are

Collected by Santosh. K

Page 76 of 97

SCDL – Management Accounting Correct Answer

PGDBA – I Semester

Setting standards , Comparing actuals with standards , Measurement of variance

True/False Question If the excess quantity is already billed in the invoice, it will be approved and paid. If not Debit note may be issued to the supplier for amending the amount. Correct Answer False Multiple Choice Single Answer Question A proprietor purchase goods worth Rs. 5500 & cash account credited to Rs. 5000 rectification of the suspense accounted debited to Rs Correct Answer 500 Multiple Choice Single Answer Question Depreciation charged on land & building, first debited to Profit & Loss A/C. and then to be --------------------Correct Answer Deducted from land & building Select The Blank Question One of the limitations of the budgetory control is that it ________. Correct Answer is an expensive affair Multiple Choice Multiple Answer Question Features of real account are . . . Correct Answer Mainly deals with items which are having physical , Consists of some intangible assets , examples include - Lane, Building, Vehicles Select The Blank Question A trading concern will have only ________ overheads and selling overheads. Correct Answer administration Select The Blank Question ________ is an example of intangible asset. Correct Answer Goodwill Multiple Choice Single Answer Question Uniform costing system is useful in the following areas Correct Answer Classification of cost accounts Multiple Choice Single Answer Question Mr.X has Rs.200,000/- invested in his business firm. He wants a 15% return on his money. From an analysis of recent cost figures, he finds that his variable cost of operating is 60% of sales, his fixed costs are Rs.80,000/- per year. Mr.X estimates that even if he closed the doors of his business, he would incur Rs.25,000/- as expenses per year. At what sales would he be better off by locking his business up. Correct Answer Rs.62,500/-

Collected by Santosh. K

Page 77 of 97

SCDL – Management Accounting

PGDBA – I Semester

Multiple Choice Single Answer Question The budgeted level of activity of the production department of Style India Ltd. is 5,000 hours per period. From the given information find the cost for 3,500 hours per period. Indirect wages Re.0.40 per hour; Correct Answer Rs.2,480/Select The Blank Question Normally, the planning for dividend payments and interest payments is based on the ________ budget. Correct Answer Cash Multiple Choice Single Answer Question The statement, mainly applicable to company form of organization, which discloses the manner in which the profit after tax is distributed is known as: Correct Answer Profit & Loss Account Appropriation Account Select The Blank Question Generally, all real accounts will have a ________ balance Correct Answer Debit Multiple Choice Single Answer Question The alternative courses of action for an integrated textile mill are: Correct Answer Sell cloth True/False Question The problem of multiple key factors can be solved with the help of techniques like linear programming, operations research, etc. Correct Answer True True/False Question Fixed expenses will move up by jumps if the output exceeds the capacity. Correct Answer True Multiple Choice Single Answer Question Net book value of loose tools as on 1st April, 2003 was Rs.45,000/-. As on 31st March, 2004 the management felt that the real worth of these loose tools is only Rs.30,000/-. What can be done to achieve the desired reduction in the net book value of loose tools? Correct Answer By providing depreciation to the extent of Rs.15,000/Multiple Choice Multiple Answer Question Cost control procedure deals with : Correct Answer Establishment of plans , Comparison of actual and planed performance , Computation of variance Match The Following Question

Collected by Santosh. K

Correct Answer

Page 78 of 97

SCDL – Management Accounting Tool-room expenses

Direct labour hours

Power

Horse power of machine

Stores department

Number of material requisitions

Boiler house

Cubic feet of steam supplied

PGDBA – I Semester

Multiple Choice Single Answer Question The following data is extracted from the books of a manufacturing concern for the year 2003-04: Direct materials Rs.205,000/-; direct labour Rs.75,000/-; fixed overheads Rs.60,000/-; variable overheads Rs.100,000/- and sales Rs.500,000/-. Calculate the break even point if there is an increase of 10% in the fixed expenses. Correct Answer Rs.275,000/True/False Question Bank charges debited in the pass book represent clerical mistake on the part of the bank employees. Correct Answer False Multiple Choice Single Answer Question A worker completes a job in a certain number of hours. The standard time allowed for the job is 10 hours, and the hourly rate of wages is Rs.10/-. The worker earns at 50% rate a bonus of Rs.20/under Halsey plan. Find out his total earnings under the Rowan plan. Correct Answer Rs.84/Match The Following Question

Correct Answer

Dividend paid

Profit and loss appropriation account

Freight inwards

Manufacturing account

Sales

Trading account

Freight outwards

Profit and loss account

Multiple Choice Single Answer Question The credit sales are as follows : February Rs.180,00,000/-, March Rs.192,00,000/- and April Rs.108,00,000/-. 50% of credit sales are realised in the month following the sale, 30% in the second month following the sale and the balance in the third month f Correct Answer Rs.15,000,000/Multiple Choice Multiple Answer Question The disadvantages of supplementary overhead rates are:

