MGT402 Midterm Past Paper 2010 by Zohib

MGT402 MID 2010 from zohib · MIDTERM EXAMINATION · Spring 2010

MGT402- Cost & Management Accounting (Session - 4) Time: 60 min

M - 4

Cost accountants are concerned about the ratios relating to the Profits and Manufacturing costs. These ratios might include:

1. Gross Mark up rate
2. Inventory turnover ratio
3. Cost of goods sold to sales ratio
4. All of the given options

Financial statements are prepared:

1. Only for publicly owned business organizations
2. For corporations, but not for sole proprietorships or partnerships
3. Primarily for the benefit of persons outside of the business organization
4. Depending upon only the need of the decision maker

If a predetermined FOH rate is not applied and the volume of production is reduced from the planned capacity level, the cost per unit expected to:

1. Remain unchanged for fixed cost and increased for variable cost
2. Increase for fixed cost and remain unchanged for variable cost
3. Increase for fixed cost and decreased for variable cost
4. Decrease for both fixed and variable costs

Cost accounting concepts include all of the following EXCEPT:

1. Planning
2. Controlling
3. Sharing
4. Costing

Which of the following is a cost that changes in proportion to changes in volume?

1. Fixed cost
2. Sunk cost
3. Opportunity cost
4. None of the given options

Which of the following is a period cost?

1. Direct materials
2. Indirect materials
3. Factory utilities
4. Administrative expenses

Increase in material Inventory means:

1. The ending material inventory is greater than opening inventory
2. The ending inventory is less than opening inventory
3. Both ending and opening inventories are equal
4. Can not be determined

Weighted average rate per unit is calculated by which of the following formula?

1. Cost of goods issued/number of units issued
2. Total cost/total units
3. Cost of goods manufactured/closing units
4. Cost of goods sold/total units

EOQ is a point where:

1. Ordering cost is equal to carrying cost
2. Ordering cost is higher than carrying cost
3. Ordering cost is lesser than the carrying cost
4. Total cost is maximum

While calculating the EOQ, number of orders is calculated by:

1. Dividing required unit by ordered quantity
2. Multiplying the required units with ordered quantity
3. Multiplying the ordered quantity with cost per order
4. Multiplying the required units with cost per order

In cost Accounting, normal loss is/are charged to:

1. Factory overhead control account
2. Work in process account
3. Income Statement
4. All of the given options

Capacity Variance / Volume Variance arises due to

1. Difference between Absorbed factory overhead and budgeted factory for capacity attained
2. Difference between Absorbed factory overhead and absorption rate
3. Difference between Budgeted factory overhead for capacity attained and FOH actually incurred
4. None of the given options

Which of the following statements is TRUE?

1. Companies that produce many different products or services are more likely to use job-order costing systems than process costing systems
2. Costs are traced to departments and then allocated to units of product when job-order costing is used
3. Job-order costing systems are used by service firms only and process costing systems are used by manufacturing concern only
4. Companies that produce many different products or services are more likely to use process costing systems than Job order costing systems

Which of the following would be considered a major aim of a job order costing system?

1. To determine the costs of producing each job
2. To compute the cost per unit
3. To include separate records for each job to track the costs
4. All of the given options

Which of the following is characteristic of a job order cost accounting system?

1. It records manufacturing activities using a perpetual inventory system
2. It tracks cost by job
3. It is best suited for customized products
4. All of the given options

Which of the following would be considered as factory overhead using a job order cost system?

1. Direct materials
2. Direct labor
3. Depreciation on factory buildings
4. Salesperson's salary

All of the following are deducted from Gross Profit to calculate Operating income EXCEPT:

1. Selling expenses
2. Advertising expenses
3. Administrative expenses
4. Financial expenses