MGT402 Final Term MCQs 2010 by Faheem

MGT402- Cost Management Accounting · Composed By Faheem Saqib · 5 Final Term Exams of 2010 · FINALTERM EXAMINATION · Fall 2010 · MGT402- Cost Management Accounting (Session - 3) · Time: 120 min Marks: 84 Student Info · Center: · OPKST · ExamDate: · 3/1/2010 12:00:00 AM

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Q1. The contribution margin ratio is 30% for the Spice Co. and the breakeven point in sales is Rs. 150,000. If the company desires a target net income of Rs. 60,000, what would have to be the amount of actual sales? (1 marks)

1. Rs. 200,000
2. Rs. 350,000
3. Rs. 250,000
4. Rs. 210,000

Correct answer: Rs. 210,000

Q2. Cost of finished goods inventory is calculated by: (1 marks)

1. Deducting total cost from finished goods inventory
2. Multiplying units of finished goods inventory with the cost per unit
3. Dividing units of finished goods inventory with the cost per unit
4. Multiplying total cost with finished goods inventory

Correct answer: Multiplying units of finished goods inventory with the cost per unit

Q3. All of the following are characteristics of Group Bonus Scheme EXCEPT: (1 marks)

1. A standard time is set for the completion of a job
2. If the time taken is greater than the time allowed, the workers in the group receive time wages
3. If the time taken is less than the time allowed, the group receives a bonus on time saved
4. If the time taken is greater than the time allowed, the workers in the group receive time deductions for extra hours

Correct answer: If the time taken is greater than the time allowed, the workers in the group receive time deductions for extra hours

Q4. Superior started 80,000 gallons of paint. During the month the company completed 92,000 gallons and transferred them to the mixing department. Superior had 38,000 gallons in beginning inventory and 26,000 gallons in ending inventory. (1 marks)

Material is added at the beginning of the process and conversion costs are added evenly throughout the process. Beginning WIP was 30% complete as to conversion costs and ending WIP was 20% complete as to conversion costs. The company uses a FIFO costing

The company uses a FIFO costing. The cost data for February follow:

Beginning inventory: Direct materials Rs.22, 200

Costs added this period: Direct materials Rs. 150,000

Required:

What was the cost of direct materials in ending inventory?

1. Rs. 37,560
2. Rs. 42,600
3. Rs. 45,550
4. Rs. 48,750

Correct answer: Rs. 45,550

Q5. Jones, Industries uses process costing system. In October, the finishing department had 30,000 (20% as to conversion) units in beginning work-in-process, 45,000 (40% as to conversion) units in ending inventory and had 95,000 units transferred in from the previous department. Material is added at the end of the process and conversion costs are added uniformly throughout the process. Required: If Jones uses weighted average, what are the equivalent units of production for direct material and conversion costs? (1 marks)

1. Material 125,000 units Conversion cost 45,000 units
2. Material 125,000 units Conversion cost 98,000 units
3. Material 125,000 units Conversion cost 18,000 units
4. Material 125,000 units Conversion cost 80,000 units

Correct answer: Material 125,000 units Conversion cost 45,000 units

Q6. An average cost is also known as: (1 marks)

1. Variable cost
2. Unit cost
3. Total cost
4. Fixed cost

Correct answer: Unit cost

Q7. Period costs are: (1 marks)

1. Expensed when the product is sold
2. Included in the cost of goods sold
3. Related to specific period
4. Not expensed

Correct answer: Related to specific period

Q8. The net profit or loss for a particular period of time is reported on which of the following? (1 marks)

1. Statement of cash flows
2. Statement of changes in owner's equity
3. Income statement
4. Balance sheet

Correct answer: Income statement