Collected by Santosh. K

Page 79 of 97

SCDL – Management Accounting

PGDBA – I Semester

Correct Answer It can be determined only after the end of the accounting period , Defeats the basic concept of normal cost , Involves lot of clerical activity Select The Blank Question In the scheme of cost-________-profit analysis, an attempt is made to measure the variations of cost with volume. Correct Answer volume Select The Blank Question The ________ is of immense help in guiding the companies to operate their accounts on uniform basis. Correct Answer uniform cost manual Multiple Choice Multiple Answer Question The productive causes of idle time are : Correct Answer Instructions are not clearly given , Power failures , Machine breakdown Multiple Choice Multiple Answer Question The factors which influence the selection of the method for absorption of overheads are: Correct Answer Type of industry , Nature of products , Manufacturing process Match The Following Question

Correct Answer

Emerson's efficiency bonus system Actual hours X Hourly rate + Bonus percentage (Actual hours X Hourly rate) Piece rate system

Output X Wage rate per unit

Barth Premium system

Hourly Rate X (square root of Standard Hours X Actual Hours)

Time rate system

Attendance time X Hourly wage rate

Multiple Choice Single Answer Question If the overhead expenditure to be absorbed is the foreman's salary, the most appropriate basis for absorption would be : Correct Answer Direct labour hours True/False Question In case the standards are too difficult to achieve, they will provide additional incentive for improvement. Correct Answer False Multiple Choice Single Answer Question Standard cost specification per unit of product : 20 labour hours per unit @ Rs.22/- per labour hour.Actual production and labour cost : Actual production 300 units; time used in production

Collected by Santosh. K

Page 80 of 97

SCDL – Management Accounting

PGDBA – I Semester

-5,500 hours; Idle time -600 hours; time paid for-6,100 hours, total wages paid -Rs.146,400/- . Compute Idle time variance. Correct Answer Rs.13,200/- (Adverse) Multiple Choice Single Answer Question Details of budgeted and actual fixed overheads and output for the year 2004 are as follows : Budgeted fixed overheads -Rs.20,00,000/-; actual fixed overheads -Rs.21,50,000/-; budgeted output 40,000 units and actual output- 45,000 units. Compute the per unit standard rate for fixed overheads. Correct Answer Rs.50/Multiple Choice Single Answer Question In considering a special order situation that will enable a company to make use of presently idle capacity, which of the following costs would be irrelevant? Correct Answer Depreciation True/False Question Factory overheads consist of all overhead costs incurred from the stage of procurement of material till the production of finished goods. Correct Answer True Multiple Choice Multiple Answer Question The management of Dick Ltd. is deciding whether to buy component Y from the supplier, since the purchase cost is less than the manufacturing cost. State the non-financial aspects that must be considered before arriving at a decision. Correct Answer Reliability regarding quality of the material supplied by the supplier , Alternative use of labour of engaged in manufacturing component Y , Regularity of material supplies from the supplier True/False Question In marginal costing, decisions are guided by profit rather than contribution margin. Correct Answer False Multiple Choice Single Answer Question Select the factor which can prove to be a very crucial key factor in case of an oil refinary. Correct Answer Supply of crude oil Multiple Choice Multiple Answer Question The factors to be considered while preparing the direct materials budget are : Correct Answer Adequacy of material storing space , Availability of funds , Material in stores but reserved for specific purposes Select The Blank Question Excess direct labour wages will be disclosed by 'Direct labour________ variance'. Correct Answer Rate True/False

Collected by Santosh. K

Page 81 of 97

SCDL – Management Accounting

PGDBA – I Semester

Question The difference between sales and margin of safety is equal to budgeted sales. Correct Answer False Select The Blank Question A ________ note is prepared when excess material is returned to stores. Correct Answer Material returned Select The Blank Question The systematic process of identifying and reporting variance is known as ________. Correct Answer Variance analysis Match The Following Question

Correct Answer

[( Actual sales - Break even sales) ]/ Actual sales sales

Margin of safety as a percentage of actual

Fixed cost / Contribution margin ratio

Break even point

Fixed cost - (Sales X Profit volume ratio)

Profit

(Sales X Profit volume ratio) -Fixed cost

Loss

True/False Question Marginal costing rewards sales whereas absorption costing rewards production. Correct Answer True Select The Blank Question Dividend received on amount invested in shares is an example of ________. Correct Answer non-operating income Multiple Choice Single Answer Question The store-keeper should initiate action for the purchase of a material, when it reaches its : Correct Answer Re-order level Select The Blank Question Under-recovery of overheads implies that the profit will be________ to the extent of total under-recovered overheads. Correct Answer Increased Multiple Choice Single Answer Question Judge the statement in italics based on the criteria given. On 31st March, 2004 Sita Enterprises sent goods worth Rs.30,000/- on approval basis to Mr.Ram. These goods should be included in the closing stock as on 31st March, 2004 because the ownership is still with the seller, viz.Sita Enterprise. Correct Answer The statement and the reason both are correct

