MGT402 Midterm MCQs by Memon

MGT402 Cost & Management Accounting Composed By Faheem Saqib

14 Midterm Papers 3 of 2010 & 11 of 2009 · MIDTERM EXAMINATION · Spring 2010 · MGT402- Cost & Management Accounting (Session - 1) · Ref No: Time: 60 min Marks: 47

Q1. Which of the following is added in purchases in order to get the value of Net purchases? (1 marks)

1. Purchases returns
2. Carriage inward
3. Trade discount
4. Rebates

Correct answer: Carriage inward

Q2. A typical factory overhead cost is: (1 marks)

1. Distribution
2. Internal audit
3. Compensation of plant manager
4. Design

Correct answer: Compensation of plant manager

Q3. Costs that change in response to alternative courses of action are called: (1 marks)

1. Relevant costs
2. Differential costs
3. Target costs
4. Sunk costs

Correct answer: Differential costs

Q4. Which of the following best describes the manufacturing costs? (1 marks)

1. Direct materials, direct labor and factory overhead
2. Direct materials and direct labor only
3. Direct materials, direct labor, factory overhead, and administrative overhead
4. Direct labor and factory overhead

Correct answer: Direct materials, direct labor and factory overhead

Q5. If, COGS = Rs. 50,000 (1 marks)

GP Margin = 25% of sales What will be the value of Sales?

1. Rs. 200,000
2. Rs. 66,667
3. Rs. 62,500
4. Rs. 400,000

Correct answer: Rs. 66,667

Q6. Which of the following is correct? (1 marks)

1. Units sold= Opening finished goods units + Units produced – Closing finished goods units
2. Units Sold = Units produced + Closing finished goods units - Opening finished goods units
3. Units sold = Sales + Average units of finished goods inventory
4. Units sold = Sales - Average units of finished goods inventory

Correct answer: Units sold= Opening finished goods units + Units produced – Closing finished goods units

Q7. When prices are rising over time, which of the following inventory costing methods will result in the lowest gross margin? (1 marks)

1. FIFO
2. LIFO
3. Weighted Average
4. Cannot be determined

Correct answer: LIFO

Q8. Which of the following would be the effect, if inventory is not properly measured? (1 marks)

1. Expenses and revenues cannot be properly matched
2. Unfair position in Financial Statements
3. Inventory items show under or over stocking
4. All of the given options

Correct answer: All of the given options