Collected by Santosh. K

Page 82 of 97

SCDL – Management Accounting

PGDBA – I Semester

Multiple Choice Single Answer Question Double entry system of accounting follows the principle of : Correct Answer Every debit has corresponding credit Multiple Choice Single Answer Question Where, in the final statements of accounts, should we disclosed the closing balance of income received in advance? Correct Answer Balance sheet - on the liability side True/False Question Bank reconciliation statement must be prepared before the preparation of profit and loss account and balance sheet. Correct Answer True True/False Question In differential cost analysis, decisions are taken by comparing the incremental revenue with differential costs. Correct Answer True True/False Question Due to compensating errors the arithmetical accuracy of the trial balance is affected. Correct Answer False Select The Blank Question A worker is paid a monthly salary of Rs.500/- alongwith a bonus of 50 paise per unit completed, this type of labour cost may be classified as ________ cost. Correct Answer Semi-variable Multiple Choice Single Answer Question Following data has been extracted from the records of a manufacturing company whose level of operations varies during different months. Minimum activtity : 30,000 machine hours and manufacturing overeheads Rs.400,000/-. Maximum activity : 80,000 machine hours and manufacturing overheads Rs.600,000/-. Determine the fixed and variable components of manufacturing overheads. Correct Answer Fixed overheads Rs.280,000/- and variable overheads Rs.4/- per machine hour Multiple Choice Single Answer Question You been informed that the carrying cost and ordering cost with best order size of 1,200 units is Rs.6,000/-. Unit cost of material is Rs.50/-. Annual storage cost per unit is 10% of the unit price of material. Ordering cost is Rs.240/- per order. Ascertain annual material requirement, assuming that at economic order quantity the total storage cost is equal to the total ordering cost. Correct Answer 15,000 units Select The Blank Question Graphically, fixed cost line will be ________ the 'x-axis'. Correct Answer Parallel to

Collected by Santosh. K

Page 83 of 97

SCDL – Management Accounting

PGDBA – I Semester

Select The Blank Question ________ variance arises when the mix of materials used in the production is different from the predetermined standard mix of operation. Correct Answer Materials mix True/False Question Standard costing is always accompanied by a system of budgeting but budgetary control may be operated in business where standard costing is impracticable. Correct Answer True Multiple Choice Single Answer Question Over which of the following costs is the management likely to have least control? Correct Answer Buildings insurance cost Select The Blank Question Loss of uninsured goods by fire was debited incorrectly to United India Assurance Company's account instead of debiting it to ________ account. Correct Answer Goods lost by fire Multiple Choice Single Answer Question The given data pertains to the month of April : Budgeted : Fixed overheads Rs.10,000/-; output - 5,000 units; standard time for one unit - 4 hours. Actual : Fixed overheads -Rs.10,200/-; output 5,200 units and actual hours worked - 20,100 hours. Calculate fixed overhead cost variance. Correct Answer Rs.200/- (Favourable) Multiple Choice Single Answer Question Mr. Oak, materials manager, spends 40% time in the factory and the remaining in office. If his annual salary is Rs.500,000/-, what amount should be charged as office overheads? Correct Answer Rs.300,000/Multiple Choice Multiple Answer Question Select the appropriate rectification entries for the following transactions (i) Rs.200/- received in respect of a bad debt previously written off was credited to Debtors account. (ii) Paid Rs.6,000/- to a Mr. Rao, clerk, as salary in lieu of notice. This amount was debited to his personal account (iii) Interest @ 5% p.a. on a loan of Rs.5,000/- was debited to general expenses account. Correct Answer Rs.6,000/- to Rao's A/c Rs.6,000/- , Rs.250/- to General Expenses A/c Rs.250/- , Debtors A/c ..........Dr. Rs.200/- to bad debts recovered A/c Rs.200/Select The Blank Question Adjustment entries always have ________ effects. Correct Answer Two Multiple Choice Single Answer Question M/s Vivek Enterprises has paid rent relating to the residence of Mr. Vivek, proprietor of Vivek Enterprises. This payment should be treated as :-

Collected by Santosh. K

Page 84 of 97

SCDL – Management Accounting

PGDBA – I Semester

Correct Answer Drawings Select The Blank Question The various contents of a uniform cost manual are organization, cost accounting system and ________. Correct Answer Presentation of information Multiple Choice Multiple Answer Question Which of the following information is included in the goods received note? Correct Answer Date of receipt of material , Quantity received , Description of goods Multiple Choice Single Answer Question In the trial balance prepared on 31st March, 2004, the insurance premium account had a debit balance of Rs.12,865/-. This amount is the premium of the policy which expired on 29th February, 2004. The policy has been renewed from 1st March, 2004 but the premium is not yet paid. Find the amount of insurance premium still payable as on 31st March, 2004. Correct Answer Rs.1,169.55 True/False Question All the properties owned by the business are collectively referred to as the assets of the business. Correct Answer True Multiple Choice Single Answer Question Which system provides an opportunity to companies to adopt the one best method of cost accounting system known to the industry? Correct Answer Uniform costing True/False Question Primary distribution is effected on the basis of service rendered to the service departments by the production departments. Correct Answer False Select The Blank Question Creche expenses may be appropriately apportioned on the basis of ________. Correct Answer Number of female workers True/False Question Debit Note is an intimation sent to person dealing with the business that his account is being credited for the purpose indicated therein. Correct Answer False Select The Blank Question Factory cost of a product is Rs.335,000/-, if the selling overheads are charged @ 25% of factory cost, then the amount of selling overheads should be Rs.________/Correct Answer 83750

Collected by Santosh. K

Page 85 of 97

SCDL – Management Accounting

PGDBA – I Semester

Multiple Choice Single Answer Question The following information relating to material X and its standard use for production has been extracted from the standard cost card: Price of material X = Rs.5/- per litre; consumption of X = 10 litres per unit of product. Data relating to actual material purchases and production during the period: Purchases of X = 4,000 litres; price paid for X =Rs.6/- per unit; actual production = 500units. Calculate material usage variance. Correct Answer Rs.5,000/- (Favourable) Multiple Choice Multiple Answer Question The suspense account has a debit balance of Rs.40,000/-. Select the transactions which are capable of nullifying this balance. Correct Answer Conveyance expenses of Rs.25,000/- were posted on the wrong side of the account. , Purchased computer worth Rs.28,000/- was recorded in the ledger as , The total of the purchase book was cast short by Rs.44,000/Multiple Choice Multiple Answer Question Items credited to Trading Account are :Correct Answer Sales , Goods lost by fire , Closing stock Multiple Choice Single Answer Question As on 31st March, 2004, it was decided to write off Rs.800/- of debtors as bad debts. Also, provision for bad and doubtful debts is to be made @ 5% and for discount on debtors @ 4%. Find the net amount of debtors to be disclosed in the balance sheet, if the total debtors before the aforesaid adjustments is Rs.98,623/-. Correct Answer Rs.89,214.58 Select The Blank Question If the time booked as per the job cards is less than the attendance time it indicates ________ during which the worker has not done any work though he was present in the factory. Correct Answer Idle time Multiple Choice Multiple Answer Question The process of accounting has three streams of accounting ---------------,--------and ----------------------. Correct Answer Financial Accounting , Cost Accounting , Management Accounting Multiple Choice Single Answer Question Select the information to be considered before installing a costing system :Correct Answer Labour intensity of the product Multiple Choice Single Answer Question The opening balance of cash account is Rs. 25,000/-, cash received from debtors Rs. 30,000/-, sold goods on cash basis amounting to Rs. 50,000/-, paid to creditors Rs. 20,000/-, purchase furniture Rs. 5000/-. What is the closing balance of the cash account? Correct Answer Rs. 80,000

Collected by Santosh. K

Page 86 of 97

SCDL – Management Accounting

PGDBA – I Semester

Multiple Choice Single Answer Question The installation and operation of ___________ accounting requires a very elaborate organizational structure and large number of rules & regulations Correct Answer Management

TO BE ANSWERED: (You can reply to me if you get the answers so that I can update the same) Where break even sales are Rs. 20000,fixed cost is Rs.10000and profit is Rs. 5000 then the margin of safety will be Rs. 10000 1500 15000 2000 Valuation of material uses the following methods FIFO and LIFO Average price method Market price Special price Goods distributed as free samples transfer to debit side of trading A/C . True / False In Citizen Ltd., Division X is a profit centre which produces three products, A, B and C. The details are as follows : External market price per unit:-Product A- Rs.48/-, Product B- Rs.46/-, Product C-Rs.40/-. Maximum external sales(units):-Product A- 800, Product B-500, Product C-300. Variable cost per unit:Product A- Rs.33/-, Product B- Rs.24/-, Product C-Rs.28/-. A-800 units; B-500 units; C-300 units A-800 units; B-250 units; C-200 units A-400 units; B-500 units; C-300 units A-400 units; B-800 units; C-300 units XYZ Ltd. has set up the following standards for variable production overheads : standard hours per unit -3 hours; standard variable overhead per hour -Rs.10/-. The actual data for the month is as follows : actual variable overheads incurred Rs.620,000/-; actual output -20,000 units and actual hours worked54,000 hours. Find variable overheads cost variance. Rs.20,000/- (Adverse) Rs.20,000/- (Favourable) Rs.60,000/- (Adverse) Rs.60,000/- (Favourable A firm is able to break even at 60% capacity with budgeted fixed cost of Rs.300,000/-, budgeted selling price Rs.20/- per unit and budgeted contribution Rs.6/- per unit. The firm can produce and sell at 90% capacity but it is estimated that in that case

Collected by Santosh. K

Page 87 of 97

SCDL – Management Accounting

PGDBA – I Semester

Rs.88,500/Rs.75,000/Rs.82,500/Rs.72,500/The annual variable production overheads of a factory are Rs.70,000/-. The production manager anticipates that in the next year, the production efficiency will decrease by 4%. Find out budgeted production overheads for the next year. Rs.72,800/Rs.78,200/Rs.72,916.67 Rs.79,216.67 XYZ & Co. is a partnership with X and Z as partners. The capital of X is Rs.58,000/- and that of Z is Rs.75,000/-. Interest on capital is charged @ 12% p.a. and interest on drawings is charged @ 5% p.a. The drawings of X totaled to Rs.15,000/- and that of Z totaled to Rs.12,000/-. The profit for the year after considering interest on capital and drawings is Rs.125,000/- and the profits are shared in the ratio of their capitals, i.e. 58 : 75. Find the balance of capital accounts after giving X - Rs.118,721.28 and Z -Rs.153,888.72 X - Rs.120,221.28 And Z - Rs.155,088.72 X - Rs.119,471.28 And Z - Rs.154,488.72 X - Rs.135,448.28 And Z - Rs.138,511.72 Factory rent is a direct cost to the factory as a whole but indirect to the production departments. True / False The wages paid to a trainee who constructs wooden mould for concrete laying on a building contract should be defined as : Direct labour cost Indirect labour cost Fixed labour cost Non-controllable labour cost The following information relating to material X and its standard use for production has been extracted from the standard cost card: Price of material X = Rs.5/- per litre; consumptiion of X = 10 litres per unti of product.Data relating to actual material purchases and production during the period: Purchases of X = 4,000 litres; price paid for X =Rs.6/- per unit; actual production = 500units. Calculate material usage variance. Rs.1,000/- (Favourable) Rs.4,000/- (Adverse) Rs.5,000/- (Favourable) Rs.3,000/- (Adverse) The following particulars are extracted from the books of a company relating to commodity "A" for the half year ending 30th June, 2004. (a) Purchase of raw materials - Rs.1,32,000/- (b) Direct wages Rs.1,10,000/- (c) Rent, rates and insurance - Rs.44,000/- (d) Carriage inwards - Rs.1,584/- (e) Raw material

Collected by Santosh. K

Page 88 of 97

SCDL – Management Accounting

PGDBA – I Semester

as on 1st Jan, 2004 - Rs.22,000/- (f) Finished goods as on 1st Jan, 2004 - Rs.17,000/- (1600 tonnes) (g) Raw Material as on 30th June, 2004 - Rs.24,464/- (h) Finished goods as on 30th June, Rs.64,800/Rs.46,800/Rs.86,400/Rs.68,400/Annual maintenance of Rs.28,000/- was paid on 15th June, 2003 for a period of one year therefrom. Find the amount of prepaid maitenance expenditure for the year ended 31st March. Rs.28,000/Rs.22,167/Rs.7,000/Rs.5,833/ The Balance Sheet method of cash budget ignores any excess or shortage of cash during the budget period. True / False Compound journal entry avoids duplication of effort. True / False Metal India Ltd. is holding two accounts, savings and current, with the Central Bank of India. On 31st January, 2004 his ledger shows the following balances : Savings account Rs.5,000/-; Current accountRs.2,250/- (overdraft). It is found that a deposit of Rs.1,500/- made into the savings account on 20th January, 2004 has been entered in the ledger in the of Current account. Find the correct ledger balances of savings and current accounts. Savings account-Rs.5,000/-, current account-Rs.3,750/- (overdraft Savings account-Rs.5,000/-, current account-Rs.2,250/- (overdraft) Savings account-Rs.6,500/-, current account-Rs.2,250/- (overdraft) Savings account-Rs.6,500/-, current account-Rs.3,750/- (overdraft) Which of the following source documetns in a cost accounting system is designed to exercise control voer the delivery of and accurate recording of the receipts of goods? Goods received note Order to the supplier Material requisition note Purchase requisition slip Select the cases where convention of conservation is applied : Closing stock is valued at cost or market price whichever is lower Providing for discount on debtors Amorisation of goodwill (goodwill being written off to Profit and Loss Account) Providing for discount on creditors M Ltd. manufactures three products P, Q and R. The unit selling price of these products are Rs.100/-, Rs.80/- and Rs.50/-, respectively. The corresponding unit variable costs are Rs.50/-, Rs.40/- and Rs.20/-,

Collected by Santosh. K

Page 89 of 97

SCDL – Management Accounting

PGDBA – I Semester

respectively. The quantitywise proportion in which these products are manufactured and sold are 20%, 30% and 50%, respectively. The total fixed costs are Rs.14,80,000/-. You are required to work out the overall break even point qunatity for 30,000 units 90,000 units 40,000 units 80,000 units A firm is earning a profit of Rs.60,000/- at the present sales level of Rs.500,000/-. It has a profit volume ration of 60%, which remains unchanged. Fixed cost increases by 25% as soon as sales become twice the break even point. Find the profit for sal Rs.240,000/Rs.180,000/Rs.120,000/Rs.200,000/At a break even point of 400 units, the variable costs are Rs.400/- and the fixed costs are Rs.200/-. What will the 401st unit sold contribute to profit? Re.0 Re.0.50 Re.1.00 Rs.1.50 1. Advantage of budgetary control system targets 2. Fixed budget

1. Motivates the managers to exceed the budgeted

2. Managerial tool which decreases effectiveness of managerial control

3. Disadvantage of budgetary control system 4. Flexible budget

3. More elastic and practical

4. Difficult to implement in fast changing industrial scenario 5. Restricts the efforts of the managers to the budgeted targets 6. Managerial tool which increases effectiveness of managerial control

With the help of the given information, find actual fixed overheads for actual output. Fixed overheads volume variance -Rs.75,000/- (Favourable); fixed overheads efficiency variance -Rs.95,000/- (Favourable); fixed overheads calendar variance Rs.20,000/- (Adverse); fixed voerheads expenditure variance Rs.100,000/- (Adverse) and standard fixed overheads for actual output -Rs.575,000/-. Rs.600,000/Rs.550,000/Rs.525,000/Rs.625,000/-

Collected by Santosh. K

Page 90 of 97

SCDL – Management Accounting

PGDBA – I Semester

Existing sales are Rs.100,000/- (500 units), variable costs are Rs.60,000/-, fixed costs are Rs.24,000/-. If selling price is reduced by 10% which of the following is the breakeven sales quantity? 450 units 500 units 400 units 334 units An operator engaged in machining certain components receives andordinary day rate of Rs.160/- per day of 8 hours. The standard output for machining the components has been fixed at 80 pieces per hour (time fixed for premium bonus). On a certain day, the output of the worker on this machine is 800 pieces. Find the labour cost per 100 pieces if a bonus of Rs.25/- is paid per 100 pieces of the extra output. Rs.25/Rs.20/Rs.15/Rs.10/Under the accelerating premium system incentive increases at a fast rate with the decrease in output. True /False A manufacturer is producing alloy for which standard mix is 25% copper and 75% iron. Standard price for copper is Rs.80/- per kg. and for iron Rs.20/- per kg. 20% of input is standard loss. Actual output is 8,000 kg. of alloy using 2,000 kg of copper at Rs.90/- per kg. and 9,000 kg of iron at Rs.15/- per kg. Calculate the standard cost of copper. Rs.200,000/Rs.150,000/Rs.350,000/Rs.180,000/Sold goods to Amitabh worth Rs. 15,000/- against 15% trade discount. In this case with what amount should the sales account be credited? Rs. 15,000 Rs. 12,750 Rs. 13,500 Rs. 13,750 Material Yield variance -Rs.1,000/- (Adverse); material mix variance -Rs.250/- (Favourable) and material price variance - Rs.350/- (Favourable). Find material cost variance and material usage variance. Material cost variance -Rs.400/- (Adverse) Material usage variance -Rs.750/Material usage variance is favourable Material usage variance is adverse Insurance premium of Rs.18,000/- was paid on 15th January, 2004. The policy period is one year from the date of payment of insurance. On 31st March, 2004 what amount should be debited to the Profit and Loss account as expenditure on account of insurance premium? Rs.18,000/-

Collected by Santosh. K

Page 91 of 97

SCDL – Management Accounting

PGDBA – I Semester

Rs.14,250/Rs.10,500/Rs.3,750/The standard cost of actual hours when any employee remains idle due to abnormal circumstances is known as Standard labour cost / Idle time variance / Labour cost variance / Standard cost. Keeping company's liquid position sufficiently sound to meet its daily obligation is the main object of preparing Cash Sales / Income / Expenditure / budget. One of the major drawback of the contribution approach to costing is that it ignores fixed cost. True / False Salary given in trial balance Rs. 5000/-, and Rs. 2,000/- is yet to be paid . The outstanding salary account will be disclosed in the … Profit and Loss Account - credit side Balance Sheet - liability side Balance Sheet - asset side Trading Account - debit side A withdrawal of Rs.500/- from Mr.Jone's account on 2nd October, 2004 has been entered by the bank in the pass book of Mr.Johny's account.' If you are preparing the bank reconciliation statement considering the balance as per pass book as on 31st October,2004 is Rs.2,250/- for Mr.Johny, find out the balance as per his bank book. Rs.1,750/- (overdraft) Rs.1,750/- (debit) Rs.2,250/- (overdraft) Rs.2,250/- (debit) What will be the impact of following transactions on the cost of a lathe machine : (a) Transport charges on the lathe machine were debited to Carriage inward account, Rs.1,100/- (b) Cost of installing the machine stands debited to miscellaneous expenses account, Rs.200/Cost will increase by Rs.900/Cost will increase by Rs.1,300/Cost will decrease by Rs.1,300/Cost will decrease by Rs.900/From the following particulars, calculate the machine hour rate of overhead absorption. A company has three production departments and two service departments. The overhead analysis sheet provides the following totals of the overheads analysed to production and service departments. Production Departments :X- Rs.48,000; Y-Rs.42,000; Z-Rs.30,000.Service Departments : A-Rs.14,040; B-Rs.18,000. The expenses of the service departments are apportioned as follows : Service department A - Production department X-20%; Production department Y - 40%; Production department Z- 30%; Service department B - 10%.Service department B- Production department X-40%; Production department Y - 20%; production department Z- 20%; Service department A - 20%. Details of machine hours are as follows:

Collected by Santosh. K

Page 92 of 97

SCDL – Management Accounting

PGDBA – I Semester

Production department X -1,000 hours; Production department Y-1,000 hours; Production department Z1,000 hours. X - Rs.5.316, Y - Rs.5.952 and Z - Rs.3.936 X - Rs.5.952, Y - Rs.3.936 and Z - Rs.5.316 X - Rs.5.952, Y - Rs.5.316 and Z - Rs.3.936 X - Rs.5.316, Y - Rs.3.936 and Z - Rs.5.952 From the given information compute the total cost variance. Material cost variance -Rs.4,400/(Favourable); labour cost variance -Rs.450/- (Adverse); fixed overhead cost variance -Rs.22,000/(Adverse); variable overhead cost variance -Rs.6,000/- (adverse). Rs.32,850/- (Adverse) Rs.32,850/- (Favourable) Rs.24,050/- (Adverse) Rs.24,050/- (Favourable) Judge the given statement according to the given criteria :- 'Provision for doubtful debts account' and 'provision for discount on debtors account' mean same account can be maintained under two accountheads, since both are related to debtors and indicate a loss to the organization. The statement and the reason both are correct The statement and the reason both are incorrect The statement is correct but the reason is incorrect The statement is incorrect but the reason is correct 1. Ordering cost 1. Cost of holding the inventory 2. Carrying cost 2. Cost of issuing the inventory 3. Material cost 3. Cost of administrative efforts 4. Cost of material consumed 4. Can be obtained subtracting opening stock from the sum of material cost and closing stock 5. Can be obtained subtracting closing stock from the sum of material cost and opening stock 6. Sum of possession cost, ordering cost and purchase cost The pass book showed a credit balance of Rs.1,000/-. This balance was after considering the dividend of Rs.25/- collected by bank and Rs.5/- charged as collection expenses: these entries are not made in the bank book. Find the balance as per bank book. Rs.1,000/Rs.1,030/Rs.1,020/Rs.980/Compute fixed overheads calendar variance when fixed overhead volume variance is Rs.250/(Favourable); fixed overheads efficiency variance is Rs.2,150/- (Adverse) and fixed overheads capacity variance is Rs.800/-(Favourable). Rs.1,100/- (Adverse) Rs.1,100/- (Favourable) Rs.1,600/- (Adverse)

Collected by Santosh. K

Page 93 of 97

SCDL – Management Accounting

PGDBA – I Semester

Rs.1,600/- (Favourable) Routing the purchase requisition through the purchase department entails unnecessary delay in receiving the required materials. True /False Large angle of incidence indicates

Lower /Adjusted /Higher /Same

amount of profits.

The method of overhead apportionment which considers both the material cost as well as the labour cost, is known as Supplementary rate /Prime cost percentage rate /Direct labour hour rate /Machine hour rate method. Standard labour cost of producing 500 metre of cloth has been specified as 20 hours work by skilled workers @ Rs.15/- per hour and 30 hours work by unskilled workers @ Rs.10/- per hour. For producing 500 metre cloth they worked for 30 hours each they were paid at the rate of Rs.17/- per hour and Rs.10/per hour, respectively. Calculate labour mix variance. Rs.210/- (Adverse) Rs.60/- (Adverse) Rs.150/- (Adverse) Rs.30/- (Adverse) In a factory Ram and Shyam produce the same product using the same input of same material and at the same normal wage rate. Bonus is paid to both of them in the form of normal time wage rate adjusted by the proportion which time save bears to the standard time for the completion of the product. The time allotted to the product is fifty hours. Ram takes thirty hours and Shyam takes forty hours to produce the product. The factory cost of the product for Ram is Rs.3,100/- and for Shyam is Rs.3,280/-. The factory overhead rate is Rs.12/- per hour. Calculate the cost of material used for the product, for each worker, Ram and Shyam. Rs.3,000/Rs.2,000/Rs.3,320/Rs.2,320/Provision for discount on debtors account should be credited to the Profit and Loss Account. True /False Consideration to the fact that the repairs and maintenance cost is less in the initial years of life of the asset and hence needs to be counterbalanced by higher amount of depreciation in the :Straight line method Written down value method Endowment policy method Sinking fund method The following data is available for a company for the month of April, 2004 : Territory I : selling expenses Rs.7,600/-; distribution cost Rs.4,000/-; number of units sold -16,000; sales Rs.76,000/-. Territory II : selling expenses Rs.4,200/-; distribution cost Rs.1,800/-; number of units sold -6,000; sales Rs.28,000/-. Territory

Collected by Santosh. K

Page 94 of 97

SCDL – Management Accounting

PGDBA – I Semester

III : selling expenses Rs.6,240/-; distribution cost Rs.2,000/-; number of units sold -10,000; sales Rs.52,000/-. The company adopts sales basis and quantity basis for application of selling and distribution costs respectively. Compute the amount of selling and distribution costs chargeable to a consignment of 4,000 units of a product sold in each territory at Rs.2.50 per unit. Territory I -Rs.2,000/-; Territory II -Rs.2,000/- and Territory III -Rs.2,000/Territory I -Rs.2,700/-; Territory II -Rs.2,700/- and Territory III -Rs.2,700/Territory I -Rs.2,700/-; Territory II -Rs.2,700/- and Territory III -Rs.2,000/Territory I -Rs.2,000/-; Territory II -Rs.2,700/- and Territory III -Rs.2,000/SRR Ltd. producing a single product, sells it at Rs.50/- per unit. Unit variable cost is Rs.35/- and fixed costs amounts to Rs.12,00,000/- per annum. Calculate the increase in sales required if profits are to be increased by Rs.2.4 lakhs Rs.880,000/Rs.800,000/Rs.600,000/Rs.660,000/Re-order level should be higher than Monthly requirement /Average stock level /Annual requirement /Minimum level but lesser than maximum stock level. What is the balance of the cash account after considering the relevant transactions from the following set : 4th July, 2004-Sold goods to Deshmukh & Co. for Rs.2,500/-; 5th July, 2004-Received Rs.5,000/- for rent of June, 04; 7th July, 2004-Paid salaries by cheque for Rs.8,000/-; 15th July, 2004-Received commission, in cash, from XYZ Ltd., Rs.3,000/-; 21st July, 2004-Paid salaries by cash Rs.2,500/-; 22nd July, 2004-Deposited cash into Bank of India Rs.3,000/-; 25th July, 2004-Purchased furniture from Shantilal for Rs.10,000/-. Shantilal has given a credit period of 45 days; 26th July, 2004-Paid cash for purchase of machine from Elpro Ltd. For Rs.30,000/-; 28th July, 2004-Paid ready cash for advertisement inserted in newspaper, Rs.200/-; 28th July, 2004-Withdrawn cash from Bank of India Rs.50,000/-. Rs.22,300 (debit) Rs.22,300 (credit) Rs.33,200 (debit) Rs.33,200 (credit) Factory cost is Rs.13,10,800/-. The administrative overheads are salaries Rs.40,000/-, rent and rates Rs.6,400/-, traveling expenses Rs.12,400/-, Depreciation Rs,2,400/-, Directors fees Rs.24,000/-, General Charges Rs.24,800/-, Manager's salary Rs.38,400/-. What will be the office cost? Rs.14,59,200/Rs.11,72,200/Rs.13,10,800/Rs.15,10,800/XYZ Ltd. has set up the following standards for variable production overheads : standard hours per unit -3 hours; standard variable overhead per hour -Rs.10/-. The actual data for the month is as follows : actual variable overheads incurred Rs.620,000/-; actual output -20,000 units and actual hours worked54,000 hours. Find variable overheads cost variance. Rs.20,000/- (Adverse)

Collected by Santosh. K

Page 95 of 97

SCDL – Management Accounting

PGDBA – I Semester

Rs.20,000/- (Favourable) Rs.60,000/- (Adverse) Rs.60,000/- (Favourable) The concept of marginal costing is based on the important distinction between product costs and Indirect /Direct /Variable /Period costs. Currently Beta Ltd. is earning a contribution of Rs.80/- per unit and the variable cost is Rs.180/- per unit. Its fixed costs are Rs.200,000/-. Its existing sales are 5,000 units. The company has a proposal that the sales staff may be paid a commission of 10% of sales instead of fixed salaries totaling Rs.80,000/-. This action is expected to increase the sales by 10%. Compute the amount of profit assuming the proposal is accepted? Rs.177,000/Rs.200,000/Rs.178,000/Rs.277,000/A company has a normal capacity of 120 machines, working 8 hours per day of 25 days in a month. The fixed overheads are budgeted at Rs.144,000/- per month. The standard time required to manufacture one unit of product is 4 hours. In April, 2004, the company worked 24 days of 840 machine hours per day and produced 5,305 units of output. The actual fixed overheads were Rs.142,000/-. Compute calendar variance. Rs.6,360/- (Favourable) Rs.17,280/- (Adverse) Rs.5,760/- (Adverse) Rs.16,680/- (Adverse)

Industries which have high fixed cost burden but low variable cost have Narrow /Smaller /Larger /Flat angle of incidence. Special aspects of co-partnership include:Workers are granted ownership rights Indirect monetary remuneration The morale of the workers is increased The workers are rewarded for individual efficiency The credit purchases are as follows : July Rs.80,000/- and August Rs.140,000/-. Creditors are paid either on a 'prompt basis' (on the spot) or 30 days basis. It is estimated that 10% of the creditors are in the prompt category. Find the amount paid :Rs.161,000/Rs.121,000/Rs.177,000/Rs.118,000/-

Collected by Santosh. K

Page 96 of 97

SCDL – Management Accounting

PGDBA – I Semester

The use of contribution per unit of limiting factor as the basis for ranking products to be produced and sold is aimed at which of the following? Maximization of turnover Minimization of turnover Maximization of short-term profit Maximization of long-term profit Obsolescence arises when a machine has to be discarded in favour of one better adopted to its purpose and giving better result. True /False A manufacturing unit produces electronic circuits at the rate of 6 pieces an hour. The unit works in single shift of 8 hours during a six-day week and remains close for 18 days a year on account of holidays. Average idle hours per month is 20 for cleaning and maintenance of equipments. Against an average annual output of 12,000 pieces during last ten years, the actual output achieved during the year was 10,800 pieces. The fixed overheads for the year amounted to Rs.540,000/-. You are required to calculate the idle capacity costs on the assumption that overhead recovery rate is based on maximum capacity. Rs.207,121.60 Rs.200,000/Rs.193,121.60 Rs.187,000/-

Collected by Santosh. K

Page 97 of 97